Supreme Court of Texas Blog: Legal Issues Before the Texas Supreme Court
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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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Enforcing contractual choice of forum in “major” transactions [Feb. 28, 2014]

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With the February 28 orders list, the Texas Supreme Court issued one opinion. It also granted rehearing in a petition that had previously been [...]

With the February 28 orders list, the Texas Supreme Court issued one opinion. It also granted rehearing in a petition that had previously been denied.

Opinion

“Major transaction” venue clauses

Texas Civil Practice and Remedies Code §15.020 gives special weight to contractual choice-of-forum clauses when the transaction size exceeds $1 million.

This dispute emerges from a failed limited partnership. One of the limited partners brought suit against other participants in the venture, but not the entity itself (which was in bankruptcy). The plaintiff below (Richey) sued Fisher and Boudreaux in Wise County for a variety of claims including defamation, common-law fraud, breach of fiduciary duty, and securities violations. The defendants sought mandamus relief, either to obtain dismissal of the claims on standing grounds or a transfer to Tarrant County, the venue selected by the contract.

Standing and Jurisdiction

The Court first held that outright dismissal of Richey’s claims was inappropriate because his allegations suggested he was “personally aggrieved” enough to proceed. Among other examples, the opinion noted allegations that Richey had contributed $1 million that the other limited partners failed to make and that he was personally defamed.

The Court also rejected the argument that Richey’s claims were jurisdictionally barred because they should have been filed against Nighthawk itself, which is in federal bankruptcy court. The opinion explained that whether the claims here “should have been brought against another party … is not a question of jurisdiction requiring dismissal, but is a question of liability.”

Transfer to Tarrant County

The Court then examined where the claims should be heard. The contract for the transaction that led to this lawsuit included a forum-selection clause, and the overall transaction size exceeded the $1 million threshold.

Richey argued that his claims were insufficiently related to the contract containing the provision, both because his tort claims did not “arise from” the sale contract and because the partnership agreement creating some of the duties contained no such clause.

In determining if Richey’s claims fell within the major-transaction statute, the Court borrowed its analysis for forum-selection clauses more generally — what it calls a “a common-sense examination of the substance of the claims.” Here, the Court concluded that the tort theories were “in substance” trying to recover for damages flowing from the contract containing the clause.

The Court also rejected the argument that the statute governing defamation venue — under which suit “can only be maintained” in the county of the plaintiff’s residence (Wise County) — trumps the major-transaction statute. The Court concluded that, although a plaintiff generally has his choice among the various “mandatory” venue statutes when they conflict, here the Legislature intended for the major-transaction statute to control over other conflicting provisions, making Tarrant County the only permisible venue.

Rehearing Grant

The Court originally denied review of this petition last August. The motion for rehearing argued that the issue about Texas covenants not to compete presented here is entangled with the issue in another pending case, EXXON MOBIL CORPORATION v. WILLIAM T. DRENNEN, III, No. 12-0621 . The Court heard oral argument in *Drennen* last November, and that case remains pending.

With these orders, the Court has granted rehearing of the petition and reinstated it to the docket, but it has not yet requested full briefing. The Court will, presumably, reevaluate the situation once it announces a judgment in Drennen.

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Quiet orders list; arguments next week in Hillsboro [Feb. 21, 2014]

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The Texas Supreme Court published a quiet orders list this week. No opinions were issued, and no cases were chosen for oral argument.

Next week, the [...]

The Texas Supreme Court published a quiet orders list this week. No opinions were issued, and no cases were chosen for oral argument.

Next week, the Court will travel to Hillsboro for a special oral argument sitting on Thursday. Two cases are on the docket:

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Three petitions granted [Feb. 14, 2014]

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With this week’s orders list, the Texas Supreme Court chose three cases for oral argument. One of them will be heard in April; the other [...]

With this week’s orders list, the Texas Supreme Court chose three cases for oral argument. One of them will be heard in April; the other two appear to be waiting for the fall calendar.

The Court also issued a slightly corrected opinion in COINMACH CORP. F/K/A SOLON AUTOMATED SERVICES, INC. v. ASPENWOOD APARTMENT CORP., No. 11-0213 while denying rehearing.

Chosen for Argument

Standards for reviewing parental termination

On April 22, 2014, the Court will hear IN THE INTEREST OF A.B. AND H.B., CHILDREN, No. 13-0749 .

This is a parental-termination case, and keeping with the Court’s recent pattern, it has been allotted a special hearing date rather than waiting in a queue with other petitions.

The petition is framed to attack the “factual sufficiency” standards employed by the court of appeals, a question rarely presented but that comes up often in courts below. With that in mind, it’s possible that an opinion here might have ramifications beyond the family law context.

How commercial property insurance applies to multiple sites listed under a single policy

In RSUI INDEMNITY COMPANY v. THE LYND COMPANY, No. 13-0080 , the petition asks the Court to decide whether the policy at issue is a “scheduled” policy or a “blanket” policy, which has ramifications for what arguments an insurer can make to limit its exposure.

The court of appeals heard the case en banc and divided 4-3, with one of the four justices in the majority writing separately to encourage the Court to grant review.

Does the State automatically freeze the effect of an adverse judgment by filing an appeal?

If you litigate against state entities, you may be curious to follow IN RE STATE BOARD FOR EDUCATOR CERTIFICATION, No. 13-0537 , which asks the Court to clarify the state’s ability to supersede judgments without posting a bond.

The agency has suspended an educator’s license. The trial court held that was improper and, after the agency filed an appeal, issued an order denying it the ability to supersede that judgment. This mandamus petition asks the Court to rule that the trial court lacked any discretion in the matter.

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I’ll be a panelist at the Ms. JD conference in Austin

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On February 21st, I’ll be on a panel about what law students and new attorneys should consider about blogging (or writing for similar platforms) as [...]

On February 21st, I’ll be on a panel about what law students and new attorneys should consider about blogging (or writing for similar platforms) as they start to build their professional identities. My co-panelists are Emily Frost of Austin, Erin Gilmer of Austin, and Valarie Hogan of very far from Austin. Lisa Salazar will be moderating.

This is part of the Ms. JD conference “Passion Forward”.

Friday’s events include two other breakout panels (one on social media, one on community involvement), and a small-group workshop to help participants turn their abstract professional-development ideas into more concrete plans.

On Saturday, Ms. JD is co-hosting a “Women’s Law Institute” with UT’s Center for Women in Law, featuring a distinguished list of speakers and participating mentors.

The registration for both days is being coordinated through this page. The Friday sessions are reasonably priced, and the Saturday program is free.

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No grants or opinions on another Texas snow day [Feb. 7, 2014]

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The Texas Supreme Court was once again closed on Friday for weather that might make the rest of the south jealous, but is a little [...]

The Texas Supreme Court was once again closed on Friday for weather that might make the rest of the south jealous, but is a little cold for Texas.

Despite being closed to new filings, the clerk’s office rolled out the regular weekly orders. It included no grants or opinions.

The week of February 10th brings another private conference of the Justices. If the pattern holds, we may see a few grants, or possibly some opinions, as Valentine’s Day treats from the Court.

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No defamation immunity for third-party allegations; SCOTX clarifies what’s allowed in home equity loans [Jan. 31, 2014]

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The headliners from today’s orders lists were the two denials of rehearing in previously argued cases. In both, the Court issued new opinions that [...]

The headliners from today’s orders lists were the two denials of rehearing in previously argued cases. In both, the Court issued new opinions that addressed concerns that amicus groups raised on rehearing.

If you advise amicus groups, this is an interesting study of the power, and limits, of having outside groups weigh in on rehearing.

A particular contrast between the two is the Court’s approach to hypothetical future scenarios. In Finance Commission, the Court entertained the questions raised on rehearing and offered clarifying thoughts about how its holding applied to future scenarios. In Neely, the Court noted a question raised by amicus media groups but, as the facts before it did not raise the precise scenario, “[w]e thus, as we must, leave open the question.”

The contrast here could reflect the procedural difference between what was (effectively) a prospective rules challenge in Finance Commission and a narrow summary-judgment appeal about one person’s concrete claim in Neely.

Opinions

Added clarity about the future of home-equity lending

THE FINANCE COMMISSION OF TEXAS, THE CREDIT UNION COMMISSION OF TEXAS, AND TEXAS BANKERS ASSOCIATION v. VALERIE NORWOOD, ELISE SHOWS, MARYANN ROBLES-VALDEZ..., No. 10-0121

This case applied the Texas Constitution’s unique and very detailed protections of home-equity lending to a set of Finance Commission rules that were challenged by lenders and borrowers, coming from different directions. I wrote a substantive overview of the opinion last summer.

Today, the Court issued a supplemental opinion that addresses questions raised by various amici and the lenders about how the Court’s guidance will apply to future loans.

The two major points were:

  • The Court clarified a substantive footnote in its original opinion distinguishing “front-end fees” from “interest paid in time.” The lenders and amici asked what happens to interest paid at the front-end rather than over time, such as “per diem interest” or “discount points.” The Court agreed that both of these categories are still “interest” under its definition and, therefore, not subject to the strict 3% cap on fees.

  • The Court reiterated that the the power of attorney often signed to facilitate closing is a part of the process that must be executed in a formal location (at the lender’s office, a title company, or an attorney’s office). Imposing that formality was the intent behind requiring that closing documents be signed in such a location, and balancing that consumer inconvenience against the gain in consumer protection was up to those who drafted the provision.

No(t yet any) defamation immunity for third-party allegations

In June, the Court’s original 5-3 decision in the Neely case led to protests that it was not doing enough to protect journalists who report on ongoing investigations. Media groups, as amicus, argued that a robust “third-party allegation rule” was needed.

A motion for rehearing was filed, along with two more amicus briefs. Today, the Court denied rehearing, but issued two new opinions — a corrected majority opinion and a new dissent from denial of rehearing by Justice Lehrmann.1

The corrected opinion has a number of textual edits, but the substantive changes center on new footnote 3. The Court first notes that it has not, yet, reached the question of whether a media defendant would be protected if it made a perfectly accurate report about a third-party investigation. But then it goes on to explain why this is not the case for such a pronouncement:

We conclude there is a fact issue as to the truth or falsity of the gist of the media defendant’ broadcast indicating the physician was disciplined for operating on patients while taking dangerous drugs or controlled substances. Importantly, this fact issue as to truth is likewise a fact issue as to accuracy. Though the media defendants advocate for accuracy as the test for truthfulness of the gist, given our holding concerning the gist, such a rule would not shield the media defendants here. We thus, as we must, leave open the question of whether a broadcast whose gist is merely that allegations were made is substantially true if the allegations were accurately repeated. See Heckman v. Williamson Cnty., 369 S.W.3d 137, 147 (Tex. 2012) (discussing prohibition on rendering advisory opinions).

Because announcing a new rule of law would not actually affect these claims, the Court stated that it “must[] leave open the question.”

One’s feeling about the modal auxiliary verb might depend on philosophy or temperament. But the Court certainly can, when it wishes, wait to decide thorny questions until a case presents those facts squarely enough.

  1. The original dissent, penned by former Chief Justice Jefferson, remains unchanged. The list does not say that Justice Brown “did not participate” in the rehearing process, although he also did not join any opinions. I suppose his not voting for rehearing would be a tenth Justice participating at least in some minor way, if not for Chief Justice Hecht being recused. So, good luck to those of you trying to count heads on this case. []

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Chief Justice Hecht becomes the longest serving member of SCOTX

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The Court posted this photo tribute to mark Chief Justice Hecht becoming the longest-serving member in its history.

The previous mark was held by Chief Justice [...]

Hecht Tribute Photo

The Court posted this photo tribute to mark Chief Justice Hecht becoming the longest-serving member in its history.

The previous mark was held by Chief Justice Greenhill, who had served for 25 years and 25 days when he retired in 1982.

According to Wolfram Alpha, Justice Hecht has had 1308 opportunities for weekly orders lists, so far.

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