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Houston Business & Commercial Law Blog

'I Love Lucy' production company sues CBS

Texans who are fans of "I Love Lucy" may recall that Lucille Ball and Desi Arnaz created Desilu Productions to produce their legendary sitcom. That production company has recently sued CBS over the its use of an identical image and name for Desilu.

According to the complaint, Desilu Productions claims that CBS's use of the same name and image leads to trademark confusion for consumers and has led to a loss of money and property. CBS states that it has been using the name and image for years and that it received the common law trademark use rights when Paramount Pictures acquired Desilu. CBS claims that Paramount transferred the right to use the picture and name.

Federal appeals court sides with Texas employer in FMLA dispute

After a lower court ruled in favor of a steel company, a federal appeals court affirmed the decision that the employer had not broken the law when terminating a salesman's job. The employee had alleged that the company fired him because he took time off under the provisions of the Family and Medical Leave Act.

During the salesman's leave, a supervisor accessed his company email account. An email that the man sent to a customer stated that the company was expediting an order, but the supervisor confirmed that the salesman had not even put the order into the company's system. The salesman then lied to the supervisor when asked about the order. After confronting the man with the email evidence, the company decided to terminate his employment for the lie and other documented customer complaints he received.

Highly regarded businesses often fare better in court

When prestigious companies in Texas face legal action related to employment discrimination, they tend to have better odds of obtaining a favorable resolution. This is according to research done by the Kellogg School. In many cases, the company's status helps it to get the benefit of the doubt from a jury. However, if a highly regarded company is found liable, it could be punished more severely than others.

Each year, the Equal Employment Opportunity Commission receives roughly 100,000 discrimination complaints. According to the Kellogg School study, juries were 14 percent less likely to find a highly regarded company guilty of discrimination compared to those that had less prestige. The fact that how a company was perceived impacted the outcome of a case was known as the halo effect. Researchers found that this same effect could be found among Major League Baseball pitchers who were perceived to have a high status for throwing accurate pitches.

Health care giants set to face each other in court

Emergency rooms in Texas and around the country save thousands of lives each year, but providing this treatment can be costly. Many of the nation's ERs are staffed by nurses, doctors and specialists provided by Envision Healthcare, which has been accused by United Healthcare of using unscrupulous billing practices to overcharge both hospitals and patients. Envision responded to the allegation by filing a lawsuit against UnitedHealthcare on March 12. In the lawsuit, Envision concedes that its emergency treatment bills are high, but the company blames the costs on UnitedHealthcare.

According to the Envision lawsuit, ER costs are soaring because UnitedHealthcare will no longer accept new Envision providers. This means that patients treated by Envision ER doctors are frequently asked to pay out-of-network charges. According to Envision, UnitedHeathcare is refusing to admit new doctors into its program in order to improve its negotiating position and lower its costs.

Strong growth reported by single-family rental home companies

Among people living in rental homes in Texas, many individuals lease homes owned by real estate investment companies. Firms like Invitation Homes and American Homes 4 Rent manage properties that value well into the hundreds of millions of dollars. With occupancy rates up and financing available, these companies expanded by purchasing or building new units.

When Invitation Homes merged with Starwood Waypoint Homes, it gained 34,670 rental properties in the deal. In addition to the merger, the company spent $80.5 million on 290 more homes in a transaction that included renovation costs. Total homes in the company's portfolio now number 82,570. As a growing investment company in a strong market, the company gained a $917 million, seven-year mortgage to refinance existing loans and lower its interest payments.

Commercial real estate projections show stable growth

Over the past two decades, commercial real estate has seen average returns that consistently hover in the double-digit realm. In fact, a 20-year average shows 10.1 percent returns on an ongoing basis. Despite the reliable profitability of the sector, some Texas investors may be concerned about the potential for a downturn in the market

It's important to note that commercial real estate is a cyclical market that naturally involves some periods of growth and decline. In 2016, returns fell below that 10.1 percent number for the first time since the financial crisis eight years before. Some projections show that 2018 and 2019 results will also fall below double digits. However, the numbers still show ongoing growth and do not indicate a systemic downturn. Projections continue to indicate that investment in the sector is positive and growth-oriented.

BlackBerry sues Facebook for infringement of 7 patents

Before smartphones, many people in Texas used devices from BlackBerry for text messaging. Although the company has ceded the mobile device market to its competitors, the company holds approximately 40,000 patents, and many of them concern cybersecurity software. Determined to derive income from its substantial portfolio of intellectual property, the company has filed a lawsuit against Facebook and its companies Instagram and WhatsApp.

The court filings detail the social media giant's alleged infringement of seven patents owned by BlackBerry. Facebook and its companies stand accused of using without permission technology for mobile messaging applications, in-game messaging, security, user interface features and battery updates.

Commercial real estate affected by e-commerce growth

Like many aspects of the commercial sector, commercial real estate in Texas is being affected by the changes brought to the retail environment by the success of e-commerce. Major online retailers like Amazon have become prominent sources of day-to-day products as well as specialty items. Increasingly, consumers are making fewer trips to retail stores in person and purchasing more of their goods online.

A number of big-box and department stores have seen an impact from the growth of e-commerce; stores from major chains like JCPenney, Macy's, Sears and CVS have closed as in-person sales drop. However, other stores and retail experiences have benefited from providing unique experiences to in-person customers that cannot be replicated by online shopping. Despite the rise of virtual businesses, there remains a significant amount of opportunity for commercial real estate investors in the retail sector.

Retail sector trends

Retailers in Texas and the rest of the country are being impacted by trends that are requiring them to be proactive when it comes to anticipating consumer behavior. Providing consumers with exactly what they want is still a concern for retailers, but these important trends can help boost the future of the retail industry.

According to the World Bank, an estimated 60 million people relocate to cities every year. The resulting urbanization and population growth gives more people the opportunity to go to stores, which results in an increase in spending.

What to look for when conducting due diligence

Individuals who are looking to purchase commercial real estate in Texas or elsewhere will generally do due diligence prior to closing on a deal. This makes it possible to look into the property, the seller and how the deal will be financed to ensure that the buyer is closing a deal that is in his or her best interest. The due diligence period can be as long or as short as the buyer and seller want it to be.

It should be long enough for a buyer to get as much information as necessary to feel comfortable about the deal. During the due diligence period, it may be possible to discover any limitations regarding how the property can be used. For instance, the property may not be zoned to be used as the buyer intends. It may also be possible that using a property in a certain manner could violate laws such as the Americans with Disabilities Act.

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