California Business Litigation Blog

The United States Justice Department has intervened in the civil case between a former student and his school. The school, Gregory B Jarvis Junior Senior High School, part of the Mohawk Central School District, is accused of failing to stop students and teachers from bullying a 14 year old, openly gay student named Jacob. The claims are that the bullying centered around the child's sexual orientation. See previous post HERE.

The student was often the subject of verbal and physical harassment, the lawsuit states, because he was openly gay. In 2009, the student began to dye his hair and wear eye makeup, which intensified the bullying to the point of being pushed down the stairs. The parents of the student claim that the school did nothing to stop the bullying.

However, the fact that the Justice Department is involved in the case signals that there may be a broader interpretation of the federal law that prohibits gender discrimination, which in this case is being applied to the gay male. The New York Civil Liberties Union attorney states that this involvement shows a major shift under the Obama Administration.

The basis for joining the lawsuit, the government says, is Title IX of the Civil Rights Act of 1964. The case is being heard in US District Court in the Northern District of New York. The teen's attorney states that the case is a fight for basic human rights afforded under the US Constitution. It commends the Justice Department for its involvement in the case.

The lawsuit seeks undisclosed monetary damages. With the joining of the Justice Department, this helps provide district wide relief for all district students in the future. The assistant attorney general in Washington authorized the involvement of the Justice Department by stating that it was a matter of general public importance.

The student is no longer in the Mohawk district but attends school in a neighboring district. The school district claims it is close to a settlement with the student, but further comments were not available. The Justice Department has interviewed numerous Mohawk school officials including Superintendent Joyce Caputo.

Continue reading "U.S. Justice Department Joins Gay Teen's Lawsuit" »

Posted by Richard Oppenheim | Permalink | Email This Post

Posted In: Education   Education Law   School District Law   School Lawsuit

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The New York State's highest court declined to hear the motion of television anchor Dan Rather, who has tried to unsuccessfully sue his former employer, CBS for $70 million. He alleges that the company was in breach of his contract and made accusations of fraud against the company. The state appellate court dismissed the case in September, but the Court of Appeals denied the motion without comment.

The ruling from the appellate court states that the pay or play clause in his contract allowed the network to take the actions they did. Further, the ruling stated that Rather failed to show support for his claims that CBS has hurt his future earning potential in the case.

Rather was with the company for 44 years. This motion was the final move the newsman could make in the case, which proved to be an expensive and ugly battle. Rather sued CBS first in 2007, when he stated that his treatment from the company in the aftermath of a controversial report issued about George W Bush's service in the Texas Air National Guard was released.

The lawsuit stems from a 60 Minutes II piece in which Rather reported that Bush received preferential treatment during his Vietnam era service in the National Guard. Rather states that there were documents obtained by CBS written by Bush's commanding officer at the time. However, the validity of the documents came under scrutiny and the network conceded that the documents could not be authenticated.

After he filed suit, some of his colleagues publically denounced him saying that he trying to deflect some of the blame for allowing the story, which had not been properly vetted, onto the news program. However, the lawsuit, claims Rather, is meant to take on political interests and business interests that he believes are affecting the news organizations.

Rather was quoted as saying the following in regards to the lawsuit and his claims, "I believed then and I believe now that its' important the public understand how much influence in collusion big government and big business can have in affecting how the news is handled." The remarks were made on Tuesday after his motion was declined.

CBS declined to comment on the ruling, stating that they will let Rather have the final word.
After the airing of the controversial piece, Rather says that he was pushed out of the anchor chair and then placed in the news division until he was prematurely released. He believes that the actions of the network damaged his reputation and made it difficult for the anchor to find work after that point.

Posted by Richard Oppenheim | Permalink | Email This Post

Posted In: Business Litigation   Contract Litigation   Employment Law

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In a ruling on Dec 29, former Deloitte partner, Thomas Flanagan, from Chicago, was found liable for violating the accounting firm's conflict of interest policies. These policies extend for stock and options trading of the firm's clients. Clients of the company include Motorola Corp, Allstate Corp and Walgreen Co. Flanagan who was a 30 year employee of the company, was also found to have concealed these trades from Deloitte.

A further hearing has been set to determine the extent of the penalty held against Flanagan, but reports indicate that the company is seeking monetary damages which may include Flanagan's retirement benefits. Flanagan has not made a statement regarding the case. He has said that some of his investments were allowed by the SEC, such as those in which he did not have specific interactions with client's or those clients that were not from the Chicago office where he was employed.

Flanagan, a senior partner and Vice Chairman for the company embarrassed the company and left the company vulnerable to a variety of liability exposures from clients. In addition, the company is now shaken because of the additional regulatory scrutiny about the independence of the auditor. Within the accounting industry, there are strict rules about trading simply because employees have so much access to the private information of their clients that they could affect the pricing of the client's securities. Numerous times during the trial, Flanagan invoked his Fifth Amendment rights.

Many of the company's clients have had to do their own investigation to determine the involvement of Flanagan with their individual accounts. Walgreens, USG Corp and Allstate have conducted investigation that have found that Flanagan did not have involvement with their specific audits.

The company, Deloitte, says that Flanagan made investments into the company's audit clients and others more than 300 times between the period of 2001 to 2008. In some of those transactions, evidence showed that Deloitte was trading on non public information which is illegal. As of yet, the US Securities and Exchange Commission has not brought charges in the case.

Flanagan's involvement in such transactions was detailed numerous times in the case. One instance poses Flanagan attending a meeting of Allstate's audit committee in which a draft of the company's second quarter earnings statement was circulated. The company planned to announce significant increases in full year earnings at that time. This occurred on July 17, 2006. The following day, Flanagan purchased call options in Allstate stock. He later sold them on July 20th, the day after Allstate's earnings went public and the price of the stock purchased rose considerably. The stock saw an 85 percent gain in those days.

Flanagan is also charged with concealing his holdings from the company. The company requires individuals to report investments they or their immediate families own. In numerous instances, Flanagan would record unauthorized holdings into the company's computer tracking but would go back later the same day to correct such entries indicating that he had disposed of holdings when in fact he had not.

According to reports, Deloitte did not know of Flanagan’s wrongdoing until August of 2008. At that time, the SEC contacted Deloitte in regards to an audit for Walgreens in 2007. Flanagan purchased stock in Option Care Inc a week before Walgreens announced that it would buy the company in July of 2007. Flanagan did serve as an advisory partner on that audit. Flanagan resigned from his position with Deloitte as soon as the company contacted him regarding the SEC inquiry.

Continue reading "Deloitte Wins Lawsuit...Former Partner Loses" »

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Posted In: Business Litigation   Contract Litigation   Employment Law

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The California Science Center in Los Angeles canceled its screening of the documentary, "Darwin's Dilemma: The Mystery of the Cambrian Fossil Record." The documentary promotes the theory of intelligent design rather than the theory of evolution for the creation of human beings. The documentary specifically criticizes Charles Darwin's theory of evolution. Moreover, because of this cancelation, the museum is being sued.

The American Freedom Alliance says it has no position on intelligent design but does say that the filing of the lawsuit against the science center is necessary since the center is stifling debate on the topic by canceling it. The organization brought the lawsuit against the California Science Center in October, in Los Angeles Superior Court.

The science center was set to show the program in October of 2009. However, it pulls it after being pressured to do so by the Smithsonian and other scientific academies.

This is not the first time that this topic has come up in a court of law. In 2005, for example, the case of Kitzmiller vs. Dover Area School District resulted in a federal judge issuing a ruling that public school classes cannot present intelligent design as an argument for the creation of humans because it is a form of Creationism. It also occurred in 2005, when The Smithsonian approved auditorium space in its National Museum of Natural History to screen another intelligent design type of documentary. The scientific community opposed this, but The Smithsonian was unable to back out of the previously signed contract. It did refund the rental fee for the space and publically stated it was not endorsing the screening of the documentary.

The pretrial hearing in this case is scheduled for January 26th, 2010. The American Freedom Alliance claims that the cancelation of the screening was done under a false pretext and therefore that the science center committed contract fraud. It is seeking punitive damages.

Posted by Richard Oppenheim | Permalink | Email This Post

Posted In: Contract Litigation   Education   Education Law   Freedom of Speech

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In a move that has already stirred up tremendous controversy, Nevada Governor Jim Gibbons has released his plans for reforming Nevada's Public Education System. Some have even called it an attempt to eliminate Teachers' Unions.

Here is the press release:

For Immediate Release: January 6, 2010

GIBBONS EDUCATION REFORM PROPOSAL

Governor Gibbons is firmly committed to improving K-12 education in Nevada. Improvement will require new ideas and fresh resolve to replace blind allegiance to ineffectual and wasteful notions that have demonstrated no substantive gains in academic performance for the last 20 years.

Class size reduction was added to the Nevada Revised Statutes in 1989. According to the Nevada Department of Education, 613 schools served K-12 students during Fiscal Year 2009. Despite 20 years funding class size reduction, the Department recently announced 142 public schools in Nevada qualify as low-performing for the purposes of receiving federal grants for the “worst” schools in the nation. That means 23 percent of our public schools are not adequately addressing the educational needs of their students.

It’s time to stop whining that education in Nevada doesn’t work because of lack of funding. We need to quit throwing money at programs which have not accomplished their stated purposes despite two decades of funding. There are many studies which debate the issue of class size in primary grades, as many pro as con. Utah has one of the lowest per student expenditures in the nation and the highest student per teacher ratio. Utah students consistently achieve above average levels. Washington, D.C. has the lowest student per teacher ratio and the highest per student expenditures, and yet they consistently rank in the bottom for student achievement. If class size reduction is the answer for improving K-12 in Nevada, why haven’t student test scores improved dramatically in the last 20 years?

In order to improve Nevada schools for our students, we need to implement true change - real change. We need to get parents and communities involved in their local schools, and in charge of their children’s education. We need to empower local school boards to make decisions which are right for the children in their community. Local school boards are ultimately responsible to parents and voters in their community. Parents have the most vested interest in the outcome of their children’s education.

The cookie cutter approach has not worked in K-12 education. Not all schools need class size reduction programs. Not all schools need full-day kindergarten. School districts must be empowered to choose the right programs for the students in each of their local schools. Parents must be afforded the ability to choose and guide the education which works for their children.

The current fiscal crisis facing Nevada mandates that Governor Gibbons buck the status quo. If 23 percent of Nevada schools are categorized as underachieving, we need to rethink how we deliver public education in Nevada. We need to make better use of existing resources, and give local school districts the flexibility to use funding to deliver the right programs to the right kids to achieve the best results.

Governor Gibbons will call a special session of the Nevada Legislature to address the fiscal crisis facing the state of Nevada. In this session, Governor Gibbons will introduce a K-12 education reform package which will not only save Nevada taxpayer dollars, but will better utilize existing taxpayer support for schools by empowering local school districts to govern and direct how education is delivered.

Governor Gibbons’ education reform package includes:

Continue reading "Nevada Governor Releases Sweeping K-12 Reform Plans" »

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Posted In: Education   School District Law

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