Supreme Court of Texas Blog: Legal Issues Before the Texas Supreme Court
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Opinions in four cases [Jan. 17, 2014]

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The Court issued opinion in four cases with today’s orders list. It granted review in six cases in a special orders list released Wednesday [...]

The Court issued opinion in four cases with today’s orders list. It granted review in six cases in a special orders list released Wednesday (post about the grants).

Whether the Railroad Commission can approve a utility rate that will vary over time, without additional hearings for each adjustment

The gas utility submitted, and the Railroad Commission approved, a rate schedule that included a clause allowing the utility to raise (or in theory lower) the rates over time, without the need for additional hearings each time. This clause, which they called a “cost of service adjustment” (COSA), required the utility to do similar calculations to what it might do when submitting proposed rates to a regulator, and then to show its work by making a public filing.

The challenge in the Texas Supreme Court was whether the Commission had the authority to approve such a clause. The court of appeals held that it did, and the Texas Supreme Court agreed.

Readers that are not deeply immersed in utility law might prefer to skip to the footnotes, particularly footnote 16 about agency deference. The footnote acknowledges that the Texas Supreme Court has previously talked about giving an agency’s view of a rule “serious consideration.”

Relying on these holdings, the court of appeals in this case decided to “defer” to the Commission’s construction [of its statute]. The parties and certain amici disagree whether such deference was appropriate in this case, and some urge that we use this case as an opportunity to add clarity to the so-called agency deference doctrine. Because we independently conclude that [the Commission had authority], we need not “defer to” the Commission’s construction or give it “serious consideration,” and we do not agree that this is an appropriate case to provide any clarity that may be needed.

This is hardly a warm embrace of “the so-called agency deference doctrine.” But any clarification of how agency deference squares with the form of textual analysis preferred by the Texas Supreme Court will wait for another case.

A contractor who promises to work in a “good and workmanlike manner” does not forfeit CGL coverage

The Court accepted a certified question from the Fifth Circuit about Commercial General Liability (CGL) insurance policies (previous post).

Today, it answers this question:

Does a general contractor that enters into a contract in which it agrees to perform its construction work in a good and workmanlike manner, without more specific provisions enlarging this obligation, “assume liability” for damages arising out of the contractor’s defective work so as to trigger the Contractual Liability Exclusion.

The Court answered no.

The dispute here is whether the insurance covers certain legal claims being made against the contractor, such that the insurer will pay for a defense or ultimately pay the claims. Reading the policy is a study in double negatives. The Court focuses on an exclusion which is, in turn, limited by an exception. The exclusion is for certain contract claims, including those one is “obligated to pay … by reason of the assumption of liability in a contract or agreement.” The exception carved out of that exclusion is for obligations they insured would have owed regardless of the contract or those specified in an “insured contract.”

Applying the framework from GILBERT TEXAS CONSTRUCTION, L.P. v. UNDERWRITERS AT LLOYD'S LONDON, No. 08-0246 , the Court held that a provision in which a contractor promised to do work “in a good and workmanlike manner” did not trigger the exclusion at all (and thus need not fit into an exception). That is because the language “did not add anything to the obligation [the contractor] has under general law to comply with the contract’s terms and to exercise ordinary care in doing so.” Thus, the insurer could not invoke this exclusion to deny coverage.

With this issue of Texas law resolved, the case returns to the Fifth Circuit.

Tax exemptions for community housing development organizations

No, your eyes aren’t failing you. That is indeed an “07″ docket number. This case was argued in January 2008. It was abated while still pending in August 2009, because one of the corporate entities involved filed for bankruptcy. With today’s orders, the Court both reinstates the case to its active docket and announces its judgment.

This case involves how property-tax exemptions apply to community housing development organizations (CHDOs). While this case was pending, the Court decided AHF-ARBORS AT HUNTSVILLE I, LLC AND AHF-ARBORS AT HUNTSVILLE II, LLC v. WALKER COUNTY APPRAISAL DISTRICT, No. 10-0714 , which resolved one of the issues here: It is sufficient if the CHDO holds equitable title to the property; formal legal title is not required.

The other issue was whether the application for an exemption here had been timely. On the facts of this case, that timing issue actually relates to the issue of legal versus equitable title. Because the CHDO applied for a tax exemption within 30 days of acquiring its equitable title, the Court holds that it was timely under the statute.

Permissible evidence for parental termination

The facts here, as in most parental-termination cases, are unfortunate. The mother’s age is not listed in the opinion, but her name (like the child’s) is also rendered as initials, suggesting that she, too, might be a minor.

The trial court heard evidence of the mother’s “status as a prostitute” and some previous relationships involving domestic violence. The court of appeals held, however, that the broader record did not support removal for “abuse or neglect” because it did not support an inference that the mother (whose rights were being terminated) had been the cause. It reasoned that “[e]vidence relating to past abuse or neglect of children other than the removed child is not relevant [under the statute].”

Applying its recent decision in IN THE INTEREST OF E.C.R., A CHILD, No. 12-0744 , the Texas Supreme Court disagreed and reversed. The Court quoted its language from In re E.C.R. stating that the concept of abuse under the statute is broader and “necessarily includes the risks or threats of the environment in which the child is placed.”

Comments OffTags: Order Lists

Stop the presses! No more paper copies required in SCOTX

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I’ve been asked to pass along this happy news: Effective immediately, the Texas Supreme Court does not require any paper courtesy copies for e-filed [...]

I’ve been asked to pass along this happy news: Effective immediately, the Texas Supreme Court does not require any paper courtesy copies for e-filed documents.

That’s zero, none, zilch. No paper.

The only people sorry to hear this will be a few local print shops.

→ 1 CommentTags: Practice Notes

SCOTX grants six cases today for argument in February [Jan. 15, 2014]

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As I speculated last Friday, the Court did issue a mid-week orders list with grants today for its early February argument calendar.

The surprise is that [...]

As I speculated last Friday, the Court did issue a mid-week orders list with grants today for its early February argument calendar.

The surprise is that some of today’s grants are going to be heard on February 27, 2014 at a special sitting in Hillsboro. The Court has chosen two cases for that day, which is typical for days when it travels to hear oral argument.

The Court calendar lists February 25 and 26 as potential argument dates as well, but no cases have (yet) been set for those dates. With no private conferences between now and February 11, today’s may be the last set of grants to be argued this Term.

New Grants

Six cases were chosen for argument. In the interest of getting this post out quickly, I’m borrowing Osler McCarthy’s summaries of the issues.

February 5, 2014

  • RAHUL K. NATH, M.D. v. TEXAS CHILDREN'S HOSPITAL AND BAYLOR COLLEGE OF MEDICINE, No. 12-0620 : “The principal issues in this appeal from client sanctions for alleged litigation abuse are (1) whether Dr. Nath waived his challenge to the sanctions in the Supreme Court; (2) whether the sanctions — more than $1.3 million for attorney fees for two defendants — were unbridled; and (3) whether the sanctions violate constitutional protections established in TransAmerican Natural Gas Corp. v. Powell.

  • MARCIA FULLER FRENCH, ET AL. v. OCCIDENTAL PERMIAN LTD., No. 12-1002 : “In this case contesting the royalty value of minerals recovered by carbon-dioxide-injection, the principal issues are (1) whether the gas should be valued in its ‘native’ state, before extraction, or at the wellhead commingled with CO2; (2) whether removing, compressing and transporting CO2 should be classified as production operations; and (3) whether CO2 removal at an off-site processing plant for reuse is a production or post-production operation.”

February 6, 2014

  • CITY OF HOUSTON v. SHAYN A. PROLER, No. 12-1006 : “Principal issues in this employment-discrimination suit are (1) whether a fire captain’s reassignment as unfit from “fire suppression” work to training duties — allegedly because he avoided firefighting — constituted unlawful discrimination without a medical evaluation and (2) whether the trial court properly gave injunctive relief without a damages award and the city, in response to an arbitration order, returned him to firefighting duty before he filed his lawsuit.”

  • IN RE STATE BAR OF TEXAS, No. 13-0161 : “In this mandamus action related to disciplinary proceedings against prosecutors for withholding exculpatory evidence, a principal issue is whether the trial court abused its discretion by denying the commission’s use of a partial criminal-trial transcript from an expunged case.

February 27, 2014 (Hillsboro)

  • ASHISH PATEL, ANVERALI SATANI, NAZIRA MOMIN... v. TEXAS DEPARTMENT OF LICENSING AND REGULATION, ET AL., No. 12-0657 : “The principal issues in this challenge to state regulation of ‘eyebrow threaders’ as cosmetologists are (1) whether the state has immunity from declaratory-judgment claims raising constitutional challenges to statutes; (2) whether the suit is capable of judicial disposition, on standing or ripeness grounds or by seeking redundant remedies; and (3) whether this due-course-of-law challenge under the Texas Constitution should be evaluated under a ‘real and substantial’ test and not by a rational-basis analysis.

  • GILBERT WHEELER, INC. v. ENBRIDGE PIPELINES (EAST TEXAS), L.P., No. 13-0234 : “In this case by landowners seeking property damages for violation of a pipeline right-of-way easement agreement, the principal issues are (1) whether the cost to restore the property is the proper damages measure in this contract-breach case and (2) whether the appeals court erred by holding that the landowners waived their claims by failing to submit a jury question on the nature of the property injury.”

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No opinions; argument date set in workers comp certified question [Jan. 10, 2014]

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With today’s orders list, the Court did not issue any opinions.

The Court did announce an argument date for STATE OFFICE OF RISK MANAGEMENT v. CHRISTY [...]

With today’s orders list, the Court did not issue any opinions.

The Court did announce an argument date for STATE OFFICE OF RISK MANAGEMENT v. CHRISTY CARTY, INDIVIDUALLY AND AS NEXT FRIEND FOR B.C., J.C. AND M.C...., No. 13-0639 , a certified question from the Fifth Circuit about how to allocate certain recoveries in a workers compensation case.

The Court accepted the certified question in August 2013, which as a practical matter meant that it would later be set for oral argument. Now that the case has been fully briefed, it will be heard on February 5, 2014.

Reading tea leaves

As I write this, there are four cases set to be argued in the early February sitting (compared to 9 in the just-completed January sitting). The Court does have a private conference early next week. We may see some grants from that conference made public Tuesday or Wednesday.1

  1. Today’s order setting a February 5, 2014 argument date gave 26 days notice. A grant made next Friday would give just 19 days notice, which while permissible in the Texas Supreme Court, is not the norm. []

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Judge denies temporary injunction in the SCOTX candidate-eligibility challenge

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The Statesman has a report from today’s hearing in the challenge involving Place 6 on the ballot.

An evidentiary hearing was held this morning on a [...]

The Statesman has a report from today’s hearing in the challenge involving Place 6 on the ballot.

An evidentiary hearing was held this morning on a requested temporary injunction. Sometime later in the day:

District Judge Amy Clark Meachum announced that she would not grant Pool’s request for a temporary injunction. She did not indicate the reason but said, in a letter to lawyers, that an order will be prepared and distributed in the future.

The judge’s letter does not yet appear in the Travis County online docket is short and to the point.

Source: “Judge: Supreme Court justice can remain on ballot”

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Challenge to Justice Brown’s place on the 2014 ballot

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Texas election season really begins with the first ballot-eligibility challenge.

This year, there is a challenge to whether one of the incumbent Texas Supreme Court Justices, [...]

Texas election season really begins with the first ballot-eligibility challenge.

This year, there is a challenge to whether one of the incumbent Texas Supreme Court Justices, the recently appointed Jeff Brown, is eligible in the Republican primary.

The suit is brought by Joe Pool, Jr., his opposing candidate for the Republican nomination. It seeks an injunction against Republican Party officials to remove Justice Brown from the ballot. Its allegation that Justice Brown did not obtain a sufficient number of signatures (50) in each of Texas’s fourteen appellate districts for ballot eligibility.

More specifically, it alleges that some of the petition circulators failed to properly attest to the date or circumstances under which signatures were gathered. If the affected signatures are struck, Justice Brown may have fewer than fifty valid signatures in either the Fourth Appellate District (San Antonio) or the Sixth Appellate District (Texarkana).

Quorum Report says that a preliminary hearing is scheduled for Monday in Travis County. The Travis County website shows a 9:00 setting for a hearing on a temporary injunction.1

Read more: Petition (excerpts), Joe Pool Jr. v. Steve Munisteri and the Republican Party of Texas, No. D-1-GN-13-004324 (filed Dec. 27, 2013). I omitted the backup pages containing the affidavits because they also contained voter names and IDs. Attorneys can access the full document through the Travis County website.

  1. I’m not sure the viability of “temporary” relief in a situation such as this, other than the side effect of getting before a judge quickly. []

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No grants to start the year [Jan. 3, 2014]

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With today’s orders list, the Court did not issue any opinions or select any cases for argument.

The Court has an argument sitting next week, and [...]

With today’s orders list, the Court did not issue any opinions or select any cases for argument.

The Court has an argument sitting next week, and a private conference is scheduled for the week of January 13, 2014.

Comments OffTags: Order Lists

No opinions or grants [Dec. 20, 2013]

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This week’s orders list brought no opinions or grants.

I would make a short comment on how that was the last full orders list of the [...]

This week’s orders list brought no opinions or grants.

I would make a short comment on how that was the last full orders list of the year, but the Court’s published calendar no longer includes future order-release dates.

Barring something exceptional happening next Friday, however, this will be my last summary post of the year. See you next year!

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