SJBE Southern Journal of Business and Ethics Volume 3, 2011 A publication of the Southern Academy of Legal Studies in Business (www.salsb.org) Volume 3, Southern Journal of Business and Ethics, 2011 SOUTHERN JOURNAL OF BUSINESS AND ETHICS EDITOR-IN-CHIEF M. P. (Marty) Ludlum Assistant Professor of Legal Studies College of Business University of Central Oklahoma WEB MASTER Joseph A. Zavaletta School of Business Boise State University SENIOR ADVISORY EDITOR William T. (Will) Mawer Dean, School of Education and Behavioral Sciences Southeastern Oklahoma State University ADVISORY EDITORS Darrell Ford Associate Professor of Legal Studies College of Business University of Central Oklahoma Raymond Teske College of Business University of Texas at San Antonio Dan Davidson College of Business Radford University The Southern Journal of Business and Ethics is an official publication of the Southern Academy of Legal Studies in Business ISSN: 1944-5474 Listed in: Cabell’s Directory, Ulrich’s Directory, and EBSCO Copyright to the contests of the articles published herein is retained by the respective authors. Copyright to the design, format, logo and other aspects of this publication is claimed by the Southern Academy of Legal Studies in Business. The views expressed herein are to be attributed to the authors and not to this publication, The Southern Academy of Legal Studies in Business, its officer, the editors, or any named college or university. The material appearing in this publication are for information purpose only and should not be considered legal advice or be used as such. For a specific legal opinion readers must confer with their own legal counsel. 1 Volume 3, Southern Journal of Business and Ethics, 2011 2 Volume 3, Southern Journal of Business and Ethics, 2011 From the Editor-in-Chief. This is the 3rd volume of the Southern Journal of Business and Ethics, an official publication of the Southern Academy of Legal Studies in Business. The Journal is being published in hardcopy and electronically on the Southern Academy’s web page at http://www.salsb.org. One important update for this year, SJBE has been included in Ebsco Host services, allowing for full text search on most university library systems! This provides a great benefit to our authors and readers! All articles that appear in this volume of the Southern Journal of Business and Ethics have been recommended for publication by the Advisory Editors, using a double, blind peer review process. A personal thanks is extended to the Advisory Editors for all their hard work and dedication to the Journal and the Southern Academy; without their work, the publication of this Journal would be impossible. This is my third year as Editor-in-Chief, and I wish to express my sincere thanks and appreciation to all the Officers of the Southern Academy for their support, encouragement, assistance and advice throughout this year. I would like to further express appreciation to Will Mawer of Southeastern Oklahoma State University, for his efforts in coordinating the entire process. The publishing of this journal is an intense educational experience which I continue to enjoy. Many of the papers herein were presented at the Southern Academy of Legal Studies in Business meeting in San Antonio, Texas, March, 2011. Congratulations to all our authors. I extend a hearty invitation to the 2012 meeting of the SALSB in San Antonio, Texas, March 8-9-10, 2012. The Southern Academy annual meeting has been voted the “BEST REGIONAL” among all the regions affiliated with the Academy of Legal Studies in Business (ALSB) featuring over 60 authors and 50 papers. I hope to see ya’ll in San Antonio! Please check the web site (www.salsb.org) for further information. To further the objectives of the Southern Academy, all comments, critiques, or criticisms would be greatly appreciated. Again, thanks to all the members of the Southern Academy for allowing me the opportunity to serve you as editor-in- chief of the Journal. M.P. (Marty) Ludlum Editor-in-Chief Southern Journal of Business and Ethics www.salsb.org 3 Volume 3, Southern Journal of Business and Ethics, 2011 4 VOLUME 3 (2011) SOUTHERN JOURNAL OF BUSINESS AND ETHICS Title Page . 1 Editorial Policy . 3 Table of Contents . 5 Managing Federal Estate Tax Liability with Texas Family Limited Partnerships David Ritter and John F. Shampton . 7 Severance v. Patterson: Does Enforcement of the Texas Open Beaches Act Constitute a “Taking” Alix Valenti . 19 Where Have All the Lawsuits Gone? The Curious Case of Section 109 of the Other Civil Rights Act Margaret Langford . 33 Fighting Futility II: More Tools for Mediation Success Charles Bultena, Charles Ramser, and Kristopher Tilker . 42 Implications of the Melendez-Diaz Supreme Court Decision Daphyne Saunders Thomas, David L. Parker, and Terry S. Kelly . 57 Glass Ceiling and Maternity Leave as Important Contributors to the Gender Wage Gap Maria Florencia Cabeza, Jennifer Barger Johnson, and Lee J. Tyner . 73 I’m in the Band, Now what do I do? An Analysis and Application of Business Law Principles to the Formation and Operation of a Band Raymond H.C. Teske III, Rodolpho Sandoval, and Larry A. Bruner . 87 Libel Tourism and International Forum Shopping: The United States says “No Sale” (The Speech Act of 2010). Mary Rau-Foster and Brad Reid . 107 New Process Steel, LP v. NLRB: Quorum Issues and their Impact on Federal Labor Code Enforcement Robert K. Robinson, Dave L. Nichols, Sam Cousley, and Frank B. Markham . 119 Towards a Better Understanding of the Surge of Interest in Business Ethics Instruction John L. Keifer and Mary Carter Keifer . 127 Ethical Behavior of Graduate Business Students: An Examination of the Effect of Age, Gender, GPA, and Work Experience Sanjay Gupta, Edward D. Walker II, and Nancy J. Swanson . 137 Bankruptcy Code Section 727(a)(3): When is a Debtor’s Record Keeping Sufficient to Merit a Bankruptcy Discharge? William T. Mawer, Andrew F. Emerson, and John Love . 153 Integrating Corporate Social Responsibility with a Risk Management Methodology: A Strategic Approach Lila L. Carden and Raphael O. Boyd . 167 Notes for authors . 172 Volume 3, Southern Journal of Business and Ethics, 2011 6 Volume 3, Southern Journal of Business and Ethics, 2011 7 Volume 3, Southern Journal of Business and Ethics, 2011 MANAGING FEDERAL ESTATE TAX LIABILITY WITH TEXAS FAMILY LIMITED PARTNERSHIPS * DAVID RITTER ** JOHN F. SHAMPTON INTRODUCTION Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.1 The Family Limited Partnership in Texas has, for many years, been known as a useful estate planning tool. With the temporary expiration of the federal estate tax in 2010 (and the adoption of the Texas Business Organizations Code2), it might well have been speculated that the era of the FLP was over. Whether this attitude was correct or not, however, the return of the estate tax in the form of a two-year interim imposition leads us to re-examine the use of the FLP and conclude that it does, in fact, have a potentially useful role in reducing the net taxable value of an estate. This outcome is a product of basic valuation concepts applied from the field of financial economics, allowing the use of the FLP to reduce tax burdens as well as facilitate preservation and control of family businesses (the traditional strength of the FLP). In addition, the FLP can even provide a bonus in the form of a modicum of protection against claims unrelated to the FLP’s business. Financial theory calls for increased rates of return on investments that present higher levels of risk. This “risk premium” can be expressed in the form of higher dollar returns or, alternatively, as a lower value for the asset in question. Thus, even the IRS concedes that the valuation of assets placed in an FLP is negatively affected by the difficulty of transfer of such limited partnership interests (sometimes referred to as “liquidity risk”) and by the lack of control * DBA, Associate Professor of Accounting, Texas A&M University Central Texas, Killeen, Texas. ** PhD, Adjunct Professor of Finance and Economics, Texas A&M University Central Texas, Killeen, Texas. 1 Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934) (Learned Hand, J.), aff'd 293 U.S. 465, 55 S.Ct. 266. 2 Wassdorf, Lorna and Carmen Flores, LLCS AND PARTNERSHIPS, THE VIEW FROM THE SECRETARY OF STATE’S OFFICE, (2010). 8 Volume 3, Southern Journal of Business and Ethics, 2011 resulting from the nature of that vehicle. Both of these features support discounting the value of 3 the assets in question for estate tax purposes – the only issue for the Service is by how much. LIMITED PARTNERSHIPS IN GENERAL. Although well known in Texas (and the several states that have recognized the FLP or its equivalent) under the specific name “Family” Limited Partnership, the word “family” cannot be found in the BOC or its predecessor, the Texas Revised Limited Partnership Act (RLPA).4 A Family Limited Partnership is, in fact, distinguished from an “ordinary” Limited Partnership only by its use and not by any detail of its formation or other legal characteristic. Historically, a partnership is a creature of the common law coming into existence upon the mutual agreement of two or more persons to act in concert to do business without any formality or even an express agreement.