Monthly archive

April 2016 - Page 2

Off the Back: Planning for Life After the Practice of Law – By Stephen Gustitis


Our money is rarely a topic of conversation at the courthouse. We are often stoked to talk about the law . . . always primed to share details of our latest victory or penetrating cross-examination. But what about money? When our law practice closes its doors for the last time, what will we have to show for our decades of sacrifice? Hopefully, we’ll have some degree of financial freedom. But the statistics are dismal. Americans do not save enough. In 2015, the United States Government Accountability Office reported about one-half of house­holds age 55 and older had no retirement savings.1 And of those who did have savings, about 48% believed their nest egg would not be enough to maintain their living standards in retirement.2 It’s a struggle to save money. We can only cut the pie into so many pieces. Fur­ther, most criminal defense lawyers I know practice alone and don’t have access to a 401(k) plan, employer matching funds, or automatic payroll deductions. Compounding the problem is a lack of financial literacy.3 Nonetheless, defense lawyers need a plan—a system of regular saving. To better understand how to put their money to work, they may also need insight into the mysteries of investing.

Disclaimer: I am a self-taught investor. I am not a certified financial planner. Notwithstanding, I’ve personally managed my family’s assets for over 20 years using a system of saving, asset allocation, and portfolio rebalancing. My family’s assets have grown. I understand I can lose money, but I’ve not lost my shirt. I am not a day trader. I do not attempt to time financial markets. I do not speculate on “hot stocks.” Put another way, I don’t chase performance. I invest whether markets are going up or going down. I avoid “getting out” of the markets when they perform poorly. I have a plan. I’ve stuck with it regardless of media reports, the Dow Jones, and regardless of bear or bull markets. I recognize I cannot predict the future. I accept the inevitable ups and downs. Nonetheless, I’ve patiently invested according to a specific long-term formula. Granted, my way is not the only way; it’s only one way to access the financial markets. If you can’t (or won’t) do it yourself, then hire a trusted financial advisor to lead you.

If you personally manage your assets, you’ll need an account with a brokerage firm like Charles Schwab, Ameritrade, Vanguard, Scottrade, and the like. A brokerage firm is a financial institution that facilitates the buying and selling of financial securities. Consult with your accountant or financial advisor to determine the type(s) of account(s) you need. One type is the Simplified Employee Pension (SEP). A SEP is a retirement plan established by employers, including self-employed individuals. The SEP is a plan to which employers may make tax-deductible contributions on behalf of eligible employees, including the business owner. An Individual Retirement Account (IRA) is an account set up for an individual. It allows an individual to save for retirement with tax-free growth or on a tax-deferred basis. There are three main types of IRAs—Traditional, Roth, and Rollover. Again, consult with your accountant or financial advisor to determine the best account(s) for your needs. You can often download the necessary forms to open these accounts from the brokerage firm websites.

There is no question more fundamental to personal finance than how much you should save. But how much you should save varies considerably based on circumstances. For example, a 20-year-old with several decades until retirement can save a lower percentage of income than, say, a baby boomer just starting to stockpile for retirement. A rule of thumb is saving approximately 15% of yearly salary. This is a rough approximation, of course. If you’ve waited until you’re 50 to begin, you’ll need much more than 15%. If you’re in your mid-20s, you might get by with something less. Your accountant can help you determine your account contribution limits each year. We can never begin saving too soon, as the key to financial growth is time and compounding interest.

Once you’ve funded your SEP or IRA, you are now ready to begin investing. The first decision will be how to allocate your investments into different types of assets classes and categories. Asset allocation has far more impact on your results than any single investment decision you may make.4 It attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investor’s risk tolerance, goals, and investment time frame. An asset class is a group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same regulations. The three principle asset classes are equities (stocks), fixed-income (bonds), and cash equivalents (money market instruments). Whatever the asset class, each one is expected to reflect different risk and return characteristics. Each one may (and probably will) perform differently in any given market environment. Asset categories are subsets of their asset class. For example, within the stock asset class there are domestic and foreign stocks. Within those categories are small-capitization and large-capitalization stocks. Stocks can also be classified as growth or value stocks. Another example is within the bond asset class. There are government bonds, municipal bonds, and corporate bonds to choose from.

Allocating your investments into different classes and categories utilizes a concept called diversification. Diversification is a risk management technique that mixes a wide variety of investments (asset classes and categories) within a portfolio. The rationale behind diversification is that a portfolio of different kinds of investments will, on average, yield higher returns and expose the investor to a lower risk than any individual investment. In other words, the positive performance of some investments will balance the negative performance of others in the same portfolio. Diversification means not investing everything you have into one area. For instance, if you invest all your money into one stock, or into only technology stocks, or into only real estate; you are not diversified. Diversification helps you spread the risk without all your eggs in one basket. And there are products available through your brokerage firm that give you instant diversification. These are called index mutual funds and exchange-traded funds (ETFs). An index fund is a type of mutual fund with a portfolio constructed to match or track the component companies of a market index, like the Standard & Poor’s 500 Index (S&P 500). The S&P 500 index is often used for mutual funds that identify themselves as domestic “large-cap” funds. Another index is the Russell 2000. It’s a small-capitalization stock market index and, by far, the most common index for mutual funds that identify themselves as do­mestic “small-cap” funds. An index mutual fund is said to provide broad market exposure (diversification), low operating expenses, and low portfolio turnover. Other commonly known domestic indexes are the Nasdaq Composite Index, the Wilshire 5000, and the Dow Jones Industrial Average. Exchange-traded funds (ETFs) also track stock and bond indexes and can provide the investor with a large degree of diversification.

Besides regular contributions to your SEP or IRA, yearly rebalancing of your portfolio is necessary. Rebalancing is the process of realigning the weightings of your portfolio assets. Rebalancing involves periodically buying or selling assets in your portfolio to maintain your original desired asset allocation. For example, say your original target asset allocation was 50% stocks and 50% bonds. If your stocks performed well during the period it could have increased the stock weighting of your portfolio to 70%. You may then decide to sell some of your stocks (sell high) to buy more bonds (buy low) to get back to your original target allocation of 50/50. Once you decide how to allocate your money and periodically rebalance, time and compounding interest does the rest.

Investing money is not mysterious once we understand some basics. When it’s time to close our law practice doors for the last time, we hope to have something to show for the years of hard work. Imagining life in 20–30 years may motivate us to save more and invest for growth. In any event, we criminal defense lawyers need a disciplined plan to prepare for retirement, a plan for saving and investing. Utilizing the financial markets is one way to accomplish that goal. With some committed self-study, anyone can learn how to wisely invest and plan for life after the law.


1. “Retirement Security: Most Households Approaching Retirement Have Low Savings.” U.S. GAO -. 12 May 2015. Web. 26 Mar. 2016., p. 7

2. Id., p. 34.

3. Russ Wiles, The Arizona Republic, “As Life Spans Rise, Healthy Retirees Need Even Healthier Savings.” USA Today. Gannett, 2016. Web. 27 Mar. 2016.

4. Merriman, Paul, and Rich Buck. “The Ultimate Buy and Hold Strategy 2014—Paul Merriman.” Paul Merman, Sound Investing for Every Stage of Life. Web. 27 Mar. 2016.

Federal Corner: Was It a Suspicion or a *Reasonable* Suspicion? – By F. R. Buck Files Jr.


The event has occurred on thousands of occasions. Terry Trooper sees Danny Defendant driving on his highway. Something catches Terry’s attention that causes him to believe Danny has committed or is committing a criminal offense. Terry initiates a traffic stop that leads to a conversation with Danny, a seizure of something, and a warrantless arrest. The issue for the trial court or the appellate court is always the same: Did Terry have probable cause or a reasonable suspicion that Danny had committed or was committing a criminal offense?

If you will go to WestLaw’s ALLFEDS database and run the query “traffic stop” & “reasonable suspicion,” you will find 5,799 cases, of which 679 are from the courts of the Fifth Circuit. If you run the same query in the TEXAS database, you will find 1,225 cases.

Recently, a panel of the United States Court of Appeals for the Seventh Circuit held that an officer lacked probable cause or a reasonable suspicion that a defendant was violating an Indiana no-texting-while-driving law at the time of a traffic stop. The Court reversed the defendant’s conviction for possession of heroin and remanded the case to the court of United States District Judge Jane E. Magnus-Stinson of the Southern District of Indiana. United States v. Paniagua-Garcia, ___F.3d___, 2016 WL 670162 (2016) [The panel: Circuit Judges Posner, Kanne, and Hamilton (opinion by Posner)].

A Very Brief Synopsis of the Facts

An Indiana police officer observed Paniagua as he drove his car on an Indiana highway. The officer concluded Paniagua was texting on a cell phone and initiated a traffic stop. Paniagua denied that he had been texting, but the officer did not believe him and placed him under arrest. A search of Paniagua’s vehicle resulted in the seizure of some five pounds of heroin, and he was charged with the possession of that heroin. Paniagua’s lawyer filed a motion to suppress the evidence that was heard and denied by Judge Magnus-Stinson. Paniagua entered a guilty plea to possession of heroin and was sentenced to 36 months’ imprisonment; however, he reserved the right to appeal the denial of his motion to suppress the evidence and gave timely notice of appeal.

Judge Posner’s opinion reads as follows:

[The Poorly Drafted Indiana Statute Upon Which the Government Relied]

An Indiana statute forbids drivers to use a telecommunications device (normally a cellphone) to type, transmit, or read a text message or an electronic-mail message, Ind.Code § 9–21–8–59(a)—in short it prohibits “texting” (sending or receiving textual material on a cellphone or other handheld electronic device; also called “text messaging” or “wireless messaging”) or emailing while operating a motor vehicle. All other uses of cellphones by drivers are allowed, Joel M. Schumm, “Recent Developments in Indiana Criminal Law and Procedure,” 45 Indiana L.Rev. 1067 (2012): making and receiving phone calls, inputting addresses, reading driving directions and maps with GPS applications, reading news and weather programs, retrieving and playing music or audio books, surfing the In­ter­net, playing video games—even watching movies or television. Most of these activities seem dangerous—though no more so, and maybe less so, than texting—and because a driver is more likely to engage in one or more of them than in texting, see J. Tison, N. Chaudhary, & L. Cosgrove, National Highway Traffic Safety Administration, National Phone Survey on Distracted Driving Attitudes and Behaviors 4 (Report No. DOT HS 811 555) (2011), the most plausible inference from seeing a driver fiddling with his cellphone is that he is not texting.

[The Officer/Citizen Encounter]

An Indiana police officer, in the course of passing a car driven by Gregorio Paniagua-Garcia (whom for the sake of brevity we’ll call just Paniagua) on an interstate highway, saw that the driver was holding a cellphone in his right hand, that his head was bent toward the phone, and that he “appeared to be texting.” Paniagua denies that he was texting, the officer has never explained what created the appearance of texting as distinct from any one of the mul­tiple other—lawful—uses of a cellphone by a driver, and the government now concedes that Paniagua was not text­ing—that as he told the officer he was just searching for music. An examination of his cellphone revealed that it hadn’t been used to send a text message at the time the of­fi­cer saw him fussing with the cellphone.

[The Officer Could Not Have Determined What Paniagua Was Doing]

Almost all the lawful uses we’ve listed would create the same appearance—cellphone held in hand, head of driver bending toward it because the text on a cellphone’s screen is very small and therefore difficult to read from a distance, a finger or fingers touching an app on the cellphone’s screen. No fact perceptible to a police officer glancing into a moving car and observing the driver using a cellphone would enable the officer to determine whether it was a permitted or a forbidden use. See State v. Rabanales-Ramos, 273 Or.App. 228, 359 P.3d 250, 256 (2015).

[The Arrest, Followed by Prosecution in the District Court]

The officer pulled over Paniagua, questioned him at length, eventually asked and received Paniagua’s permission to search the car, and discovered in the search five pounds of heroin concealed in the spare tire in the car’s trunk. Paniagua was prosecuted in federal court for possession of the heroin, and though the police officer was mistaken in thinking that Paniagua had been texting when the officer drove by and saw him holding the cellphone, the district judge ruled that the officer had reasonably believed that Paniagua was texting.

        Paniagua pleaded guilty to possession of heroin intending to distribute it and was sentenced to 36 months’ imprisonment. But he reserved the right to appeal the denial of his motion to suppress the evidence of the heroin. He argued that it had been discovered by an illegal stop, amounting to a seizure of his person.

[The Government’s Position at the Seventh Circuit]

The government concedes that the traffic stop constituted a seizure and therefore was lawful under the Fourth Amendment (held applicable to state officers by interpretation of the Fourteenth Amendment) only if the officer had probable cause to believe that a traffic violation had occurred or reasonable suspicion that a crime was about to be or had been committed. See Whren v. United States, 517 U.S. 806, 810, 116 S.Ct. 1769, 135 L.Ed.2d 89 (1996); Navarette v. California, ___ U.S. ___, 134 S.Ct. 1683, 1687, 188 L.Ed.2d 680 (2014).

[The Officer Had No Probable Cause or Reasonable Suspicion That the Defendant Was Violating the No-Texting Law]

The government failed to establish that the officer had prob­able cause or a reasonable suspicion that Paniagua was violating the no-texting law. The officer hadn’t seen any texting; what he had seen was consistent with any one of a number of lawful uses of cellphones. The government pre­sented no evidence of what percentage of drivers text, and is thus reduced to arguing that a mere possibility of unlawful use is enough to create a reasonable suspicion of a criminal act. But were that so, police could always, without warrant or reasonable suspicion, search a random pedestrian for guns or narcotics. For it would always be possible that the pedestrian was a bank robber, a hired killer on the loose, a drug lord or drug addict, or a pedophile with child pornography on his thumb drive. “A suspicion so broad that [it] would permit the police to stop a substantial portion of the lawfully driving public . . . is not reasonable.” United States v. Flores, 798 F.3d 645, 649 (7th Cir.2015); see also Reid v. Georgia, 448 U.S. 438, 441, 100 S.Ct. 2752, 65 L.Ed.2d 890 (1980); Delaware v. Prouse, 440 U.S. 648, 662, 99 S.Ct. 1391, 59 L.Ed.2d 660 (1979); United States v. Thompson, 772 F.3d 752, 758–60 (3d Cir.2014).

[Judge Possner Distinguishes Between Suspicion and Reasonable Suspicion]

The government appears to recognize no limit to the grounds on which police may stop a driver. It says the officer’s suspicion must be reasonable but offers no example of unreasonable suspicion and cites no evidence to support a finding of reasonable suspicion in this case. What it calls reasonable suspicion we call suspicion. Suppose the officer had observed Paniagua drinking from a cup that appeared to contain just coffee. Were the coffee spiked with liquor in however small a quantity, Paniagua would be violating a state law forbidding drinking an alcoholic beverage while driving, and that possibility, however remote, would on the reasoning advanced by the government and adopted by the district judge justify stopping the driver.

        Against this comparison the government argues that “in the case of drunk driving, by contrast [to texting], erratic movements, speed changes, and other conduct would typically be part of the assessment of the reasonableness of an officer’s suspicion,” and therefore “it would be unreasonable in certain cases to suspect drinking and driving when observing a driver drinking from an unmarked cup, but it is always reasonable to suspect texting while driving when observing a driver typing on and looking at a phone.” In saying this the government (the federal government, remember) reveals confusion about Indiana law, which does not merely forbid driving while drunk; it forbids any consumption of alcohol while driving. Ind.Code § 9–30–15–4. Just as it’s possible to text without being seen to text, it is possible to consume alcohol without being observed to have done so and without having become intoxicated as a result.

        Consider now that some drivers don’t have a driver’s license, or their license has expired. The logic of the government’s position is that either possibility, however slight, justifies the police officer in suspecting that the driver is not authorized to drive and in ordering him to pull over.

[The Government’s Concession that a Traffic Stop Is a Fourth Amendment Seizure]

Surprisingly—for it is a blatant contradiction to its argument for affirmance—the government states “that a traffic stop such as the one at the heart of this case is a ‘seizure,’ which must comport with the Fourth Amendment.” But this means that in the absence of compelling circumstances, none present in this case, a traffic stop for a traffic violation must be based on probable cause, and in this case it was not.

[A Comparison of the Indiana Statute with an Illinois Statute]

Indiana is right to be worried about the dangers created by persons who fiddle with their cellphones while driving, but probably wrong to outlaw such fiddling only with respect to texting—if only because the effect of slicing up drivers’ use of cellphones in this way has been to make the Indiana statute largely inefficacious, such is the difficulty of distinguishing texting from other uses of cellphones by drivers by glancing into the driver’s side of a moving automobile. The contrast with Illinois, which has a “hands-free” law, 625 ILCS 5/12–610.2 (a driver is forbidden to use a cellphone with his hands, as distinct from using bluetooth or other technologies that enable the driver to communicate without manipulating his cellphone), is striking. For while in 2013 only 186 citations were issued for violations of the Indiana texting law, more than 6700 citations were issued in Illinois for violations of the Illinois hands-free law. (These figures are from Zach Myers, “Texting Tickets: Police Unable to Enforce Indiana’s Texting and Driving Law,” FOX 59, May 21, 2014,–years–later–police–say–indianas–texting–and-driving–law–remains–unenforceable/  (visited February 16, 2016).)

My Thoughts

  • Judge Posner is my favorite author of appellate opinions. His writing style is less formal than most—e.g., his use of contractions (“whom for the sake of brevity we’ll call just Paniagua”) (emphasis added).
  • Judge Posner does not break up his opinions with titles or numbers or letters. He simply starts at the top and goes through until he finishes. It has been my practice to separate portions of the opinion with a hint of what is to come in order that a reader can skim the column and see what the case is about. I am certain that Judge Posner would not approve of this.
  • I think that Paniagua is a great starting point for any argument having to do with whether the officer had a reasonable suspicion for the stopping of a defendant or the seizing of property from him. Judge Posner’s examples are so crystal clear and make so very much sense.

Said & Done



When we extended kudos to TCDLA members recently certified in criminal law by the Board of Legal Specialization, we missed one: Steven J. Lieberman of Houston. Sorry, Steven, and congratulations.

Randy Brooks of Denton recently got a NOT GUILTY on a .24 blood-test DWI case. A witness testified that his client was swerving all over the highway, and that his client had bloodshot eyes (seen from the officer’s body camera). Randy successfully mounted a disconnect defense, attacking the labs in the right way, and the jury told him afterwards that his client’s eyes looked bloodshot throughout the trial (he had been in custody the whole time, so no, he wasn’t showing up drunk to court). Way to go Randy!

John C. Rentz of Denton heard some good news after a grueling trial. Client was charged with 4 counts of Indecency with Child under 14 by contact, with 2 alleged victims (allegations of under-the-clothes breast and genital touching for each child). Court allowed a 38.37 extraneous under-14 victim to testify to “attempted indecency by contact.” Client, the step-grandfather of the alleged victims (cousins), was alleged to have done the touching at his home while he and the children were watching movies with his wife (their grandmother) in the room. A week-long trial featured a Morton Act discovery violation: John learned they were going to offer a recording of a 1.5-minute portion of a 2-hour conversation between the grandmother and mothers of the victims. The recording, given to prosecution 6 months earlier by the family, had never been turned over. Judge, in excluding the audio and any testimony regarding the conversation, also commented that she believed that discovery of impeachment evidence goes to any witness, not just those sponsored by the State. Jury took 5 hours and came back not guilty on the 2 counts for one victim and hung on the other two counts. John is currently waiting to see if there will be a retrial on remaining counts. Good work, John, on a tough case.

Clay Conrad and Paul Looney report that the McLennan County Grand Jury in Waco failed to indict their clients and 37 more in the notorious Twin Peaks case. Neither the state nor the grand jury requested the cases should be continued and therefore they have been released from bond with no charges pending. Clay noted: “The case ended just the way we thought it would . . . The cases have all ended with a whimper, dismissed because there were no facts justifying the charges against them.” The grand jury’s term expired without an order extending the prosecution, so the cases were dismissed. Kudos to Clay and Paul for their part in the fight against the peculiar circumstances in Waco.

On February 29 and March 1, 2016, Patty Tress and Lisa Fox busted two jury panels in Dallas County in the 195th District Court on a Sexual Assault of a Child and Child pornography cases. The panel that was busted on February 29 had 77 panel members, and only 22 were left after for-cause strikes, so Judge Tinsley called a mistrial. On March 1, the panel of 77 was again busted, leaving only 16 after for-cause strikes. So Judge Tinsely called another mistrial. Stay tuned to see if they can ever get a jury in July!

Kudos to Denton-area attorneys for responding to our new editor’s call for kudos. Details are sketchy at this point, but the following enjoyed recent courtroom success: David Wacker got a Not Guilty on a four-count aggravated assault indictment, and George Roland also on an assault case. And definitely worth a mention, Earl Dobson and Susan Piel got the big NG on a cold case murder trial in Denton—on a 30-year-old case. The case involved a murder in 1983, when a victim was found with 35 stab wounds in a Denton hotel. In 2013, the national crime database linked D with fingerprints and then DNA to items at the scene and in the car used to leave the scene. D testified that it was self-defense, based on an attempted sexual assault. After four days, Earl and Susan heard the good news. Congratulations all around.