June 2012 Archives

The Requirement of "Reasonable Diligence" and "Knowing the Customer" in Securities Arbitrations.

NYSE Rule 405(1) requires investment firms to use reasonable diligence in regard to the opening and maintenance of every investment account and to know the essential facts concerning every customer. These requirements are also embodied in the new FINRA Rule 2090 (Know Your Customer). These duties of reasonable diligence and knowing the customer do not apply only to situations where the stockbroker or investment advisor has made a recommendation. Rather, they apply to all aspects of the customer relationship, from the opening of the account on. If you have suffered losses on your investments due to the actions or omissions of your stockbroker or investment advisor, you should discuss with your securities arbitration attorney how these internal, regulatory rules of FINRA may apply to your case. These rules can become powerful authorities in a securities arbitration as the panel considers what the standard of care is and whether such a standard has been satisfied in a particular case.

Securities Arbitration Attorneys may Invoke Industry Rules and Regulations to Help Prove their Case

We recently filed a FINRA arbitration on behalf of a professional athlete. His story is a tragic one. He and his wife were swindled out of the majority of their assets when they placed their money in the hands of financial advisors who, in turn, invested the assets in a Ponzi scheme. We brought claims for breach of contract, negligence, common law and statutory fraud, breach of fiduciary duty and violations of the Texas Securities Act. In our FINRA arbitration filing, we cited many industry rules and regulations which support our case. In this and in succeeding blog posts, I will discuss some of these industry rules and regulations. FINRA Rules 2010 and 2020 require that all FINRA members "observe high standards of commercial honor and just and equitable principles of trade" and prohibit such members from "effect[ing] any transaction in . . . any security by means of a manipulative, deceptive or other fraudulent device or contrivance." We will ask the securities arbitration panel to hold all parties who had a duty to properly manage and oversee our clients' accounts responsible for failing to observe such "high standards of commercial honor." If an investor is put into a security by means of manipulation, deception, distortion or misrepresentation/omission of material fact, then these cited FINRA rules have been violated. It is only reasonable that the members of FINRA be required to comply with their own rules and regulations. If you are an investor that has suffered financial losses, you are encouraged to consult with a securities arbitration lawyer regarding how FINRA Rules 2010 and 2020, among others, may apply to your specific case.

The Recovery of Disfigurement Damages in Personal Injury Lawsuits

Disfigurement is an element of personal injury damages that a jury is asked to separately value when a case goes to trial. In a typical jury charge, there is a separate blank for a jury to fill out on the issue of disfigurement. Evidence introduced to prove disfigurement can be powerful at trial. The scarring or deformity involved with disfigurement can be compared with prior photographs showing the pre-injury condition of the injured person. The before and after version of the person the jury is looking at with their own eyes can often really hit home and motivate the jury to compensate the injured party significantly. Disfigurement as an element of personal injury damage has been defined as, essentially, anything that impairs the beauty, symmetry or appearance of a person. Disfigurement damages are typically recovered in cases involving scarring, deformity, amputation or any other changes in appearance of a person. The plaintiff may recover for not only past disfigurement, but also for future disfigurement that in all reasonable probability will be suffered. Injured parties should work closely with their lawyers to fully develop any and all avenues of recovery in the unfortunate event that disfigurement has been suffered.

The Hangover: Satchels, Louis Vuitton, and Trademark Infringement

What do trademark infringement attorneys dream of when they take a little tiger snooze?  Sometimes it is an interesting trademark infringement case that deals with a wildly popular movie, a famous fashion company and some fundamentals in trademark law.  Just such a case recently issued an opinion that has many good instructional points in trademark infringement law.  See Louis Vuitton Mallatier S.A. v. Warner Brothers Entertainment Inc., Cause No. 11 Civ. 9436 in the United States District Court for the Southern District of New York ("Hangover II ").  This trademark infringement case involved the use of Louis Vuitton's trademarks in the movie "The Hangover: Part II." For those familiar with the Hangover movies and characters, you will know that the character Alan deflects criticism in the first movie of his man purse by calling it a "satchel" and grouping himself in the esteemed company of Indiana Jones.  In the Hangover II, the gags continue with Alan and the "wolf pack" riffing on a fake Louis Vuitton Keepall travel bag.  The court trademark infringement opinion is both entertaining and instructive.  The opinion even references lines in the movie.  Alan states that, with respect to a counterfeit Louis Vuitton Keepall travel bag, to be "careful that is  . . . that is a Lewis Vuitton."   Louis Vuitton did not see the humor in the line or the use of the fake bag and filed a lawsuit against Warner Bros. asserting three claims for relief (1) false designation of origin/unfair competition in violation of Section 43(a) of the Lanham Act (i.e. trademark infringement); (2) common law unfair competition; and (3) trademark dilution in violation of N.Y. Gen. Bus. Law 360-l.    On June 15, 2012 the Court sided with Warner Bros. and dismissed the lawsuit for failure to state a claim upon which relief can be granted.  Louis Vuitton complained that Warner Bros. misrepresented that the knock off bag was a genuine Louis Vuitton product. More specifically, Louis Vuitton argued that Warner Bros. impressmissably used a third-party's bag that allegedly infringed on the Louis Vuitton trademarks.  In reviewing Louis Vuitton's Lanham Act claims the court noted that the Lanham Act is inapplicable to "artistic works" as long as the defendant's use of the mark is (1) "artistically relevant" to the work and (2) not "explicating misleading" as to the source or content of the work.  Rogers v. Grimaldi, 875 F.2d 994, 999(2d Cir. 1989).  In examining the artistic relevance issue, the court noted that the remark came "across as funny because [the character] mispronounces the French "Louis" like the English "Lewis.""  The court concluded that the use of the knock-off bag had some artistic relevance to the plot of the Hangover: Part II.  The court also concluded that the allegations of confusion were not plausible and that there was no likelihood of confusion that viewers would believe that the fake bag was a real Louis Vuitton bag just because a fictional character made this claim in the context of a fictional movie.    While humor rarely translates to written legal opinions, it cannot be said that the United States District Court for the Southern District of New York does not recognize a humorous scene in a movie when it is asked to review it in a trademark infringement claim.  This opinion, while entertaining, also highlights the current state of the law on the applicability of trademark infringement to "artistic works."

Damages for Physical Impairment Caused by Personal Injury is a Recoverable Element of Damages

Physical impairment is defined generally as a substantial change to the injured party’s former lifestyle that goes beyond loss of earning capacity or mere pain and suffering. It includes the loss of the ability to participate in activities such as walking, climbing, running, dancing and other recreational and social activities. For example, the cyclist who can no longer enjoy the frequent rides that were so meaningful in his or her life may well have a powerful claim for physical impairment damages. Juries will be asked to separately value physical impairment damages from all other recognized elements of personal injury damages. You are encouraged to work closely with your personal injury attorney in presenting all facts to the activities you can no longer do as a result of your injury.

Closed-Head Injuries are Recoverable Under Personal Injury Law

If you have suffered a closed-head injury, you may potentially recover in two significant areas of non-economic damages: Physical and psychological damages. In terms of physical damages, an injured party who suffers a closed-head injury may suffer from cognitive defects, memory loss and deficits in concentration and language. All of the foregoing are physical injuries that a jury will be asked to value. Moreover, the psychological damage of someone who suffers a closed-head injury is also recoverable, as these injuries frequently result in greater fatigue, mental anguish, irritability and anxiety. If you have suffered one of these types of injuries, you are encouraged to seek representation from a personal injury lawyer.  It is also important to enlist help from family, friends and medical providers to ensure that counsel has the salient facts surrounding the closed-head injury.

A Personal Injury Attorney may Recover Damages for Pain and Suffering on your Behalf

If your personal injury case went to trial, one of the elements of damage that a jury would be asked to value is physical pain and suffering.  A detailed and vivid presentation of evidence regarding the physical pain and suffering experienced by an injured person, supported by medical records, can motivate juries to award substantial damages.  The law recognizes that this element of damages is susceptible only to approximate economic valuation.  There is no set formula for determining the cash damage award from the jury on physical pain and suffering.  It is important for the personal injury lawyer to obtain all facts from the personal injury victim regarding the extent, duration and severity of physical pain and suffering experienced.

False. Fake. Baseless. Harmful. Malicious.

These are some of the words that businesses have used to describe defamatory posts that have been placed on all types of internet websites including Google Places, Yahoo, Yelp, Angie's List and others. Sometimes these defamatory reviews are placed there by individuals looking to harm a business or even by competitors. Even law firms are suing to obtain information about who is posting anonymous, defamatory comments about their firms, to get the posts removed and to collect money damages from the person(s) responsible for the content. See In re "Ben Doe", D-1-GN-11-003888, in the 98th Judicial District Court of Travis County, Texas. What makes a review defamatory? Under Texas law, "[d]efamation is a false statement about a person, published to a third party, without legal excuse, which damages the person's reputation." Fiber Systems Int., Inc. v. Roehrs, 470 F.3d 1150, 1161 (5th Cir. 2006)(quoting Moore v. Waldrop, 166 S.W.3d 380, 384 (Tex. App. -- Waco 2005, no pet.)).  For a plaintiff who is not a public figure to establish a defamation claim under Texas law, the plaintiff must prove that the defendant:  (1) published a statement; (2) that was defamatory concerning the plaintiff; (3) while acting negligently with regard to the truth of the statement.  Nasti v. CIBA Specialty Chems., 492 F.3d 589, 596 (5th Cir. Tex. 2007) (citing WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998)).  "In suits brought by private individuals, truth is an affirmative defense to slander."  Randall's Food Mkts. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995). In dealing with internet defamation for reviews placed on Google Places, Yahoo, Yelp, Angie's List and others, often the first step is determining who wrote the review, as most profiles do not provide detailed information about the poster. One procedure that may be helpful is a pre-suit request for a subpoena or deposition is filed, something which is called a "202 petition," to determine the identity of the poster of the defamatory content. A 202 petition can be filed to investigate a potential claim or suit. Tex. R. Civ. P. 202. Often these petitions are directed towards discovery from Google or an internet service provider like AT&T, Road Runner or others to determine the identity of the poster. If you have been targeted by a false and disparaging review or post on the internet, you are encouraged to contact a defamation attorney to explore remedies under the law for clearing your name.

Gucci America Inc. v. Guess?, Inc., et al.

Earlier this week, in a case styled Gucci America Inc. v. Guess?, Inc., et al., cause number 1:09-cv-04373-SAS-JlC in the United States District Court for the Southern District of New York, Judge Scheindlin issued an opinion and order on Gucci's claims. Gucci brought suit for trademark infringement, trademark counterfeiting, trade dress infringement, false designation of origin, trademark dilution and unfair competition under the Lantham Act and New York law against Guess?, Inc., et al. Gucci also sought a permanent injunction and cancellation of the trademark registration at issue. Judge Scheindlin's 100 page order provides a detailed overview of the claims, findings of fact and conclusions of law. Below are a few of the highlights on the opinion and order. Trademark Infringement Damages. The court found that Gucci was not entitled to Guess? profits from every allegedly infringing stock keeping unit "SKU," but did award Gucci $4,663,747.58 in damages with respect to some SKU's which are attached to the order as Exhibit A. The court found that there was not evidence sufficient enough to support an award of damages as measured by a reasonable royalty. Gucci and Guess? Trademarks. The court found that Gucci's marks were valid and entitled to protection. However, the court did criticize Gucci for waiting so long to bring suit against Guess?. The court emphasized that Gucci had several opportunities to see the infringing products in malls that housed both Guess? and Gucci stores, as well as in magazine ads that both companies placed in the same magazines. The court did cancel a Guess? Trademark. Permanent Injunction. The court granted Gucci a permanent injunction as follows: (a) use of the Quattro G Pattern with Gs in the corners - whether shaded or unshaded - on backgrounds of any color is permanently enjoined; (b) use of the GRG Stripe is permanently enjoined; (c) use of the Square G, when an exact replica of Gucci's registered Stylized G, is permanently enjoined. Trademark Counterfeiting Claim. The court denied Gucci's counterfeiting claim because courts uniformly "restrict trademark counterfeiting claims to those situations where entire products have been copies...". This case is likely to be prominently cited in briefs filed by parties in trademark litigation in connection with dispositive motions, trial proceedings and post-trial motions.

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