The Lawletter Vol 39 No 11

Alistair Edwards, Senior Attorney, National Legal Research Group

     It is well established that an oil and gas lease can be subject to certain implied covenants or duties. These can include, for example, the implied covenant or duty of the lessee to reasonably develop the leased property, to use reasonable care and due diligence in its operations, to act as a reasonably prudent operator, and to market. However, few courts have explored the issue of whether an oil and gas lease is subject to the basic implied covenant of good faith and fair dealing traditionally found in contracts.

     Recently, in Yoder v. Artex Oil Co., 2014-Ohio-5130, 2014 WL 6467477 (Ct. App.), the Ohio Court of Appeals held that an oil and gas lease is subject to the implied covenant of good faith and fair dealing found in contracts. To support its conclusion, the court relied on several secondary sources, as well as Ohio law. The court explained:

The Lawletter Vol 39 No 11

Sandra Thomas, Senior Attorney, National Legal Research Group

     The Appeals Court of Massachusetts has affirmed a trial court's dismissal of a complaint filed by a former husband seeking to decrease or terminate his alimony obligation because he had reached "full retirement age," defined under Massachusetts statute as "the payor's normal retirement age to be eligible to receive full retirement benefits under the United States Old Age, Survivors, and Disability Insurance program," i.e., Social Security. Lalchandani v. Roddy, No. 13-P-1988, 2014 WL 7447305, at *4 n.6 (Mass. App. Ct. Jan. 5, 2015) (quoting Mass. Gen. Laws ["M.G.L."] ch. 208, § 48 (inserted by St.2011, c. 124, § 3)).

     The parties divorced in 1992 after more than 20 years of marriage. The separation agreement entered into between the parties was incorporated, but not merged, into the judgment of divorce and thus retained independent legal significance. Included in the agreement was a provision that the husband would pay $4,333.33 per month to the wife as alimony until the death of either party or the wife's remarriage. The agreement allowed the parties to modify its terms by written agreement. In 1996, the wife filed a complaint for contempt against the husband for, among other things, unpaid alimony.

The Lawletter Vol 39 No 11

Paul Ferrer, Senior Attorney, National Legal Research Group

     In a classic formulation, the "business judgment rule" is defined as "a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company." Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984) (emphasis added), overruled on other grounds by Brehm v. Eisner, 746 A.2d 244 (Del. 2000). The business judgment rule plays a crucial role in protecting corporate directors from liability for business decisions, because "[a]bsent an abuse of discretion, th[eir] judgment will be respected by the courts" and the burden to establish facts rebutting the presumption is on the party challenging the decision in question. Id.

    The question of whether the business judgment rule should also apply to protect business decisions made by corporate officers has been the subject of much academic debate. See generally Amitai Aviram, Officers' Fiduciary Duties and the Nature of Corporate Organs, 2013 U. Ill. L. Rev. 763, 766 & n.15 (2013) (collecting articles). However, the issue has not been addressed in many cases. In those cases in which the question has been presented, the courts have given the issue little attention in consistently holding that the business judgment rule does not apply to corporate officers.

The Lawletter Vol 39 No 11

John Stone, Senior Attorney, National Legal Research Group

     "Occupy Wall Street" protestors brought an action under 42 U.S.C. § 1983 against the City of Austin, Texas, challenging on First Amendment and Due Process grounds the City's policy of issuing criminal trespass notices to protestors on city property. They sought nominal damages and declaratory and injunctive relief. After a bench trial, the U.S. District Court for the Western District of Texas granted declaratory and injunctive relief to the protestors but denied their motion for attorney's fees and expenses under 42 U.S.C. § 1988. The protestors appealed the attorney's fees ruling to the Fifth Circuit.

     The Fifth Circuit reversed and remanded for entry of an order awarding the protestors fees in an appropriate amount. Sanchez v. City of Austin, No. 13-50916, 2014 WL 7234728 (5th Cir. Dec. 18, 2014). The error leading to the reversal was the district court's having used the allegedly limited nature and scope of the injunctive relief obtained by protestors and the allegedly limited injury to their rights as relevant factors when determining whether "special circumstances" warranted denial of § 1988 attorney's fees, even though the protestors had been prevailing parties.

The Lawletter Vol 39 No 10

John Buckley, Senior Attorney, National Legal Research Group

     A periodic review of employment policies for changes in the law is always prudent. In light of the rapidity of recent developments, however, including marriage rights of same-sex couples and prohibitions against discrimination based on sexual orientation and gender identity, counsel for employers face an unprecedented challenge keeping workplace policies compliant in a changing legal landscape.

     Same-sex marriage rights. Recent legislative and judicial developments related to same-sex marriage rights impact workplace rights involving benefits, leave time, and related issues. An employee's same-sex spouse may be entitled to coverage under employer-provided health insurance plans and have rights as the alternate payee, beneficiary, and/or survivor in employee pensions and other retirement benefits. Upon divorce, an employee's spouse may recover an interest in the portion of the employee's pension or other retirement benefit that accrued during the marriage. Upon an employee's death, the surviving spouse may be entitled to receive any wages due the employee. Similarly, under federal and many state laws, an employee is entitled to paid or unpaid leave time to care for a spouse with a serious medical condition or a spouse who is a military servicemember or veteran. Thus, it is essential for employment policies to reflect the current legal definition of "spouse" under federal law and in the employer's particular state(s) of operation.

The Lawletter Vol 39 No 10

Charlene Hicks, Senior Attorney, National Legal Research Group

     The provision of notice solely by publication of an impending legal proceeding affecting an individual's property rights has long been unpopular with the public and disfavored by the courts. To ameliorate the harshness of publication notices and to comply with the intended recipient's right of due process, state and federal courts generally require the party charged with giving notice to first take reasonable steps or make diligent efforts to locate the intended recipient's current address. The question then arises as to what type of investigation is legally required to fulfill the sending party's notice obligations. In this regard, some courts have recently been asked whether such investigatory obligations include the performance of an Internet search for the intended recipient's current address.

     This question is clouded by the admonition of the U.S. Supreme Court in Jones v. Flowers, 547 U.S. 220 (2006), that a party charged with providing notice need not conduct an open-ended search to locate the intended recipient's current whereabouts. It is unclear whether an Internet search amounts to an open-ended search rejected by Jones.

The Lawletter Vol 39 No 10

Fred Shackelford, Senior Attorney, National Legal Research Group

     Joining numerous other courts that have addressed the issue, the Nevada Supreme Court has considered for the first time whether a litigant's statements to the media regarding litigation are protected by an absolute privilege. In Jacobs v. Adelson, 325 P.3d 1282 (Nev. 2014), a wrongful termination claim was brought against a former employer and its chief executive officer, Sheldon Adelson. The case attracted widespread media attention, and during its course, Adelson was quoted in a Wall Street Journal article as follows: "We have a substantial list of reasons why Steve Jacobs was fired for cause and interestingly he has not refuted a single one of them. Instead, he has attempted to explain his termination by using outright lies and fabrications which seem to have their origins in delusion." Id. at 1284.

The Lawletter Vol 39 No 10

Matt McDavitt, Senior Attorney, National Legal Research Group

    While many employers create severance contracts as incentives for employees to remain during mergers or sales of the company, few employers realize that some severance agreements are governed by the Employee Retirement Income Security Act ("ERISA") and that federal ERISA law preempts state law when such severance contracts are introduced during litigation.

     However, not all employer severance contracts are subject to preemption by federal ERISA law. The ERISA statutes do not define which severance agreements are governed by federal law; fortunately, a line of federal case law has clarified how this determination is made.

The Lawletter Vol 39 No 10

Doug Plank, Senior Attorney, National Legal Research Group

     The Florida Supreme Court recently held that the warrantless tracking of an individual through the use of real-time cell site location information was a violation of that individual's rights under the Fourth Amendment. In Tracey v. State, No. SC11-2254, 2014 WL 5285929 (Fla. Oct. 16, 2014), the defendant had been convicted of possession of cocaine and other offenses after police officers apprehended him while he was transporting the cocaine by automobile. The evidence showed that the officers had been able to monitor the movements of the defendant and his accomplice, who was located in another city, by following the cell site location information given off by their cell phones as the defendant placed calls to the accomplice. By using the information showing the location of the accomplice, the officers were able to establish where to set up surveillance for the moment that the defendant would meet the accomplice and exchange the cocaine.

The Lawletter Vol 39 No 9

Suzanne Bailey, Senior Attorney, National Legal Research Group

     Section 237(a)(2)(B)(i) of the Immigration and Nationality Act ("INA"), 8 U.S.C. § 1227(a)(2)(B)(i), provides that an alien is deportable if s/he has been convicted of any law "relating to a controlled substance . . . other than a single offense involving possession for one's own use of 30 grams or less of marijuana." (Emphasis added.) What approach should an Immigration Judge ("IJ") take in determining whether the alien's conviction fits within this "personal use" exception? Should the IJ be limited to a categorical inquiry, which does not permit a review of the facts underlying the particular offense but requires a comparison of the elements of the "generic" offense listed in the INA with the elements of the statutory offense of which the alien was convicted? Or should the IJ be allowed to conduct a circumstance-specific inquiry into the alien's conduct leading to the conviction?