FTC Seeks to Block $1.2 Billion Stewart Title & Fidelity Deal Over Competition Claims

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While some view competition among businesses as a negative, competition among corporations is good for both consumers and businesses, often helping with different aspects of the economy. This can sometimes be a difficult line to tread for those involved in acquiring other businesses, as the size of the merger could have an overall impact on competition within the marketplace. For Fidelity National and Houston-based Stewart Information Services, this idea of competition came into play when the FTC got involved.

The U.S. Federal Trade Commission (FTC) recently sought to block the $1.2 billion acquisition because it would ultimately limit competition for title insurance underwriting and services. The Commission filed a complaint in the U.S. District Court for the Western District of Pennsylvania alleging the deal could “substantially reduce competition” and the combined company would yield more than 40% of the U.S. title business if the acquisition were completed.

In a statement, Bruce Hoffman, director of the FTC’s bureau of competition stated, “competitive title insurance and title information markets are essential to providing Americans affordable and high-quality title insurance products.” Hoffman went on to say, “the merger threatens to continue a trend of consolidation in these markets. Our action seeks to preserve important and beneficial competition that plays out every day in every real estate transaction across the United States.”

The deal between the two title companies began after Stewart considered putting itself up for sale in late 2017 after falling profits related to Hurricane Harvey and a decline in refinancing orders due to rising interest rates had hurt the business. In March of 2018, the proposed deal was written up. Now, if it falls through, Fidelity would be required to pay Stewart a fee of $50 million.

The Houston-based business was founded in 1893 in Galveston and has been plagued by activist investors who pushed for changes within the company. Longtime board members have since been replaced and a new stock structure was created. In the event the Fidelity deal falls apart, Stewart could remain independent or perhaps find a different company to work with from another industry.

Houston Commercial Litigation Attorneys

For the dedicated commercial litigation lawyers at Feldman & Feldman, there is no adversary too big. Our legal team passionately pursues each case with skill and tenacity, but without the overhead of a large law firm incorporated into our fee structure. If you need the guidance of an experienced commercial litigation attorney, contact Feldman & Feldman today.

San Antonio Professional Firefighters Association Faces More Challenges

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First Amendment rights are a concept most Americans hold in high regard. It can be difficult to imagine not having these certain rights, especially when it comes to advocating for something you believe in. Unfortunately, the San Antonio Professional Firefighters Association (SAPFA) has faced many hardships involving the city of San Antonio in the last year, one of which involves a lawsuit over the group’s First Amendment rights. Now, almost a full year after a vote last November, the city wants a federal judge to step in and dismiss the union’s suit altogether.

Just last year, SAPFA sued the city of San Antonio in federal court, alleging city officials violated union representatives’ First Amendment rights. The allegations came after the city sought to enforce a “free speech area” policy during SAPFA’s San Antonio First Initiative in order to hinder its efforts to gather signatures for two union-backed charter amendments SAPFA eventually won. These “free speech areas” were small and located far from where the firefighters could interact with residents according to the union.

In addition to these “free speech areas,” SAPFA alleges city officials tried to intimidate its representatives by posting notices at the libraries where they were originally petitioning. These notices stated that unidentified petitioners would try to gather signatures from them and that citizens should be allowed to read a petition prior to signing it, and to not feel pressured into it.

With the passage of the charter amendments, San Antonio voters capped the city managers’ tenure and pay, and also gave the firefighters’ union sole power to send contract negotiations into binding arbitration. The union sought such measures after firefighters had gone years without a contract. Now, nine months later, the city wants a federal judge to dismiss the lawsuit completely.

U.S. District Judge Xavier Rodriguez has not yet ruled on the city’s motion to dismiss the lawsuit. If Judge Rodriguez allows the suit to move forward, the union plans to continue to fight the city for its legal rights.

Protecting Your Constitutional Rights

 At Feldman & Feldman, your constitutional rights are important to us. We fiercely advocate for clients whose rights have been infringed upon. If you feel your rights may have been violated, contact us today to see how we can help.

Class Action Age Discrimination Lawsuit Against Google Brings Up New Training Policies

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As unfortunate as it seems, age discrimination is becoming more and more prevalent in the workforce as of late. According to a 2017 survey, more than six in ten workers aged 45 and older have seen or experienced age discrimination in the workplace. It’s not just your average corporations either; recently, Google settled an age discrimination lawsuit that brought about the need for more effective training policies.

Tech giant Google recently settled a class-action age discrimination lawsuit initiated by an applicant who applied to work for Google multiple times over a seven-year period. The applicant, Cheryl Fillekes, maintained she had the technical know-how to land the job but was repeatedly denied the opportunity due to her age.

According to the lawsuit, Google denied Fillekes met the company’s technical standards. In addition, the tech giant also denied any systematic age discrimination against her or any job applicants.

Google resolved the matter by paying an $11 million settlement to be divided amongst more than 200 job seekers who applied at the company when they were over the age of 40. The average payout for the 227 members of the class-action case who agreed to the settlement will be approximately $35,000.

Additionally, under the terms of the settlement, Google and its parent company Alphabet Inc. will need to train their employees and managers on age bias and establish a committee to focus on age diversity in recruiting practices. A spokesperson for Google stated the company already has policies in place aimed at curbing discrimination, including age-based discrimination.

Silicon Valley tech companies such as Google are often associated with a younger workforce. In fact, in 2016 the median age of Google employees was around 30-years-old, while at Facebook it was around 28.

Google releases an annual diversity report that often highlights the ethnicity and gender or its employees. This report, however, does not include information pertaining to the age of its employees.

Houston Employment Dispute Attorneys

When employers and management do not work to prevent employment-related disputes, it is only a matter of time until a dispute will arise. At Feldman & Feldman, our experienced attorneys work closely with our clients to understand the exact circumstances surrounding a dispute so we can resolve employment cases efficiently and successfully. Contact us today to schedule a consultation to discuss your case.

Former Silicon Valley Executive Misappropriated $19 Million in Investor Funds According to SEC

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While unfortunate, fraud can occur in nearly any business. Funds designated for specific business use can be misappropriated and unnoticed for months or even years given the circumstances. Not even the higher-ups in Silicon Valley are immune to fraudulent activity, as recent Securities and Exchange Commission (SEC) findings in a case against a former venture capitalist show millions of dollars in fraudulent activity.

Though it has been a year since the SEC initially brought charges against former Silicon Valley venture capitalist Michael Rothenberg for misappropriating money from his investors, the SEC now says it has even more evidence against him. According to the report, Rothenberg fraudulently enriched himself by $18.8 million from his investors. Initially, it was alleged that he had only taken $7 million.

According to the SEC, the increased amount stems from Rothenberg continuing to divert funds to himself and private business interests during the initial investigation. In a court document filed on July 31, the SEC stated, “The very month he was informed of the SEC investigation, Rothenberg raised, and misappropriated, $1.3 million.” The commission goes on to allege that, “even as he negotiated a settlement with the SEC for Securities Fraud Liability, Rothenberg misappropriated millions of dollars.”

The SEC discovered Rothenberg arranged for the 2013 venture fund to sell an interest in the popular no-fee stock trading app startup Robinhood for $5.4 million in June of 2018. Robinhood has recently been valued at $7 billion.

The SEC alleges that instead of distributing the $5.4 million to the 2013 fund’s investors, Rothenberg transferred the money into other business interests, including using $136,000 to lease a Golden State Warriors luxury suite, which he then leased out to others, raising up to $56,000. Rothenberg also put $16,000 in his personal account, donated $30,000 to the Stanford University Athletics Department and even, “spent thousands of dollars on ballet tickets,” according to the SEC.

Eventually, Rothenberg would transfer $732,000 to the 2013 Fund, the SEC says, pointing out that this was $4.7 million shy of the $5.4 million collected from the original Robinhood stake he sold.

Just a year prior, the SEC’s case against Rothenberg centered on allegations he charged $7 million in “excess fees” to his investors. It was alleged Rothenberg spent the funds not just on personal interests, but also “to pay for private parties and events at high-end resorts and Bay Area sporting arenas,” according to the SEC.

Rothenberg’s startup company, Rothenberg Ventures, was a high-flying venture firm known for its over-the-top parties, spending, and its young, charismatic founder, Mike Rothenberg. The firm had over $50 million under management when it publicly imploded in 2016. It ran out of operating money and all employees except its lawyer were told they were put on “unpaid leave.”

Houston Fraud Attorneys

Most types of fraud are intentional, but fraud also occurs through reckless representations. Fraud is also sometimes referred to as “fraudulent misrepresentation” or “fraudulent inducement.” Allegations of fraud are extremely serious. If you believe your business could be the victim of fraudulent activity, contact the experienced fraud attorneys at Feldman and Feldman today.

Contracts and Agreements Continue to be Contentious Within the E-Sports Community

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In any business venture, contracts are essential to keeping and maintaining partnerships. Keeping the ins-and-outs of what each person’s responsibilities include can help to preserve expectations and keep morale high among those involved. Within the esports industry, however, contracts and agreements have remained contentious. In a previous blog, we had detailed how the esports industry was rocked by a recent lawsuit between Turner “Tfue” Tenney and his former esports organization Faze Clan. Now, Faze Clan has filed a countersuit against Tenney to block his attempts to allegedly disparage and leave the organization.

Faze Clan alleged Tenney violated his contract by disparaging the company and attempting to form a rival esports organization. In addition to these claims, Faze Clan stated Tenny made more than $20 million in streaming, gaming endorsements, and sponsorships, and that he, “shared almost none of this income with Faze Clan.” The business plans to seek compensation from Tenney for its services and unspecified damages under the terms of the contract. Faze Clan is also seeking injunctive relief to prevent Tenney from revealing any confidential information about Faze Clan, disparaging the company publicly, and potentially interfering with its current roster of talent.

In the initial suit filed by Tenney, he claimed Faze Clan failed to pay him his share of brand deal revenue and grossly undercut his earnings. Tenney’s suit also claimed Faze Clan had the right, according to Tenney’s contract, to take up to 80 percent of his earnings in certain situations; this, however, was denied by Faze Clan who claimed it had never done so.

The countersuit against Tenney alleges his actions have resulted in “serious damage,” that could affect members of Faze Clan’s team. In addition to this, the suit also claims Tenney’s goal is to set up a rival esports company, alleging that “Tenney is taking the valuable information he learned from Faze Clan, which he is obligated to keep secret, and using it to create a rival to Faze Clan or otherwise support rival gamers and gaming organizations.”

Tenney is very popular on the live-streaming platform Twitch and is one of the network’s most popular and subscribed-to streamers. He also happens to have more than 10 million subscribers to his YouTube Channel. Tenney initially signed with Faze Clan in April 2018. The contract specifically stated Faze Clan would receive 80 percent of all revenue Tenney made through sponsored video content on Twitch and YouTube. However, Faze Clan’s countersuit claims Tenney experienced a boost in popularity after partnering with them. This rise in online stardom is what helped him earn millions of dollars.

“Faze Clan taught Tenney how to be more than just a skilled gamer,” the countersuit reads. “Faze Clan taught him to be a professional. It schooled Tenney in the business, social media and gaming practices that have made Faze Clan successful. And he certainly has been successful. It is understood that Tenney has earned over $20 million since joining Faze Clan in April 2018, when he was earning virtually nothing.”

While both lawsuits are currently ongoing, it’s clear contracts and agreements within the esports industry will require further regulation and the assistance of experienced legal counsel in the future.

Houston Commercial Litigation Attorneys

 When a dispute arises, it can bring your entire business to a screeching halt. When this happens, your livelihood is in serious jeopardy. The commercial litigation lawyers at Feldman & Feldman have successfully handled business disputes for over 40 years. If you need legal advice regarding a business issue, contact the experienced attorneys at Feldman & Feldman today.

The Wild West of E-Sports Contracts and Agreements

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The esports industry (also referred to as electronic sports, e-sports, or eSports) has taken off since the late 2000’s, and generally refers to organized, multiplayer video game competitions. The rise in popular live streaming services tailored to gaming, such as Twitch and Mixer, have only helped to catapult the esports industry into something that many have never quite seen before – including estimated audiences of 454 million viewers in 2019 and over $1 billion in revenue. Such growth within the esports and online gaming community has given rise to professional gamers. However, this acceleration of popularity and fame amongst these young players, combined with the utter newness of the esports industry, ultimately begs the question of how contracts and agreements among management are handled.

While many may be familiar with the popularity of the esports industry, they may be unaware it is functioning in a largely unregulated space. For instance, there is a lack of standardized contracts for professional players, no collective bargaining agreements, and no established standard working conditions. One player in particular who is quite familiar with this lack of regulation is professional Fortnite player, Turner ‘Tfue’ Tenney. Tenney recently found himself embroiled in a bitter contract dispute with his former esports team, Faze Clan. Tenney claimed a breach of contract occurred as well as unfair business practices during his time with Faze Clan.

In May of this year, Tenny’s lawyers filed a suit against Faze Clan arguing the Gamer Agreement or contract the parties agreed to back in April of 2018 was grossly oppressive, onerous, and one-sided in favor of Faze Clan. Amongst these claims, the suit alleges the Gamer Agreement contains unlawful exclusivity provisions and is in violation of California’s current agency laws, and that Faze Clan breached its fiduciary obligations owed to Tenny by unreasonably rejecting sponsorship deals. Tenney is seeking for the Gamer Agreement to be rendered void and unenforceable, and that Faze Clan should be required to disgorge and repay Tenney all the money he earned as a result of the Gamer Agreement.

The specifications within the suit detail Tenney’s complaints that the Gamer Agreement entitles Faze Clan to a finder’s fee of up to 80 percent of the revenue paid by third parties for Tenney’s gameplay. Additionally, it is alleged the Gamer Agreement contains certain anti-competitive provisions amounting to an unlawful restraint of trade. Specifically, the Gamer Agreement restricts Tenney to sponsorship deals exclusively sourced by Faze Clan and provides that Tenney cannot obtain his own deals without the prior written consent of Faze Clan.

Faze Clan have ultimately denied all allegations made by Tenney, and have released a public statement claiming it has not collected any of Tenney’s tournament winnings or non-esports related revenue. Faze Clan further states it has only received $60,000 in relation to the Gamer Agreement, while Tenney has made “millions” by association with the Faze Clan name. A key argument the team is expected to make is that Tenney voluntarily and lawfully signed the contract as an adult that he is now protesting.

Unfortunately, this will likely not be the only contract dispute case to emerge from the esports industry. While conventional professional athletes have a team of managers, agents, and even lawyers to protect their best interests, ensure proper pay, and a healthy work environment, this isn’t necessarily the norm for the esports world quite yet.

Houston Commercial Litigation Attorneys

For the dedicated commercial litigation lawyers at Feldman & Feldman, there is no adversary too big. Our legal team passionately pursues each case with skill and tenacity, but without the overhead of a large law firm. Contact the experienced attorneys at Feldman & Feldman today.

Do The National Association of Realtors’ Rules Stifle Competition?

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It’s no secret that commission plays a big role when it comes to working in the sales industry. Not so different from servers or bartenders receiving tips as the majority of their pay, a sales commission is the additional compensation one would receive for exceeding the minimum sales threshold. However, what happens when sales opportunities are avoided because the expected commission is lower than most? For the National Association of Realtors (NAR), this situation is all too familiar.

Keller Williams, the Austin-based residential real estate company, is facing backlash for its training policies. This has resulted in a class-action lawsuit challenging the commission structure on home sales brokered by members of NAR. The case itself revolves around whether or not NAR rules stifle competition by requiring listing agents to say up-front exactly how much of their sales commission will be shared with buyers’ agents.

The sellers who initially brought on the lawsuit argued agents actually avoid listing and/or showing certain properties that offer lower commissions, which can create an environment that stalls commission rates at around three percent for each cooperating agent. However, the NAR and the brokerages named in the litigation have asserted the defendants are mischaracterizing the rules.

Keller Williams is a defendant in the newly filed class-action lawsuit that consolidated previously filed litigation in Minnesota, along with suits filed by a half-dozen other plaintiffs. The class action suit goes into greater detail than the original complaint, citing the NAR training of real estate agents at Keller Williams University as evidence agents have less incentive to show homes with low commissions.

If a judge decides to strike down the standard practice of splitting commissions, it could have the potential to save a homeseller thousands of dollars in commissions by forcing more buyers’ agents to negotiate their pay or shift their fees to buyers. It would also result in cutting the earnings of real estate agents across the country and put more pressure on traditional brokerages.

The class action complaint includes a script allegedly used to train real estate agents dealing with a seller who wishes to reduce the buyer commission to save money. “When you reduce the commission, you reduce the incentive for that agent to bring a buyer to your house,” the agent in the script explains, according to court documents. “If an agent has 10 different houses, nine of which come with a 3 percent commission, one of which comes with 2.5 percent commission, which houses do you think they’re going to show?”

While NAR defends its commission structure in federal court, the Department of Justice (DOJ) has opened its own investigation into real estate agent fees. In the investigation, the DOJ has demanded information from CoreLogic, a system that provides many real estate agents with platforms where they can share listings, known as multiple listing services. While the information in regards to whether or not multiple listing services prevent competition in the real estate agent fee structure has yet to be determined, it’s clear there is a long road ahead for the NAR.

Houston Commercial Litigation Attorneys

When a dispute arises, it can bring your entire business to a screeching halt. When this happens, your livelihood is in serious jeopardy. Business litigation is often very complex, making quick resolutions unlikely. For the dedicated commercial litigation lawyers at Feldman & Feldman, there is no adversary too big. We work closely with our clients to get them the best results. If you are facing any type of business dispute or commercial litigation, call Feldman & Feldman today to schedule a consultation to discuss your case.

Former TABC Employee Claims She Was Fired For Whistleblowing

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Wrongful termination claims, though fairly common, can sometimes be complex when it comes to determining their validity. This is because each situation is unique and often requires an experienced eye to see the varying details of the claims being disputed. This was the case for a former Texas Alcoholic Beverage Commission (TABC) employee who filed a wrongful termination claim over a conflict of interest with her employer over whistleblowing claims.

Amy Harrison was let go from her position as director of licensing for the TABC after the media reported on out-of-state trips to conferences where officials partied and mingled with beverage industry representatives. Harrison wasn’t the only one who lost her job either – roughly half a dozen other agency executives were also let go during this time.

In a recent lawsuit, Harrison alleges she was pushed out of her position only after alerting TABC lawyers that former Army captain, Kevin Lilly, had personal stock holdings in companies the agency regulated. Soon after her concerns were raised, Harrison was told the agency was going in a “new direction” and was asked to resign. Being an employee since the early 1990’s, Harrison initially declined, but was soon forced out in retaliation for going outside the agency’s chain of command.

According to the lawsuit, Lilly alleges he had initially contacted Harrison to ask about potential conflicts he might have in his new role due to his personal stock holdings. After Harrison told him she was not the right person to determine this, Lilly still made the decision to send her and the agency’s general counsel a list of companies within his portfolio.

Harrison forwarded her concerns to the agency’s counsel, including the executive director at the time, Ed Swedberg, who also found potential conflicts. Soon after, Harrison alleges she was pressured to leave.

What Qualifies as Wrongful Termination?

Though many individuals terminated from their jobs might feel their termination was “wrongful,” especially if it was done without cause, the legal definition of wrongful termination is quite specific. In order to be wrongfully terminated, one must be fired for an illegal reason, which may involve a violation of federal anti-discrimination laws or a contractual breach. Under federal law, employers cannot fire an employee based on protected characteristics such as race, national origin, sex, pregnancy, religion, age, disability, and citizenship status.

In Texas, employment is “at-will,” meaning an employer can terminate an employee for any reason, no matter how arbitrary or irrational. Termination could occur at any time and for any legitimate purpose, making proving wrongful termination claims fairly difficult.

Houston Employment Law Attorneys

Employment disputes can have devastating effects on an organization’s reputation. Whether you are interested in preventing disputes or are currently faced with an employment law issue, the experienced employment attorneys at Feldman & Feldman can help. Contact us today to schedule a consultation to discuss your claim.

Texas Appeals Court Finds Copyright Infringement By Government Does Not Constitute a Taking

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Nearly everyone understands the concept of copyright. Individuals can obtain copyright protection for books, songs, computer software, and photos, among many other things. Once a copyright is obtained, the holder can seek compensation from individuals that unlawfully use the copyrighted work. This fairly straightforward legal concept was turned on its head recently when a photographer filed a lawsuit against The University of Houston System (a government entity) not for infringing upon his copyright, but alleging the university’s use of his photograph constituted a violation of his Fourth Amendment rights.

A Texas appeals court recently heard a case filed by Jim Olive Photography against The University of Houston System after the university used one of his photographs in advertising materials for its CT Bauer School of Business in 2012. Because the university is a government entity, it is immune from lawsuits, including copyright infringement lawsuits under the Doctrine of Sovereign Immunity, which protects all government entities from most lawsuits.

As a workaround to government immunity, Jim Olive Photography argued the violation of his Fourth Amendment rights. The Fourth Amendment protects individuals from the unlawful seizure of property by the government without proper compensation. Jim Olive Photography argued that by using his photograph without his consent, the government (i.e. the university) took his property.

The Texas First Court of Appeals found “No Texas case appears to have addressed whether a copyright is property for purposes of the takings clause and whether copyright infringement by a state actor is a taking.” Because of this, the judges had to rely on federal cases to inform their decision. With guidance from similar federal lawsuits, the judges determined that using a copyrighted photo did not constitute a taking under the Fourth Amendment. In order for the claim to constitute a Fourth Amendment violation, the plaintiff would need to prove the government took the entire copyright interest. Because Jim Olive Photography was still able to use and license the photo itself, the government didn’t take all interests related to the photo. The court ruled the case was in fact a copyright infringement case, which the university is immune to.

Lawsuits With Government Entities

The takeaway from this lawsuit is that any legal action involving government entities will be incredibly complex. At Feldman & Feldman, our lawyers have extensive experience handling claims against governmental entities. We understand the nuances of this type of public interest litigation and can help you resolve these legal issues efficiently. Contact us today to schedule an appointment with one of our government litigation lawyers.

SEC Wants Clearer Guidelines After Elon Musk’s Tweets

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Elon Musk is known for many things, including founding Paypal and serving as the CEO of Tesla Motors. In addition to making cars, building spaceships, and investing in a wide variety of technology start ups, Musk is also known for his prolific tweeting. Unfortunately, not everyone likes Musk’s use of the social media platform Twitter, and his tweets have not only created controversy, but they have also led to legal troubles with the U.S. Securities and Exchange Commission (SEC). Now, the SEC wants clearer guidelines how social media usage can violate federal law and lead to commercial litigation.

Musk’s trouble with the SEC goes back to August 2018 when the CEO tweeted he was going to take Tesla private. This caused Tesla’s stock price to skyrocket, as eager investors wanted to purchase stock before the buyback; however, the SEC found Musk’s statement “lacked an adequate basis in fact” and filed a lawsuit against him for violating federal securities law. Just months later, Musk got in trouble again when tweeting about the company’s commitment to produce a certain number of cars in 2019.

Determining whether or not an individual’s social media use has violated securities laws is often not black and white. Current regulations don’t mention social media use, which has prompted the SEC Commissioners to ask for new guidelines. SEC Commissioner Robert Jackson said, “Without prejudging a particular matter, it might be time for us to come forward and say, here are some principles of this game.”

Nearly everyone uses some type of social media platform and company executives are no exception. While executives may want to share company information on social media, they still have a responsibility to investors and shareholders. Executives are allowed to share information on social media, but investors must be informed on what social media channel will be used to push out market sensitive information.

Even though the SEC has yet to adopt specific guidelines for social media use, the agency is committed to pursuing securities violations, which include violations that occur on social media. And, it’s important to note, social media usage can be a huge source of liability for a business well beyond securities violations.

Houston Commercial Litigation Attorneys

If you are facing any type of litigation arising from your social media use or want to pursue a claim against another party for their use of social media, do not wait to contact Feldman & Feldman. We can review your case and explain your legal options.