Supreme Court of Texas Blog: Legal Issues Before the Texas Supreme Court
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Upcoming event: “An evening with the Texas Supreme Court” on April 17, 2014 in Austin

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On Thursday April 17, the Civil Appellate Section of the Austin Bar is hosting “An Evening with the Texas Supreme Court.” This has become a [...]

On Thursday April 17, the Civil Appellate Section of the Austin Bar is hosting “An Evening with the Texas Supreme Court.” This has become a well-attended biennial event. If you want a sense of what topics are covered, I blogged about the 2012 and 2010 events.

The “evening” begins at 4:30, with a ninety-minute substantive panel of the Justices. There seven Justices listed on the announcement, so the panel should offer a broad view. A reception follows the panel, from 6:00 to 7:00.

Thursday, April 17, 2014 · 4:30–7:00 InterContinental Stephen F. Austin Hotel 701 Congress Avenue · Austin, Texas $25 if paid in advance, $30 at the door

You can find details about how to register, or how to suggest questions for the panel, on this page.

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Quiet orders list [Apr. 11, 2014]

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The Texas Supreme Court did not issue any opinions or choose new cases for oral argument with today’s orders list.

The Court’s calendar for next week [...]

The Texas Supreme Court did not issue any opinions or choose new cases for oral argument with today’s orders list.

The Court’s calendar for next week shows an internal conference. The following week, the Court will hear oral argument in a parental-rights termination case.

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Does an employee’s awareness of a premises defect eliminate the employer’s duty to maintain a safe workplace? [Apr. 4, 2014]

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With today’s orders list, the Texas Supreme Court agreed to answer the Fifth Circuit’s certified question about a fuzzy intersection between Texas employer-employee law and [...]

With today’s orders list, the Texas Supreme Court agreed to answer the Fifth Circuit’s certified question about a fuzzy intersection between Texas employer-employee law and Texas premises liability law. The Court will now receive merits briefs, with oral argument likely to be held in the fall.

Certified question about what duty an employer owes to an employee over a premises defect

RANDY AUSTIN v. KROGER TEXAS, L.P., No. 14-0216

Granted for argument on April 4, 2014
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This is a slip-and-fall case with a twist: The injured person was an employee who was cleaning up the spill:

Kroger’s Safety Handbook provided that store management should “make certain that the Spill Magic Spill Response Stations [were] adequately supplied at all times” and available in numerous places throughout the store. Spill Magic allows an employee to clean a liquid spill with a broom and dustpan, and — according to Kroger’s Safety Handbook — reduces the likelihood of a slip-and-fall by 25 percent. Because there was no Spill Magic on premises that day, Austin cleaned the spill with a dry mop instead. When Austin moved on to the men’s restroom, he saw that the same substance covered about 80 percent of the floor. Austin placed “Wet Floor” signs inside and outside of the room, and proceeded to mop the spill for about thirty to thirty-five minutes. Austin took “baby steps” in and out of the restroom to change out the mop head numerous times, and successfully removed about thirty to forty percent of the liquid.

At about 10:30 a.m., while continuing to remedy the spill, Austin fell. He sustained a left femur fracture and severely dislocated his hip. He spent nine months in the hospital and underwent six surgeries, and his left leg is now two inches shorter than his right.

The employer did not subscribe to the Texas Workers Compensation system, so the claim falls through to common law.

The federal court decided that at least part of the case — a conventional negligence theory based on failure to provide the employee with “a necessary instrumentality” (the Spill Magic) — should be remanded to the federal district court for further proceedings. What it did not know was whether the premises liability theory was also viable — or whether that theory is precluded under Texas law.

So, it has certified the question:

Pursuant to Texas law, including §406.033(a)(1)–(3) of the Texas Labor Code, can an employee recover against a non-subscribing employer for an injury caused by a premises defect of which he was fully aware but that his job duties required him to remedy? Put differently, does the employee’s awareness of the defect eliminate the employer’s duty to maintain a safe workplace?

The Fifth Circuit detailed its analysis of the underlying “tension” within these branches of Texas tort law in its opinion certifying the questions.

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Texas Supreme Court halts disclosure of identity of pharmacies supplying execution drugs

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The Texas Supreme Court does not often touch issues relating to the death penalty. Criminal appeals and habeas questions go, instead, to the Court of [...]

The Texas Supreme Court does not often touch issues relating to the death penalty. Criminal appeals and habeas questions go, instead, to the Court of Criminal Appeals.

But the latest hot-button aspect of the death penalty — the supply of the execution drugs — did make an appearance on the docket.

On Thursday, a district court in Austin ruled that officials had to reveal the identity of its supplier. The Public Information Act suit was pursued on behalf of two prisoners currently scheduled to be executed in early April. Previous suppliers in Texas and other states have been sued or faced public pressure, leading them to stop providing lethal-injection drugs.

The Austin Court denied a stay on Friday. That very brief opinion conveys the court’s impression that the release of information would be limited: “The order compels disclosure of the requested information to a limited group of attorneys, with further limitations on their use or disclosure of the information.”

Later on Friday, the Texas Supreme Court was persuaded to issue a stay stopping the release: IN RE TEXAS DEPARTMENT OF CRIMINAL JUSTICE, No. 14-0243 .

The Court has set a merits briefing schedule with dates falling in mid- and late April. (The Texas Supreme Court has no power to alter the execution dates, a question which will be handled by courts with criminal jurisdiction.)

Coverage: AP/Dallas Morning News

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Can the Legislature prevent a court from striking down a statute on constitutional grounds until 45 days after the AG has been notified?

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That’s the question that the Texas Court of Criminal Appeals, which has the final say on state criminal matters, answered last week.

After the criminal court [...]

That’s the question that the Texas Court of Criminal Appeals, which has the final say on state criminal matters, answered last week.

After the criminal court struck down on First Amendment grounds the Texas criminal statute that had been applied to “sexting” with an underage participant, the AG sought rehearing. One reason offered by the AG’s office is that it had not been formally notified of a constitutional challenge under Texas Government Code 402.010. In denying that rehearing, the Court of Criminal Appeals addressed why it viewed that notice provision as unconstitutional.

The core reason is separation of powers. Section 402.010 provides that a court must forward notice to the attorney general when a party has raised a constitutional challenge, and that “[a] court may not enter a final judgment holding a statute of this state unconstitutional before the 45th day after” such notice is given.

The CCA refused to abide this limitation on its authority to act as a court:

… the potential length of the delay is not so much the problem as the fact of the attempted interference at all. Entering a final judgment is a core judicial power; it falls within that realm of judicial proceedings “so vital to the efficient functioning of a court as to be beyond legislative power.” Thus, the 45-day time frame provided for in subsection (b) is a constitutionally intolerable imposition on a court’s power to enter a final judgment and a violation of separation of powers.

Rehearing Opinion at 6.

In a concurrence, Presiding Judge Keller made two further points. First, that in one year, the CCA disposed of “well over nine thousand matters” in which many made such a claim. Second, that the CCA website makes available “a list of the issues upon which discretionary review has been granted.” Concurrence at 2-3

What does this mean for civil cases?

The statute applies to both civil and criminal cases. The CCA has made plain that it does not think criminal courts and, presumably, courts of appeals hearing criminal dockets need not comply. But the CCA does not have jurisdiction over civil cases.

The question becomes: What does SCOTX think of this notice requirement?

The Context in Which It May Be Answered: The Same-Sex Divorce Cases

The notice statute, it turns out, was passed by the Texas Legislature in 2011 — in the wake of the AG complaining that its office had not been notified about a constitutional challenge lurking in a divorce decree to a gay marriage. There, the AG sought to intervene after the fact, asserting an interest in defending the state’s laws.

The trial court and Austin Court denied that request; that case is now pending before the Texas Supreme Court as IN RE STATE OF TEXAS, No. 11-0222 .

At oral argument, there was substantial discussion about the source and nature of the Attorney General’s interest to intervene in private lawsuits. Oral Argument Tr. at 14-18 Although Section 402.010 could not be the source of that authority in In re State — because it was enacted after-the-fact — it was discussed as reflecting the same concerns.

It’s conceivable that the Texas Supreme Court will decide the narrow issue in IN RE STATE OF TEXAS, No. 11-0222 without ever mentioning Section 402.010 — certainly, it would not strictly need to discuss a statute enacted after the fact. But not mentioning the statute would be curious, given its provenance and role at oral argument. And it seems unlikely that the Court could mention the statute without acknowledging that its sister court of last resort had held that to violate the separation of powers.

The Texas Supreme Court has not taken warmly to legislative attempts to cut short its consideration of constitutional issues. Whether it embraces legislative attempts to slow down judicial resolution of constitutional issues remains to be seen.

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Two opinions, one rehearing grant, and six grants [Mar. 21, 2014]

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With this week’s orders list, the Texas Supreme Court issued two opinions and chose six more cases for oral argument this fall.

Opinions Liquidated damages clause: Not [...]

With this week’s orders list, the Texas Supreme Court issued two opinions and chose six more cases for oral argument this fall.

Opinions

Liquidated damages clause: Not as “liquidated” as you might think

In a technical case about renewable-energy credits in the (somewhat) deregulated electricity market, the most interesting (and widely applicable) holding is likely to be the Court’s treatment of liquidated damages. Here, the parties had agreed to a liquidated damages formula that led to a $29 million figure, while the evidence suggested that a true after-the-fact figure would have been closer to $6 million.

So, does the parties’ agreement about damages hold, or does a later court refuse to enforce the provision?

The Texas Supreme Court began with a two-part test, looking at (1) whether the harm is difficult of estimation and (2) whether the measure of liquidated damages is a reasonable forecast of just compensation. (Slip op. at 18) The Court stated that it “evaluate[s] both prongs of this test from the perspective of the parties at the time of contracting.”

Even so, the evidence of actual damages is not irrelevant. Rather, if they are “much less than the amount contracted for,” that can be evidence that the original estimate was (in hindsight) unreasonable.

Here, the Court found that the contract “on its face, reasonably forecast[s] damages,” but that was not enough. The Court looked at how the business relationships here, and the regulatory environment, evolved in the decade after the contract was entered. It noted that (by administrative rule) some of the possible “damage” was discharged when the contract was assigned to a different kind of energy company. It noted that a different provision was pegged to either $50 or twice the market value as determined by the PUC. The PUC, however, declined to announce such a price — so the parties fell back to the $50 figure.

The Court held that where there is “an unbridgeable discrepancy between liquidated damages provisions as written and the unfortunate reality in application, we cannot enforce such provisions.”

The Court stated that it was not making new law, but it also offered no guidance to parties about how to draft liquidated damages provisions in complex transactions that can be accurate enough. I don’t have a clear answer to that, either.

The most obvious reading of the holding is that, on these facts, a ratio of nearly 5:1 is simply too much to bear, no matter what risks the parties may have been allocating. Liquidated damages provisions are then a sort of presumption that can be defeated with proof of a competing measure of damages so low as to be “unbridgeable.”

A different reading of “unbridgeable discrepancy” would focus on the two specific factors the Court discussed in its analysis — both of which related to regulatory assumptions made by the parties that proved unfounded. In this view, the situation is more akin to mutual mistake, in which the parties did not mean to allocate those two regulatory risks at all. The question then would be whether there is a logical bridge, rather than a quantitative one.

You can take your pick. Or you can do what I’m likely to do: argue from both approaches.

Contractual subrogation clauses squeeze out possible equitable subrogation claims

The Court applied its reasoning from Fortis Benefits v. Cantu that language about subrogation in an insurance contract prevented the insurer from relying on equitable remedies covering the same ground.

This case involved a subrogation clause, but also included clauses that imposed duties on an insured to make regular reports, to use due diligence, and not to make misrepresentations in applying for the policy, among others. The Court held that the insurer was bound to its contract language for these, and could not rely on equitable analogues to these defenses covering the same ground.

Rehearing Grant

The Court granted rehearing of a petition it had denied last year, ALLEN MARK DACUS, ELIZABETH C. PEREZ, AND REV. ROBERT JEFFERSON v. ANNISE D. PARKER AND CITY OF HOUSTON, No. 13-0047 . The case is back on the petition docket; the Court has not yet chosen to grant the case on its merits.

The challenge is to a recent City of Houston ballot item, raising questions about what standards to use in evaluating whether voters were adequately informed (by the ballot language or otherwise) about the contents of what they were being asked to approve.

Grants for Oral Argument

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Another quiet orders list [Mar. 14, 2014]

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It’s no surprise that the Court’s orders are light during what passes for Spring Break in Austin. There were no opinions issued and no cases [...]

It’s no surprise that the Court’s orders are light during what passes for Spring Break in Austin. There were no opinions issued and no cases chosen for argument with this week’s orders list.

The Court’s next internal conference is scheduled for March 17 and 18.

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Quiet orders list [Mar. 7, 2014]

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With its March 7 orders list, the Texas Supreme Court issued no opinions and chose no new cases for review.

The Court’s next internal conference is [...]

With its March 7 orders list, the Texas Supreme Court issued no opinions and chose no new cases for review.

The Court’s next internal conference is scheduled for March 17 and 18.

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