Supreme Court of Texas Blog: Legal Issues Before the Texas Supreme Court

Category: 'Case Notes'

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

March 30th, 2014 · Comments Off on Texas Supreme Court halts disclosure of identity of pharmacies supplying execution drugs

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

Tags: Case Notes · News and Links

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

March 25th, 2014 · Comments Off on Can the Legislature prevent a court from striking down a statute on constitutional grounds until 45 days after the AG has been notified?

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.

Tags: Case Notes · News and Links

SCOTX takes the Deepwater Horizon case [Sep. 6, 2013]

September 6th, 2013 · Comments Off on SCOTX takes the Deepwater Horizon case [Sep. 6, 2013]

With today’s orders, the Texas Supreme Court formally accepted review of In re Deepwater Horizon, No. 13-0670 , the case that it received from the Fifth Circuit last week. The issues covered by the certified questions will now be briefed, and the Court will most likely set the case for argument in January or February.

The Court did not grant any other petitions for review. Among the denials, there was only one case that had reached the merits-briefing stage: Texas Tech University Health Sciences Center v. Margarita Hernandez Villagran, et al., No. 12-0531 . Because petitions that reach full briefing are usually handed down after conference weeks (which this week was not), I decided to look a little more closely.

The Texas Tech petition raised immunity issues under §101.106 and had been fully briefed for about six months. It was apparently waiting on the outcome of Texas Adjutant General's Office v. Michele Ngakoue, No. 11-0686 . That decision was handed down last week, and marked a 5-4 rejection of the state’s strict view of §101.106 — which was also at the heart of the petition denied today.

Next week: The first oral arguments of the new term will be held Monday, Tuesday, and Wednesday. The Court’s calendar shows both Thursday and Friday blocked out for the State Bar appellate CLE in Austin, at which several Justices and members of the Court staff will be speaking.

I’m working on a kind of “StatPack” about the Court’s term. I hope to finish that next week. If you’d like numbers sooner, you can peek at the updated authorship tables and voting charts. These tables are integrated with my case database, so you can drill down to see exactly which opinions are being counted.

Tags: Case Notes · Order Lists

The fight over the BP/Deepwater Horizon oil spill reaches the Texas Supreme Court

August 29th, 2013 · Comments Off on The fight over the BP/Deepwater Horizon oil spill reaches the Texas Supreme Court

The Fifth Circuit has asked the Texas Supreme Court to weigh in on the litigation surrounding the April 2010 explosion and oil spill at the Deepwater Horizon offshore oil rig. The Texas Supreme Court has docketed the case as In re Deepwater Horizon, No. 13-0670 .

The issue is whether the insurance policies that were purchased by Transocean also cover BP for its losses as an “additional insured.”

The two sides disagreed about how to read a previous Texas Supreme Court decision on the subject, Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660 (Tex. 2008).

With that disagreement about a controlling question of state law, the Fifth Circuit chose to certify the question to the Texas Supreme Court and await an answer. (This is the third such certified question that the Texas Supreme Court has received in the past two weeks.)

In its certification order, the Fifth Circuit has asked the Texas Supreme Court to provide the definitive answer under Texas law about two legal questions, before returning the case to the Fifth Circuit for final disposition.

The first question asks about how to apply ATOFINA to these facts:

  1. Whether Evanston Ins. Co. v. ATOFINA Petrochems., Inc., 256 S.W.3d 660 (Tex. 2008), compels a finding that BP is covered for the damages at issue, because the language of the umbrella policies alone determines the extent of BP’s coverage as an additional insured if, and so long as, the additional insured and indemnity provisions of the Drilling Contract are “separate and independent”?

The second question asks whether the general principle that ambiguous contract language is construed against the person who drafted it (contra proferentum) applies in this context:

  1. Whether the doctrine of contra proferentem applies to the interpretation of the insurance coverage provision of the Drilling Contract under the ATOFINA case, 256 S.W.3d at 668, given the facts of this case?

The Texas Supreme Court will most likely accept these certified questions and set a briefing schedule for the parties, with an oral argument to follow late this fall or early next year.

Tags: Case Notes

The Texas Supreme Court accepts two “gay divorce” cases for argument this fall

August 23rd, 2013 · Comments Off on The Texas Supreme Court accepts two “gay divorce” cases for argument this fall

Today, the Texas Supreme Court formally accepted two cases about same-sex divorce for argument this November. (( The Court also granted a third petition, filed by the Attorney General, preserving its argument that it should have been allowed to intervene in one of these cases in the trial court. ))

In both cases, a gay couple married in another state tried to get a divorce in Texas. In both cases, the state Attorney General intervened in the case, arguing that Texas law did not permit a court to grant a divorce — not because the state wants to preserve gay marriages, but because the state does not recognize their validity to begin with.

One of the cases, In the Matter of the Marriage of J.B. and H.B., No. 11-0024 , went through the Dallas Court of Appeals, which agreed with the Attorney General’s position.

A case originating in Austin proceeded differently. In that case, State of Texas v. Angelique Naylor and Sabina Daly, No. 11-0114 , the Attorney General’s attempt to intervene was made after the divorce decree was issued, and the Austin Court of Appeals held that attempt was untimely. The Austin Court upheld the divorce.

The petitions were filed in the Texas Supreme Court in 2011, but they were effectively “on hold” while the U.S. Supreme Court considered its own set of gay-marriage cases last term.

The U.S. Supreme Court handed down its decisions in June. In one of those cases, U.S. v. Windsor, the Court held that the part of the federal Defense of Marriage Act that prohibited same-sex couples from receiving federal benefits was unconstitutional.

Now that the U.S. Supreme Court has spoken, the Texas Supreme Court has a better sense of how federal law may bear on the question whether Texas courts can or must recognize a same-sex marriage to grant a divorce.

One of the lurking issues may involve the part of the Defense of Marriage Act that was not struck down by U.S. v. Windsor — the part that modifies the Full Faith and Credit Clause of the U.S. Constitution to permit states to take the unusual step of refusing to recognize marriages issued in sister states. In striking down the federal-benefits part of DOMA, Windsor reasoned from equal-protection principles and the historic role of states in deciding what constitutes marriage to conclude that federal law could not refuse to recognize a marriage recognized by state law. How those principles apply when one state refuses to recognize a marriage issued by another state remains an open question.

The Texas Supreme Court has consolidated both cases for oral argument on November 5, 2013. The oral argument will be webcast live, as is the Texas Supreme Court’s normal practice.

Tags: Case Notes

Question about which rules apply to modifications to a home mortgage has been certified to the Texas Supreme Court

August 21st, 2013 · Comments Off on Question about which rules apply to modifications to a home mortgage has been certified to the Texas Supreme Court

The Fifth Circuit has certified a question about home-mortgage lending to the Texas Supreme Court.

The overarching question is whether a lender getting a borrower to agree to recapitalize unpaid insurance premiums and unpaid taxes is a refinance or a modification (and if it is merely a modification, which of the restrictions on these type of loans in the Texas Constitution apply).

The modification here was done through a less formal process than the Texas Constitution requires for a typical refinancing. The Fifth Circuit opinion says that, for that reason, if this is a refinance, “the inquiry ends: there is no dispute that the Agreements did not independently comply with” at least one of Texas’s requirements.

If the Texas Supreme Court does not consider this type of transaction to be a modification, however, the Fifth Circuit would like it to address several other questions about which rules apply to a modification:

  • whether this agreement is an “advance of additional funds” under the original mortgage in violation of Texas law;

  • in light of that answer, whether past-due property taxes and insurance can be recapitalized consistent with Texas law;

  • which of the regulations about home loans might apply to a modification, including whether the loan-to-value ratio must be at 80% at the time of the modification, or whether that only applies at the original closing; and

  • whether this type of modification to capitalize past-due payments would have to comply with the stringent rules for open-ended HELOC (home-equity line of credit) agreements.

The Fifth Circuit’s opinion can be read here. Its very brief certification order is here. And the case has now been docketed as Frankie Sims, on behalf of Himself and All Others Similarly Situated; and Patsy Sims, on behalf of Herself and All Others Similarly Situated v. Carrington Mortgage Services, L.L.C., No. 13-0638 .

Hat tip: David Coale of 600camp, who also blogged about this earlier today.

Tags: Case Notes

Texas Supreme Court further tightens some of Texas’s home-equity lending rules

June 21st, 2013 · Comments Off on Texas Supreme Court further tightens some of Texas’s home-equity lending rules

Texas has a long tradition of protecting the homestead against creditors, including special protections in the state constitution. It was only ten years ago that Texas put in place a legal structure permitting home-equity loans — and to do so took an amendment to the Constitution.

The political compromise that resulted was a set of constitutional amendments sent to the voters, and approved, in 2003. The amendments were extraordinarily detailed — with the rigidity of statutes or rules rather than the flexibility of most constitutional provisions.

Texas’s banking regulators issued even more specific rules for lenders, embodying their own interpretations of that constitutional language. In this appeal, the Court is asked to review whether some of those rules went too far. (Disclosure: I consulted at an earlier stage of this appeal when I was at the Texas Office of the Solicitor General.)

The opinion

The Court split 8-1 in this case, with one Justice (Justice Johnson) concluding that these plaintiffs did not have a concrete injury to bring a court challenge.

The majority, through Justice Hecht, held that the courts had a role in second-guessing the regulators’ view of the Texas Constitution by reviewing these rules. It also held that, because this was a constitutional question, no deference was due to the regulators’ view of this subject area (as might be proper in a more typical administrative context).

As for the substance, the Court announced that two of the rules were unconstitutional — changing the law that will apply to Texas borrowers going forward: (( The Court also upheld one other commission rule, that for purposes of “12 day” notice requirement, the lender can presume that the borrower received the notice three days after mailing unless contrary evidence is offered. The Court concluded that this was reasonable because it was consistent with the constitutional provision. ))

  • The Court held that the Texas Constitution required a very strict 3% cap on fees other than “interest.” While the commissions had provided a looser rule that allowed other items to be included as “interest” (and thus carved out from the 3% cap), the Court concluded that the only amounts excluded from the 3% cap were true interest (the amount of principal times an interest rate).

    Thus, under the Court’s reading of the Constitution, some fees charged by lenders or their affiliates will not be permitted going forward.

  • The Court also held that the rules permitting a borrower to simply mail in a power-of-attorney form were invalid. The Constitution requires the closing to take place at one of a few designated locations, not the borrower’s home. In the Court’s view, this requirement would be circumvented by allowing the borrower to simply mail in a form.

    That’s because “it is precisely the common use of the mail and powers of attorney in closing transactions that gives rise to the danger of coercion Section 50(a)(6)(N) was intended to prevent.”

The Court’s opinion does not specify an effective date, but the usual rule is that legal holdings take immediate effect. This means that some lenders (in particular those charging higher fees than 3% or whose closing process happens through the mail) may be pausing their Texas loans until they can bring their procedures in line with Texas’s constitutional requirements.

Tags: Case Notes

Four grants: scope of protective orders for trade secrets; expert reports when suing architects; and more [Apr. 19, 2013]

April 22nd, 2013 · Comments Off on Four grants: scope of protective orders for trade secrets; expert reports when suing architects; and more [Apr. 19, 2013]

This week, the Texas Supreme Court chose four more petitions for its fall argument calendar. (orders list).

Shared discovery orders and litigation involving trade secrets


Chosen for future argument by order issued April 19, 2013

The dispute is over the scope of a protective order for the defendant’s trade secrets. The wrinkle is that the order permits limited sharing with other qualifying litigants beyond this case — so similar plaintiffs in another state might obtain this information and might, in turn, share discovery information that they have gathered. The defendant argues that this is an abuse of discretion and constitutes a taking. The plaintiff side argues that these shared discovery orders are commonly permitted in other jurisdictions and promote judicial efficiency while adequately protecting the producing party.

Expert certifications to sue architects, engineers, and surveyors


Set to be argued on September 10, 2013

Chapter 150 of the Civil Practice and Remedies Code requires those suing architects, engineers, or surveyors to include a certification about the claim from a qualified expert with the original filing or risk dismissal. Here, the two sides reached a Rule 11 agreement about expert deadlines that might extend this time. Before that (new) deadline was reached but after the underlying statute of limitations on the claim had expired, the defendant moved to dismiss under section 150.002. The trial court denied the motion. The court of appeals reversed, concluding that the case did not qualify for a “good cause” extension under the statute. Justice Keyes dissented, arguing that the defendant had waived this right through the Rule 11 agreement.

The petition argues, among other things, that the court of appeals lacked interlocutory appellate jurisdiction over a trial court decision to extend time (rather than to dismiss) and that the Rule 11 agreement should be enforced.

ERISA preemption of severance agreements

The case asks if a group of employees of a company that sold a business unit to another company had, on these facts, a contract claim against their former employer over severance benefits. At the court of appeals level, the three-judge panel split three ways:

  • an opinion conveying the judgment, which concluded that the claims were not preempted by ERISA but that these facts did not demonstrate any contract breach;

  • a concurring opinion in the judgment only, which concluded that this claim was preempted by ERISA; and

  • a dissenting opinion, which concluded the claim was not preempted and that these facts were consistent with a contract claim.

Suits by insurers to recover funds paid out by mistake of fact (with some appellate twists)

This appeal involves a complex tangle of insurance obligations for an oilfield blowout in 1997. The petition is brought by the insurer, seeking to recover some funds previously paid out to certain parties involved in the operation. The petition claims that the payments were made “under a mistake of fact” and seeks restitution from those who ultimately received the funds. The respondents argue that this is an extra-contractual claim that is barred by Excess Underwriters at Lloyd’s v. Frank’s Casing Crew & Rental Tools, 246 S.W.3d 42 (Tex. 2008).

One argument made involves “law of the case.” This case has percolated up and down the appellate chain, with two previous decisions of the court of appeals (Gotham I and Gotham II) resulting in petition denials. The petition argues that the appellate decision below (called Gotham III in the briefing) violated the law-of-the-case doctrine by reversing field on a legal point because of the intervening Frank’s Casing decision.

That points toward an even more arcane lurking issue — how does “law of the case” work in a case that has been transferred by docket equalization? Under Texas Rule of Appellate Procedure 41.3, “the court of appeals to which the case is transferred must decide the case in accordance with the precedent of the transferor court under principles of stare decisis…” The Gotham III version of this appeal was sent from the San Antonio Court to the El Paso Court. It was that transferee court that set aside the San Antonio Court’s holding in Gotham I. If Frank’s Casing represented such a sharp break with the prior law that even the San Antonio Court would have been required to change its result, then the decision seems consistent with both Rule 41.3 and “law of the case.” But if Frank’s Casing did not change the principle upon which Gotham I rested, does Rule 41.3 prevent a transferee court from revisiting the issue?

This last question might be turn out to be academic. The Texas Supreme Court itself is not bound by the law-of-the-case doctrine in regard to the substance of this appeal, because its prior petition denial does not have the effect of blessing the result of Gotham I on the merits. But how the Court’s opinion juggles these doctrines may give some guidance to litigants and judges who dealing with the kind of blockbuster cases that tend to spin off a whole series of appellate sequels.

Tags: Case Notes