New Year’s Resolutions You Can Keep Michael Morfey January 15, 2019 Joe Buoni Ashley Kahn This presentation has been prepared for informational purposes only and does not constitute legal advice. The provision of information is not intended to create (and receipt does not constitute) a lawyer-client relationship. Readers should not act on this information without seeking professional legal counsel.
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
New Year’s Resolutions
You Can Keep
Michael Morfey January 15, 2019
Joe Buoni
Ashley Kahn
This presentation has been prepared for informational purposes only and does not constitute legal advice. The provision of information is not intended to
create (and receipt does not constitute) a lawyer-client relationship. Readers should not act on this information without seeking professional legal counsel.
2019: New Year, New You
2
Resolution #1: Stay Current
3
Recent Changes to Rule 23
• Rule 23 is the procedural rule that governs class actions
in the federal system
• Class actions are a big deal!
– Last longer
– Cost more
– Threaten greater liability
• Amendments to Rule 23 are rare
4
What You Need to Know
• The changes were effective 12/1/18
• Not fundamental changes, but still significant
• Settlements in particular will be affected
5
What You Need to Know
• Notice can be by electronic or “other appropriate means”
– No preference for “any one means of notice”
– Courts are “to consider the capacity and limits of current
technology, including class members’ likely access to such
technology”
• New requirements for notice of a proposed settlement
– Parties now must show that “court will likely be able to approve”
the proposed settlement under Rule 23(e)(2) and certify the
class for judgment
6
What You Need to Know
• Uniform core factors for court approval of settlements
– Adequate representation by class counsel and representatives
– Arm’s length negotiation
– Relief provided for the class is adequate
– Class members treated equitably relative to each other
• Protections against bad faith objectors
– No payment or other consideration for forgoing or withdrawing
an objection “unless approved by the court after a hearing”
7
Resolution #2: Learn Something New
The TCPA has become a valuable tool in
defending a wide range of lawsuits
8
Why You Should Care • Puts plaintiff on the defensive early
– Suspend all discovery
– Sneak-peek into the plaintiff’s evidence (e.g., affidavits from key
witnesses)
• The upside– if you win
– Early dismissal of claims
– Mandatory award of reasonable attorney’s fees
• Little downside– if you lose
– Interlocutory appeal
– Attorney’s fees are discretionary and unlikely
– You still forced plaintiff’s hand and tested resolve
9
Grounds for Dismissal– Free Speech
• A party can move to dismiss any claim relating to the
“exercise of the right of free speech”
– Applies to any “communication made in connection
with a matter of public concern”
– “Matters of public concern” are issues relating to
• Health or safety
• Environmental, economic, or community well-being
• A good or service in the marketplace
• The government or a public official / figure
10
Grounds for Dismissal– Association
• TCPA also protects the “exercise of the right of
association”
• Defined as communications between individuals who
“join together to collectively” pursue “common interests”
• No “public concern” requirement
11
TCPA “Casts A Wide Net”
• Statute interpreted as written
• Broader than First Amendment
• Applies to public and private communications
– Internal company communications re: poor job performance
– Misappropriation of trade secrets
– Breach of contract
– Tortious interference
12
TCPA Burden Shifting
13
Show allegations “relate to” protected
activity
Plaintiff must then show “clear and
specific” evidence of every element of
every claim to avoid dismissal
Preponderance of evidence of each
affirmative defense element
TCPA Should Apply in Federal Court
• Limited case law
• Clifford v. Trump
– C.D. California
– Clifford from Texas
– Motion filed late
– POTUS won and received
attorney’s fees
14
The Key Takeaways
• Defendants can (and often should) use the TCPA in
commercial litigation
– First Amendment principles are irrelevant
• Plaintiffs must prepare to avoid TCPA traps
– Obtain evidence in advance (e.g., pre-suit discovery)
– Downplay protected “communications” in petition
– Consider waiting for discovery to add claims likely to trigger
TCPA motion
15
16
Resolution #3: Be Ready to Adapt
17
Traditional Oil and Gas Principles in
the World of Unconventional Drilling
18
Texas Case Law • Browning Oil Co. v. Luecke, 38 S.W.3d 625 (Tex. App.—
Austin 2000, pet. denied)
– Rule of capture does not apply to horizontal wells drilled in highly
fractured formations
• Lightning Oil Co. v. Anadarko, 520 S.W.3d 39 (Tex. 2017)
– Surface licensee’s drilling of horizontal well through mineral estate
to obtain minerals on adjacent lease is “not a sufficient injury to
support a claim for trespass”
• Murphy Exploration v. Adams, 560 S.W.3d 105 (Tex. 2018)
– Principle that offset well must be proximate to the draining well
“does not apply in the context of horizontal drilling and hydraulic
fracturing in the Eagle Ford Shale”
19
What You Need to Know • Oil and gas jurisprudence will continue to adjust to
accommodate unconventional technologies
• What’s “settled” law may not be so settled after all
• Future issues likely to bubble up:
– Whether preferential rights of purchase (AAPL Model Form
Operating Agreement) apply to acreage swaps?
– Whether allocation wells require formation of a pooled unit?
20
Key Takeaways
• Review your existing forms now
– Leases, operating agreements, etc.
• Consider drafting special provisions to clarify issues that
will likely come up in the future
– Rider to make clear that preferential rights clause applies only to
outright purchases and not acreage swaps
– Specific provisions that speak to allocation, etc.
21
22
Resolution #4: Stay Cool Under Pressure
23
Weathering TROs and Injunctive Relief
• Stressful for both sides
• Months of litigation crammed into two weeks
• Temporary injunction hearing is a mini-trial
24
What You Need to Know • From plaintiff’s side, slow down if at all possible
• Many technicalities and pitfalls:
– TRO requirements
– Application must be verified
– TRO bond
• Winning the TRO hearing is just the beginning
25
What You Need to Know
• From defendant’s side, you have limited time – use it
wisely
• Consider a “divide and conquer” approach
• Chess moves after a TRO is granted
• Appeal rights
26
Resolution #5: Work On Your Relationships…
27
With Your Contract Counterparties
28
Look for Signs of Financial Distress
• Is your counterparty – Offering discounts for prompt payment?
– Selling AR to a factoring company?
– Unexpectedly increasing or decreasing orders?
– Making late, sporadic, or partial payments?
• Has your counterparty – Significantly altered its debt profile (e.g., revolver drawdown,
borrowing base redetermination)?
– Undergone any internal restructurings (e.g., divisional mergers,
exchange offers, assignments to affiliates)?
29
Evaluate Your Ongoing Relationship
• Request adequate assurance of
future performance
• Renegotiate contract or revise
course of dealing
– Payment in advance or COD
– Letter of credit
• Terminate pre-bankruptcy
30
Should you
end a bad
relationship?
Manage Preference Exposure
• Clawback “preferential” payments
so GUCs are treated equally
• A preference is “value” provided:
– By the debtor
– On account of an antecedent debt
– Within 90 days before a bankruptcy
filing
• Preferences must be returned
unless a defense applies
31
Manage Preference Exposure (cont.)
• Prioritize “contemporaneous exchanges” of value
• Avoid extraordinary payments
– Payment should at least be consistent with prior dealings or
industry practice
– Large, late payments increase exposure
• Protect extraordinary payments
– Provide “new value” on credit after receiving payment
• Consider trade credit insurance
32
Key Takeaways
• Identify financial distress early
• Implement a preference strategy
– Best defense will be fact-specific
– Cash is still king
• Monitor bankruptcy filings and act
promptly post-petition
– Reclamation rights (20 days)
– Setoff and recoupment rights
• With proper planning, you can
minimize your losses
33
Resolution #6: Come Clean (and Stay Clean)
34
Cybersecurity Risks and Disclosures
• Not just guarding against data
breaches and cyber attacks
• Increased focus on disclosure
– Many companies not disclosing risks;
those that do often use boilerplate
language
– Disclosures often fail to give genuine
sense of the risk – cyber attacks included
in laundry list of potential events
• If not careful, exposure to SEC
enforcement actions and shareholder
suits (Yahoo, Equifax, PayPal)
35
What You Need to Know • Update cybersecurity governance, policies and procedures
• Risk Management and Incident Response Plan
– Establish cybersecurity response team (set out key roles and
responsibilities)
– Define triggers for mobilizing response team
– Provide clear roadmap to follow when incidents occur
• Conduct frequent cybersecurity training and awareness
– Tabletop exercises, etc.
36
What You Need to Know • If subject to SEC reporting requirements,
adequately disclose risk factors
– Probability of occurrence and potential magnitude
of cybersecurity incidents
– Preventative actions taken to reduce risks
– Aspects of business and operations that give rise
to material cybersecurity risks
• If an incident occurs, disclose it carefully and
quickly
– Understand the nature of the compromise, the
data/systems at issue, whether insiders are involved
– Consider consulting third-party forensic experts and
PR experts
37
The Bad News…
38
• According to U.S. News, approximately 80% of New
Year’s Resolutions fail by the second week of February
The Good News!
• You’re motivated
• You’re informed
• You can do this!
39
40
Contact Information
Joe Buoni Hunton Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas 77002
(713) 220-4168– direct dial
41
Ashley Kahn Hunton Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas 77002
(713) 220-4339– direct dial
Michael Morfey Hunton Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas 77002
(713) 220-4163 – direct dial
Related Documents
