Supreme Court of Texas Blog: Legal Issues Before the Texas Supreme Court
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Category: 'Order Lists'

Texas’s same-sex divorce cases result in a deep divide — over the power of the Attorney General [Jun. 19, 2015]

June 19th, 2015 · No Comments

With today’s orders, the Texas Supreme Court issued opinions in four cases. It granted one petition for review and accepted a certified question from the Fifth Circuit.

Today’s same-sex divorce cases

The Texas Supreme Court had seemingly been waiting for the U.S. Supreme Court to speak clearly about same-sex marriage before resolving some cases about whether Texas courts could grant a divorce to a same-sex couple married in another state.

But with today’s orders, the Texas Supreme Court decided to speak first. That choice of timing is readily explained by the actual substance of the ruling. The Court split 5-3 on procedural questions about the proper role of the attorney general under Texas law, a question that would not be resolved by the U.S. Supreme Court’s decision. The Court held that the Attorney General could not wait until after judgment to intervene and that it was improper, in this case, to file a mandamus petition directly in the Texas Supreme Court. (There was a majority opinion, a concurrence, and two dissents, which are also linked under the “Opinions” heading below.)

You may recall that the Texas Supreme Court originally was considering two same-sex divorces, not one. There was another parallel case out of Dallas, in which the Attorney General had filed an intervention in the trial court before judgment. See IN THE MATTER OF THE MARRIAGE OF J.B. AND H.B., No. 11-0024 That case thus avoided some of the procedural problems that the Court grappled with in today’s opinions. Unfortunately, however, one of the spouses in the Dallas case passed away this April. The surviving spouse then asked the Court to dismiss the petition as moot. The Court, with today’s orders list, granted that dismissal.

Still, today’s opinions may not be the last word, either on the substance or the role of the AG. The Court’s docket includes two other same-sex marriage petitions, which revolve around the Attorney General’s challenge to a same-sex marriage license granted earlier this year in Travis County, which followed a probate judge’s declaration that the law was invalid:

At a broad level, both of those involve questions about the Attorney General’s role. At a narrower level, both are framed as mandamus petitions directly to the Texas Supreme Court, skipping the intermediate court of appeals, a procedural device frowned upon in today’s opinions.

Even beyond those procedural overlaps, Justice Willett’s dissent today makes explicit mention (at page 10) of the situation in Travis County that forms the basis of those still-pending petitions. Speaking for three Justices, he argues for the importance of the statute requiring notice to the Attorney General prior to declaring a state law invalid (Government Code §402.010). The majority today does not discuss that statute; the Court of Criminal Appeals has, as I wrote about last year, held this provision to be an unconstitutional infringment on judicial power.

These petitions have not been chosen for argument, or even for full merits briefing. Most likely, the Court is waiting to see what the U.S. Supreme Court does on the larger question. But at some point, we are likely to find out whether Government Code 402.010 is a limit on judicial power in civil cases.

Update on the Docket

By my count, the Court has decided nearly all of the cases that have been argued, with just eight argued cases remaining overall — five of which were just argued in late March. The Court appears well within range of meeting the Chief’s stated goal of having no cases remaining by the end of its term in August.

Programming Note

You may have noticed that parts of the blog are under construction. This includes a new format to the case summaries (below), which are wired very differently behind the scenes. This has some immediate advantages (the case status is now updated on old posts and you can access links to related news articles easily). I have some larger plans for these summaries that are, as you might guess, still under construction.

In the meantime, I apologize for the dust.

Opinions

The AG lacked standing, on this record, to challenge a same-sex divorce issued before he intervened in the case

Let's start with the questions this case does not reach. There is no holding here about the constitutional status of same-sex marriage. Nor does the Court reach the question whether a Texas court can as a general matter grant a same-sex divorce to a couple that was married in another state. A district court that grants such a divorce (or, as happened in Travis County in February 2015, a marriage license) is on no different legal footing after these opinions than it was before.

The Texas Supreme Court's analysis may not have longlasting implications for same-sex marriage or divorce, but it could be crucial to how the next hot-button political issue is litigated by the State.

This challenge was brought by the Attorney General, who was not (obviously) a party to this marriage or (less obviously) a party to the underlying lawsuit. The same-sex couple sought a divorce and, after some disputes being aired at a hearing, eventually agreed on terms. The judge, recognizing that it was unusual to grant a same-sex divorce, nonetheless entered judgment on the divorce decree reflecting the parties' agreed terms. As it turns out, members of the attorney general's office were observing this proceeding. But the office did not seek to formally intervene in the case until after the judgment (divorce decree) was announced. The trial court did not reopen the case to permit that intervention.

The threshold question is whether the Attorney General, although a stranger to this divorce, can pursue appellate remedies to challenge its validity. The Court, divided 5-3, held that at least on the particular circumstances presented here, he could not.

The Attorney General used two different procedural tools to raise the issue: (1) trying to intervene in the divorce case itself, a request that was denied by the trial court, and (2) eventually seeking a writ of mandamus directly from the Texas Supreme Court. Matters of timing became crucial. The AG had not asked to intervene until after the decree was granted. When the trial court did not reopen the case so the AG could participate, the AG filed an appeal to the intermediate court of appeals. When the court of appeals ruled against the AG, he then sought review in the Texas Supreme Court, adding a second basis for jurisdiction—a request for a writ of mandamus arguing that the trial judge exceeded his jurisdiction.

Whether the AG was a proper party to the appeal turned out to be dispositive.

The Court divided 5-3 on this question, ultimately deciding against the AG. The Court held that the AG was not a party to the appeal, either by virtue of Texas statute or a common-law doctrine of virtual representation. The Court observed that the AG had actual notice of the divorce proceedings, with at least one member of the office attending, but chose not to intervene before judgment. It held that, given those circumstances, the trial court was within its discretion not to reopen the divorce decree it had already granted. 1

The AG argued that, even if it did not successfully intervene as a party in the trial court, it should be considered a virtual party for purposes of appeal. The AG's office conceded that it did not meet the usual test for "virtual representation," which would let one party step into the shoes of another. Instead, the office argued that it should be afforded that same status for reasons of equity based on the importance of the issue and the AG's unique role in defending state law. The Court rejected that argument, reasoning that equity could not be used to create standing where none existed.

As for the writ of mandamus, the Court held that it simply came too late. The AG had conducted the full appeal in the court of appeals without bringing the mandamus issue to its attention. In effect, the Court held that this theory was waived by not presenting it to the court of appeals below.

Although the Court ruled 5-3 that it lacked jurisdiction to decide the merits of the case, several of the opinions spoke to the question—and to the lack of precedent that the Court meant to set with today's case. The majority opinion, for example, said that "even if the State could establish standing," the abbreviated way the case was litigated "would have [left the Court] little choice but to remand" the substantive issues to be more fully developed below. Justice Boyd wrote a separate concurrence underscoring that, precisely because the AG was not a party, any legal issues implicit in this divorce decree were not binding on the State so as to set precedent for any future cases. For that reason, Justice Boyd explained, the only appellate opinion speaking to the issue was that of the Dallas Court of Appeals in another case, an opinion holding that any same-sex divorce would violate Texas law. Justice Devine wrote his own separate dissent, delving into the substance of the same point.

Justice Willett's dissent spoke to the procedural question, concluding that "[i]ntervention is an equitable doctrine, and I simply balance the equities differently." He noted that, if the State's position about the substance turns out to be correct (that the courts actually lack subject-matter jurisdiction to issue a divorce, in this situation), there may still be uncertainty about the validity of this divorce. Those complications are left for another day, if they are not swept aside by changes in federal law.


  1. Future cases may turn on whether the AG's office has a similar opportunity to intervene or whether, in the view of an appellate court, the trial court was attempting to evade its involvement. There is a hint of this in how Justice Willett's dissent discusses another, still-pending case challenging the issuance of a same-sex marriage license time-stamped one minute after the action was filed. 

The opinions above were consolidated with IN RE STATE OF TEXAS, No. 11-0222 , the State’s unsuccessful mandamus petition.

Who can object to release of business-sensitive contract details under the Texas public-information act?

The question was whether a business can object to the government releasing information under the Public Information Act “that, if released, would give advantage to a competitor or bidder.” Tex. Gov't Code §552.104.

Here, the business was Boeing, which had a government contract related to Kelly Air Force Base. That contract, in turn, contained some terms reflecting details of Boeing's internal cost structure. When a former government employee filed an open-records request for the contract, the Attorney General agreed to release it. Boeing filed suit to stop the release, arguing that certain specific financial terms should be redacted so they would not aid its competitors in bidding for other aerospace projects.

The Court divided 7-1 on the judgment, but agreed 8-0 that Boeing was a proper party to raise this sort of objection.

The Attorney General had argued that this "competitor or bidder" exception only inured to the benefit of the government, thus permitting the government to waive objections to the release. Boeing argued that the statute was also meant to protect third parties whose private information might be disclosed. All of the Justices agreed with Boeing on this point.1

The majority held that, not only was Boeing a proper party to raise this sort of objection, but that it had conclusively established its right to block the release of this information. "No reasonable trier of fact could conclude that Boeing has no competitors, that the Defense Department won’t re-bid its contracts, or that the physical plant is not the biggest variable cost in such bids. The undisputed evidence allows only a single logical inference—that the information at issue 'if released would give advantage to a competitor or bidder.'" The Court thus held that the information was exempt from disclosure and should not be released.

Justice Boyd's dissent would have held that Boeing, although a proper party to raise this objection, had failed to present conclusive proof that the release of the information "would give advantage to a competitor or bidder," not merely that it was theoretically possible. More specifically, the dissent would have required that a party seeking to invoke this exception "must at least establish the existence of a specific competitor with whom the party is currently or will soon be engaged in a particular competition, and how the information would, in fact, give the competitor an advantage in that particular competition." Finding that evidence of harm lacking, Justice Boyd would have ordered the information released.


  1. Both the majority and concurrence also shared another feature: express reliance on the concurring opinion that Justice Pemberton filed in the court of appeals. That concurrence was quoted multiple times in Justice Devine's majority, which adopted its statutory analysis. And Justice Boyd's dissent opens by saying, "Essentially for the reasons expressed in the court of appeals’ concurring opinion, ... I dissent." 

Evidence needed to show gross negligence under the Recreational Use Statute

This is a suit against a city by the family of two girls and their father who were killed by rip currents near the Texas City Dike while swimming. The plaintiffs argue that the City should have posted more warnings or even closed the area to swimming because of the risk. The City lost its plea to the jurisdiction, but the court of appeals ruled in its favor, dismissing the claims. The petition argues that the claim should be allowed to move forward because, in part, warning signs that had previously been present signaled awareness of the problem — or at least would permit a fact-finder to draw such an inference.

The beach in question was damaged extensively by Hurricane Ike. When it reopened, after two years of repairs, the City did not replace all the warning signs that had previously been present. Those hsigns warned of the risks of swimming and diving.

The Texas Supreme Court granted the petition but ultimately affirmed the court of appeals, concluding that the evidence fell short of what would be required to show gross negligence: "[T]here is no evidence that the municipality had knowledge of concealed conditions at the beach creating an extreme risk of harm."

The Supreme Court noted that the case involved a recreational use of property and, thus, any claim against the landowner (the City) would have to prove gross negligence as defined in the statute, which requires both that the action involved objectively "involves an extreme degree of risk, considering the probability and magnitude of the potential harm to others" and that the defendant "has actual, subjective awareness of the risk involved, but nevertheless proceeds with conscious indifference to the rights, safety, or welfare of others." Tex. Civ. Prac. & Rem. Code §41.001(11).

The opinion focused primarily on the signage and, particularly, whether it represented prior knowledge of the particular risks involved. The Court held that it would be improper for a fact-finder to draw such an inference. The opinion invoked the equal-inference rule, concluding that generic signs about the risks of swimming were "equally consistent with mere knowledge of risks inherently associated with open-water swimming" and thus did not show "subjective awareness of and conscious indifference" to the specific types of marine hazards involved in this accident. As such, the Court concluded, they are not evidnece that the City was aware of risks beyond those that would already be known to a recreational swimmer.

Finding no evidence of gross negligence, the Court affirmed the court of appeals's dismissal.

Grants

When can a district clerk seek to collect court costs from indigent pro se litigants?

Until it was enjoined, the Tarrant County district court clerk's office sought to collect court costs, even against parties who had been classified as indigent.

The collections happened in cases where the district court's final judgment included language awarding such costs, against one party or the other.

The county's position is that the clerk should not be in the business of second-guessing the judgment but, instead, should follow it to the letter. In the county's view, the proper route for an indigent party to challenge these costs is by filing a motion in the district court to "re-tax" them.

The plaintiffs argue that the district clerk's office is exceeding its power by pursuing collection activity after the determination of indigence. The argument has been framed as an ultra vires claim, contending that the clerk's office is powerless to collect in this situation, whether or not the judgment is modified.

The county answers that this type of broad injunction is inappropriate because Texas law requires that challenges to the execution of a judgment must be brought in the specific district court that rendered the judgment — thus defeating a broad injunction and bolstering their argument that only the district court can modify the judgment's terms.

When does a home-equity lender forfeit all of the principal and interest under the note?

TERESA GAROFOLO v. OCWEN LOAN SERVICING, L.L.C., No. 15-0437

Set to be argued on June 19, 2015

The Fifth Circuit has certified another question to the Texas Supreme Court about the meaning of Texas's constitutional provision relating to home-equity lending.

Here, the homeowner made all their payments, completing their obligations under the note. But — perhaps contrary to a contractual provision and this portion of the Texas Constitution — the holder of the note did not send the homeowner the cancelled promissory note or a release of the lien. When this remained uncured, the homeowner filed suit for a violation of Article XVI, § 50(a)(6)(Q)(vii) the Texas Constitution and for breach of contract. The remedy she sought was "forfeiture of all principal and interest paid pursuant to the note."

As the Fifth Circuit explained, the district court had dismissed the constitutional claim on the ground that the Constitution merely required the term be included in the contract, but that violating it was not of constitutional dimension:

[The holder of the note] Ocwen contended that the Texas Constitution is satisfied by merely including such a requirement in the terms of the Security Instrument. Because the Security Instrument here included that requirement, Ocwen asserted that [the homeowner] Garofolo did not suffer a constitutional injury. Ocwen’s motion to dismiss also argued that Garofolo did not allege actual damages, a predicate to recovering money damages for breach of contract. The district court agreed with both arguments.

There appears to be little dispute that the lender's conduct here violated the contractual terms. The question is whether any remedy exists. The lender has argued both that the Constitution merely requires the term by included in a contract and that Texas contract law would require a party to prove up actual damages before obtaining the remedy of forfeiture. The Fifth Circuit recognized that the combination would "render the requirement a virtual nullity except in the (hopefully rare) circumstance where a lender unscrupulously attempts to enforce a paid note resulting in recoverable damages." Nonetheless, it saw the remedy sought by the homeowner as a "drastic remedy."

The Fifth Circuit has certified both claims to the Texas Supreme Court:

  1. Does a lender or holder violate Article XVI, Section 50(a)(6)(Q)(vii) of the Texas Constitution, becoming liable for forfeiture of principal and interest, when the loan agreement incorporates the protections of Section 50(a)(6)(Q)(vii), but the lender or holder fails to return the cancelled note and release of lien upon full payment of the note and within 60 days after the borrower informs the lender or holder of the failure to comply?

  2. If the answer to Question 1 is “no,” then, in the absence of actual damages, does a lender or holder become liable for forfeiture of principal and interest under a breach of contract theory when the loan agreement incorporates the protections of Section 50(a)(6)(Q)(vii), but the lender or holder, although filing a release of lien in the deed records, fails to return the cancelled note and release of lien upon full payment of the note and within 60 days after the borrower informs the lender or holder of the failure to comply?

Tags: Case Notes · Order Lists

No opinions or grants [Jun. 5, 2015]

June 5th, 2015 · Comments Off on No opinions or grants [Jun. 5, 2015]

The Court did not issue any opinions with today’s orders list.

The orders list was longer than some past weeks, as the Court denied review in a number of petitions that it had studied after full briefing. Normally, that happens after an internal conference. The Court’s calendar for June shows a conference every Tuesday, so we may see more of this — and perhaps some grants — in coming weeks.

Tags: Order Lists

SCOTX approves a double-derivative shareholder suit over board objections, at least for closely held corporations [May 29, 2015]

May 29th, 2015 · Comments Off on SCOTX approves a double-derivative shareholder suit over board objections, at least for closely held corporations [May 29, 2015]

With today’s orders list, the Court issued one opinion in a case about derivative suits inside closely held corporations.

Shareholders in closely held corporations can bring derivative suits that would be barred to shareholders in public corporations

When family businesses are run as closely held corporations, can a shareholder bring a derivative suit more easily than could a shareholder in a public company? And does organizing a family's business into different layers of subsidiaries insulate some actions from review?

This derivative suit was brought by the 24% owner of a closely held corporation, against the wishes of that corporation's board. The suit was prompted by a bad business deal that was actually entered, not by that corporation but instead by a wholly owned subsidiary focused on a specific line of business (making this a so-called "double-derivative claim").

The trial court dismissed for lack of standing. The court of appeals reversed, concluding that the controlling Texas statute does not impose the same hurdles to bringing a derivative suit for closely held corporations.

The Texas Supreme Court agreed with the court of appeals, remanding to the trial court for the claim to move forward.

Standing: The defendants argued that the deference generally shown to corporate boards in the form of the business-judgment rule should extend to a board decision whether to pursue a claim and, thus, a shareholder lacks standing to bring a claim of which the board disapproves.

The Court acknowledged that the business-judgment rule does indeed apply to protect the general decisions of boards, even boards of closely held corporations. But it rejected the argument that this created a shield against derivative claims.

The Court rested that analysis on the statute governing derivative suits, in which it found a Legislative decision that stakeholders in closely held corporations should have more ready access to derivative suits. The specific provision is former Article 5.14(L),1 which excluded closely held corporations from some of the particular formalities of bringing such suits — including requirements that the potential derivative claims first be presented to the board and giving the board the opportunity to bring them itself. Because the Legislature carved closely held corporations out of those requirements, the Court reasoned, using the business-judgment rule to create a barrier to derivative claims would would contravene the Legislature's intent.

The Court also rejected the argument that a shareholder must plead and prove particular conduct that violates the business-judgment rule in order to have standing. It noted the longstanding concern in Texas law with carefully distinguishing between the jurisdictional concept of standing (which, among other things, cannot be waived) and the more substantive aspects of whether a particular plaintiff's claim might be legally valid. In the context of shareholder suits, the Court noted that any "confusion is understandable" because the statute (and the literature about derivative claims) often speak about the substantive aspect of a plaintiff's claim using the term "standing."

Double-derivative claims: The plaintiff here was a sharehodler in a parent corporation and sued over a busines deal entered by its wholly owned subsidiary. In doing so, the plaintiff was asserting the corporation's right to, in turn, step into the shoes of its subsidiary. This type of claim has been dubbed a double-derivative suit.

The question before the Court was whether Texas should permit such a claim.

On this issue, too, the Court's analysis proceeds from Article 5.14 of the statute, this time focuding on the article's expansion of the term "shareholder" to also "include[] a beneficial owner whose shares are held in a voting trust or by a nominee on the beneficial owner's behalf." Tex. Bus. Corp. Act art. 5.14(A)(2). Placing particular emphasis on the word "includes," the Court declined to treat this list as exclusive. Instead, the Court viewed this as opening the door to more general concepts of equitable or beneficial ownership, such as a shareholder's indirect interest in property held by the corporation itself. The Court thus held that Texas law does permit a double-derivative suit.

There is one notable contrast between this statutory analysis and the Court's analysis of standing: This definition in Article 5.14(A) is not, structurally, limited to closely held corporations. The same definition of "shareholder" appears, by the text, to apply to all derivative suits.2 Nonetheless, the Court tells us in footnote 14 that it does not (yet, at least) intend its holding to reach beyond the very limited context here:

We limit our holding to the situation presented in this case in which a shareholder of a closely held parent corporation asserts double-derivative standing to assert a cause of action on behalf of a wholly owned subsidiary.

What is clear is that the Court's immediate concern is with the special problems of closely held corporations. It draws support for its understanding of the word "shareholder" in Article 5.14(A) from the Legislature's decision to exempt closely held corporations from certain procedural requirements for derivative suits. ("Our holding is once again buttressed by the fact that the Legislature made the statutory standing provisions of article 5.14(B) inapplicable to closely held corporations."). And it frames the policy concerns in terms of the impact on closely held corporations: "Were we to hold otherwise, the directors of a closely held holding corporation could create a wholly owned subsidiary to circumvent the Legislature’s intent to make it easier for shareholders to assert derivative claims on behalf of closely held corporations."


  1. http://law.justia.com/codes/texas/2005/ba/005.00.000000.00.html 

  2. For example, one might note that the definition of a closely held corporation in Article 5.14(L) is written in terms of there being fewer than "35 shareholders," so an expansion of "shareholders" to include all forms of indirect ownership might result in some uncertainty whether a corporation is closley held at all. 

Tags: Order Lists

Discovery of medical committee records related to a doctor’s claim of unfair competition (May 22, 2015)

May 26th, 2015 · Comments Off on Discovery of medical committee records related to a doctor’s claim of unfair competition (May 22, 2015)

With this orders list, the Court issued its opinion in one pending case. It did not choose any new cases for review.

Discovery of medical peer-review committee records related to a doctor's claim of unfair competition

In this suit, a surgeon who specialized in robotic heart surgery alleges that his former hospital destroyed his professional reputation and dried up his referral sources in an effort to stave off competition from a new hospital. He brought claims for defamation, business disparagement, antitrust, and tortious interference with prospective business relations.

The question before the Court was whether his former hospital could shield certain documents from discovery under the a medical committee privilege.

The Court focused its analysis on an exception in the statute:

If a judge makes a preliminary finding that a proceeding or record of a medical peer review committee or a communication made to the committee is relevant to an anticompetitive action, or to a civil rights proceeding brought under 42 U.S.C. Section 1983, the proceeding, record, or communication is not confidential to the extent it is considered relevant. — Tex. Occ. Code §160.007(b).

The hospital argued that this exception did not apply to the documents here because the committee was not just a "peer review" committee but also a "medical committee" under Section 161.031, which does not permit a similar exception ("are confidential and are not subject to court subpoena."). The Supreme Court disagreed, noting that the exception in Section 160.007(b) had been enacted later and was more specific. Because there was no dispute that the committee was also a "peer review" committee, the Court held that the exception applies.

Regarding the scope of the exception, the Court held:

  • The exception applies to not just to pure antitrust actions but also to other claims challenging what the Court calls "conduct that could substantially lessen competition in a particular market."

  • The exception asks the trial judge to make a preliminary finding, but it does not place a burden to produce evidence (such as expert reports) on the plaintiff.

  • The exception is narrowly drawn to focus on documents that are themselves "considered relevant," not merely calculated to lead to discoverable evidence.

As applied here, the Court noted that the conduct at the heart of the doctor's claim was about anticompetitive conduct. Whether or not he could ultimately meet all the statutory requirements for a formal antitrust claim, his claim for tortious interference targeted the same conduct and thus qualified for the same exception.

The Court rejected the argument that the doctor seeking disclosure needed to already have evidence of anticompetitive conduct (or expert reports to that effect). It noted that the statute does not place such a burden on the party seeking discovery and that doing so would be a trap, "condition[ing] access to documents that could substantiate a plaintiff's claim on the plaintiff's ability to substantiate his claim without the documents' aid."

When it turned to reviewing the disputed documents, the Court observed that some of them (including affidavits prepared for the lawsuit and the committee's own bylaws) were not properly covered by the privilege at all. As for the other documents, the Court identified certain other pages that were relevant to the doctor's claims.1


  1. Because this was a sealed record, we do not have many details of how the Court applied its holding to the particular documents. The Court does observe that it was not necessary that the doctor's name appear in the documents and that certain documents could be used to test the "veracity" of statements made by the hospital, testing whether its public statements deviated from its internal conclusions about the safety of a particular procedure or a doctor's outcomes. 

Tags: Order Lists

Internal investigations while a company is itself under investigation are given absolute privilege against defamation [May 15, 2015]

May 15th, 2015 · Comments Off on Internal investigations while a company is itself under investigation are given absolute privilege against defamation [May 15, 2015]

Last week, I noted that the Texas Supreme Court had decided all of its September, October, and November cases, save one. With today’s orders list, the Court issued its opinion in that last case from the November sitting.

Internal investigations while a company is itself under investigation are given absolute privilege against defamation

Shell conducted an internal investigation into some allegations of violations of the Foreign Corrupt Practices Act (FCPA), which pinned blame on the plaintiff here, among others. When sued for defamation, the company asserted that the statement was entitled to absolute privilege because it was made as part of a criminal proceeding.

The trial court agreed. The court of appeals reversed, concluding that Shell had not sufficiently proven that this privilege applied. (( The privilege was presented by traditional summary judgment, so the defendant had to establish it by conclusive evidence. ))

The Texas Supreme Court held that this record did, conclusively, establish a privilege that defeated any defamation claim. The analysis focused on the circumstances under which the report was made. As the Court summarized it, "Shell met with the DOJ, agreed to perform an internal investigation and report the results to the DOJ, and then did so."

This case's holding may be narrower than it first appears. The Court was careful to say that it was adhering to, and applying, the legal framework from Hurlbut v. Gulf Atlantic Life Insurance Co., 749 S.W.2d 762 (Tex. 1987), where it held a company official's voluntary statement to law enforcement made prior to that company being investigated was not afforded this same privilege.

The Court distinguished Hurlbut because, here, Shell actually was a target of a law-enforcement investigation at the time it made this report. The Court also emphasized that, while the company official's statement in Hurlbut had been made voluntarily, Shell making a report to the DOJ was "practically speaking, compelled." The Court noted the realities of being prosecuted under the Foreign Corrupt Practices Act (FCPA), under which the DOJ more harshly penalizes companies that do not cooperate. Because this internal-investigation report was provided to the DOJ in "serious contemplation of the possibility" of a prosecution, Shell was entitled to absolute privilege against defamation claims.

Tags: Order Lists

A dozen more cases decided; no grants [May 8, 2015]

May 8th, 2015 · Comments Off on A dozen more cases decided; no grants [May 8, 2015]

With today’s orders list, the Texas Supreme Court issued opinions in twelve cases.

Two of today’s cases drew dissents, each on a 6-3 vote. Four of the cases resulted in per curiam opinions. The list of opinions follows.

For those of you keeping score at home: With the burst of opinions over the past few weeks, the Court has made substantial progress on resolving the cases argued last fall. By this blog’s count, no cases from the September or October sittings remain undecided, and only one case remains open from the Court’s November sitting.

Read the list of cases

Tags: Order Lists

A slip-and-fall in a hospital is not a health-care claim; two new grants [May 1, 2015]

May 1st, 2015 · Comments Off on A slip-and-fall in a hospital is not a health-care claim; two new grants [May 1, 2015]

With today’s orders list, the Texas Supreme Court issued opinions in one case. The Court also chose two other cases for future oral argument.

Opinions

A slip-and-fall in a hospital does not qualify as a “health care liability” claim

A visitor to a hospital slipped and fell in the lobby. When she sued, the hospital moved to dismiss on the ground that she had failed to timely submit an expert report as would be required for a health-care liability claim.

The trial court agreed, dismissing the claim. The court of appeals affirmed, concluding that under TEXAS WEST OAKS HOSPITAL, LP AND TEXAS HOSPITAL HOLDINGS, LLC v. FREDERICK WILLIAMS, No. 10-0603 there need not be a connection between the safety standard in question and the actual provision of health care.

The Texas Supreme Court granted review and, now, reverses, holding that:

for a safety standards-based claim to be an HCLC there must be a substantive nexus between the safety standards allegedly violated and the provision of health care. And that nexus must be more than a "but for” relationship. That is, the fact that Ross, a visitor and not a patient, would not have been injured but for her falling inside the hospital is not a sufficient relationship .... The pivotal issue in a safety standards-based claim is whether the standards on which the claim is based implicate the defendant’s duties as a health care provider, including its duties to provide for patient safety.

The Court rooted this holding in doctrines of statutory construction that look ot the overall structure of the law ("the purpose of the statute, the context of the language at issue"). It noted, in particular, that the reading urged by the hospital would result in a situation where defendants had "a special procedural advantage [in all suits] in the guise of requiring plaintiffs to file expert reports." The Court declined to read the statute as conferring benefits based on the identity of the defendant, rather than the nature of the duty. ("We do not believe the Legislature intended the statute to have such arbitrary results.")

As for how to apply this construction, the Court listed seven "non-exclusive considerations":

  1. Did the alleged negligence of the defendant occur in the course of the defendant’s performing tasks with the purpose of protecting patients from harm;
  2. Did the injuries occur in a place where patients might be during the time they were receiving care, so that the obligation of the provider to protect persons who require special, medical care was implicated;
  3. At the time of the injury was the claimant in the process of seeking or receiving health care;
  4. At the time of the injury was the claimant providing or assisting in providing health care;
  5. Is the alleged negligence based on safety standards arising from professional duties owed by the health care provider;
  6. If an instrumentality was involved in the defendant’s alleged negligence, was it a type used in providing health care; or
  7. Did the alleged negligence occur in the course of the defendant’s taking action or failing to take action necessary to comply with safety-related requirements set for health care providers by governmental or accrediting agencies?

The Court acknowledged that "the line between a safety standards-based claim that is not a[ health-care liability claim] and one that is ... may not always be clear." On this record, as it turns out, all seven of those considerations favored the plaintiff.

The opinion of the Court does not offer explicit guidance about how lower courts should deal with a situation in which these considerations point in different directions. The concurring opinion (written by Justice Lehrmann and joined by Justice Devine) argues that, when such a situation arises, two of the considerations (the third and fifth) should be viewed as more important than the others because they focus most directly on the relationship between patient and doctor.

Grants

Do leave-of-absence policies bar workers compensation retaliation claims?

KINGSAIRE, INC. D/B/A KINGS AIRE, INC. v. JORGE MELENDEZ, No. 14-0006

Chosen for future argument by order issued May 1, 2015

An injured employee, absent from work, was classified by his employer as being on FMLA leave. According to the employer’s company policy, that type of family and medical leave cannot last longer than 12 weeks. When the employee did not return at the end of that period, the employer immediately fired them.

When the employee sued for retaliatory discharge under Chapter 451 of the workers’ compensation law, the employer argued that its company leave-of-absence policy was uniformly applied and, thus, legally barred a claim for retaliatory discharge. Alternatively, the employer argued that the jury hearing that retaliation claim should have been asked about this defense or given an instruction about the legal effect of its leave-of-absence policy.

The trial court sided with the employee. The court of appeals affirmed, holding that the company’s leave-of-absence policy did not create a legal presumption. The Supreme Court has granted the employer’s petition and will consider the issue.

Are loss-of-use or lost-profit damages available when a business vehicle is totaled?

J&D TOWING, LLC v. AMERICAN ALTERNATIVE INSURANCE CORPORATION, No. 14-0574

Chosen for future argument by order issued May 1, 2015

The case involves a tow truck that was rendered a total loss by a vehicle accident. The truck was the sole vehicle used by a small towing company. The towing company reached a settlement with the other driver that would compensate it for the market value of the lost truck, but that driver’s policy limits ($25,000) did not permit recovery for additional damages. The towing company then sued its own insurance carrier, arguing that its uninsured/underinsured motorist protection should also cover the company’s damages from loss-of-use of the truck.

The district court ruled in favor of the towing company, rendering a judgment of $22,500 in additional damages. The court of appeals reversed, concluding that Texas law bars any recovery for this type of consequential loss-of-use damages when a piece of property is damaged beyond repair.

The towing company filed a petition for review, arguing that there is a split in Texas law on this question. The Texas Supreme Court has now granted the petition.

Tags: Order Lists

Thirteen cases decided; no grants [Apr. 24, 2015]

April 24th, 2015 · Comments Off on Thirteen cases decided; no grants [Apr. 24, 2015]

With this week’s orders list, the Texas Supreme Court released opinions in thirteen pending cases.

For those of you keeping score at home:

  • Justice Lehrmann’s four majority opinions today puts her in the lead on this Term’s leaderboard.

  • The one separate opinion issued today — an opinion concurring in judgment authored by Justice Hecht — brings the Court’s total to eight such opinions this Term. If the pattern holds from last Term, the bulk of the divided cases will be resolved in the summer. (I would have said “the most divided cases,” but they may not be able to top UNIVERSITY OF TEXAS AT ARLINGTON v. SANDRA WILLIAMS AND STEVE WILLIAMS, No. 13-0338 , issued in March.)

  • Three of today’s cases led to affirmances.

When issue summaries are ready, they will appear on this page. You can also follow the links below to reach each opinion:

When the State condemns land containing a billboard, what compensation is due?
The most current summary describes this event:
Set to be argued on September 17, 2014

In this case, the State (supported by some local governments) challenges how billboards were valued in condemnation. The landowners contend that the installed billboards are part of the realty warranting compensation for their lost income. The State argues that they should, instead, be seen as a type of personal property that can be relocated away from the property being condemned.

Previously:
Previously:
  • Three opinions, one grant (June 16, 2014)
  • Compounding pharmacies under the health-care-liability act
    The most current summary describes this event:
    Set to be argued on January 14, 2015

    This is a claim against a compounding pharmacy based on an antioxidant supplement. The supplement was provided to a doctor's office, which then provided it to patients. The pharmacy argued that this was a health-care-liability claim and, accordingly, should be dismissed because no expert report was timely filed. The plaintiff argues that filling what the response calls a "bulk" order for these supplements is not filling a prescription and does not fit the statute.

    Tags: Order Lists