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Hot Firm in Miami
With at least 75 lawyers working on venture deals, the firm's capital markets group helped Greenberg Traurig move from 107th largest law firm in the United States in 1995 to 86th in 1996. In all, the firm now has more than 275 lawyers.
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SETTLEMENT
Quick Release?
A personal-injury case in Miami has raised warning flags for business people who try to settle cases involving children out of court.
The case began in 1995 when a 3-year-old girl fell from a second floor terrace, allegedly after the railing collapsed. Her family's landlord offered $6,000 in return for a promise not to sue. The family accepted. When the parents later learned that the girl's head injuries were far more extensive than they thought, they hired personal-injury specialist Abramowitz and Associates of Fort Lauderdale and sued. The family's lawyers are claiming that the release is invalid because it wasn't approved by a court. Florida law requires a legal guardianship to be established for claims worth more than $5,000.
Moral: Get big settlements involving children approved by a court.
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House Of Torts
Lawsuits over house plans are more than a cottage industry these days. And they threaten the future of smaller homebuilders.
Litigation over upscale home designs has reached unprecedented proportions in development-crazy Florida.
Big corporate builders are copyrighting so many designs that smaller builders "could be forced basically into a position of not being able to compete," warns attorney Philip Hammersley of Sarasota. "There will be no designs they can work with. That's what scares me."
Clearwater-based Arthur Rutenberg Homes led the way in the 1980s with careful copyrighting of its numerous designs - and aggressive litigation against builders, draftsmen and even homeowners whose structures appeared to be based on Rutenberg plans. But other builders, including U.S. Home, have followed Rutenberg's lead in recent years, especially after changes in federal law made such suits easier to win and more lucrative. The trend is the same elsewhere.
"It's been a problem for a while, but it seems to be growing," says Mary DiCrescenzo, senior counsel to the National Association of Home Builders. Tampa attorney Frank Jakes, who represents Rutenberg and several other frequent homebuilder plaintiffs, estimates that he now sends out between 25 and 50 letters a year on behalf of clients complaining that their architectural copyrights have been violated. At any given time, he has 5 to 10 lawsuits pending. Jakes, of Clearwater-based Johnson, Blakely, Pope, Bokor, Ruppel & Burns, insists that smaller builders "are complaining for the wrong reasons. They don't want a level playing field; they want to be able to swoop in and grab the customer who's price-sensitive."
Of course, architects and homebuilders have a legitimate complaint when another draftsman or builder copies their high-quality plans down to the last archway. But recent statutory changes in response to the problem simply have gone too far in helping designers - and their lawyers. Consider:
What's protected. Back in the old days, copyrights covered only blueprints and other technical drawings. But the 1990 federal Architectural Works Copyright Protection Act changed all that. It extended protection to the design itself, "as embodied in any tangible medium of expression," including the finished structure. Extending copyright protection to something as intangible as a "design" is causing particular problems in south Florida, where many upscale homes look alike because of the state's building styles.
And the new protection doesn't stop at the exterior. The statute also protects "the arrangement and composition of spaces and elements in the design" - in other words, the room layout. "How many ways can you design a three-bedroom ranch?" DiCrescenzo asks. "When there's no exemption for a common design that is already out there, the lawsuits keep proliferating."
How a violation is proved. To win a design copyright case, you don't even have to show that a homebuyer looked at a particular plan - just that the housebuyer had access to it. Typically that happens when a prospective homebuyer visits a builder's model home and signs the guest book. House plans are present in the model home. When filing suit, the builder can prove that the prospective buyer had "access" just by bringing in the guest book. "Then it's just a matter of proving substantial similarity" of the builder's home and the home the buyer later commissioned from someone else, says Tampa attorney David Partlow.
But it's even easier than that. Under the 1990 law, a plaintiff now can prove access to a protected design simply by showing that a defendant saw the building in question or could have. A homebuyer "can violate the law just by using their memory" of a building they saw, says Tampa attorney Stefan Stein. As one critic of the new law mused, "How many putative infringers walk by (Philip) Johnson's AT&T building daily?"
Incentives to sue. Before the recent changes, damages usually were limited to the value of the plans themselves, typically a few hundred bucks. But in recent years, federal courts and Congress have broadened damages to include the profits the defendant made on the copy. In an upscale house, that can be $50,000 or more. Incentives to settle. Once a case develops, defendants have a big incentive to settle because the courts are much more willing to award attorney fees to the winner in copyright suits. Fees for a case that goes to trial in the Tampa Bay area run $30,000 per side. Once potential defendants find themselves in the crosshairs, it almost always makes sense to settle.
"That happens nine times out of ten," says DiCrescenzo of the National Home Builders Association. "This kind of litigation can be abused and has been abused." One recent case from Sarasota illustrates the danger of going to trial. As Jakes recalls the case, the damages awarded by the jury ran to about $65,000. Jakes' side also won attorney fees that totaled about the same amount. The case highlighted how widespread the risks are: One of the defendants was the president of the local builders' association.
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Self-Defense
What you can do to help protect yourself from architectural design lawsuits:
1. If you're a builder or draftsman, get your own plans copyrighted as soon as possible. It's cheap - $20 - and relatively painless. And if a lawsuit develops, your copyright will constitute evidence that your design was your idea.
2. Don't keep other people's copyrighted plans around to use for inspiration. And don't let clients rely on other people's copyrighted plans.
3. Above all, don't believe the old adage that it's OK if you change a design by 10%. "A lot of the problems come up because a draftsman convinces a homeowner there's no problem because they made 5% to 10% changes," says Tampa attorney Stefan Stein. "That is not the test. The test is whether there is substantial similarity between the allegedly infringing work and the plaintiff's copyrighted work. And a percentage is not relevant even if you could quantify it."
