Today’s Texas Supreme Court order list had something for everybody. The Court:
decided a class certification issue, resolved a question about landowners’ duties to recreational users of their property, and applied a recent holding about the reasonableness of attorneys fees;
its first “improvident grant” since 2003a rare “improvident grant”;
granted rehearing in the controversial Exxon well-plugging cases;
issued a revised opinion in a case about whether business owners can be compensated for lost profits when the government takes their land;
set four new petitions for argument early next year;
had two Justices file a dissent from the Court’s denial of review of a petition about the immunity police officers maintain while moonlighting; and
asked for the views of the Texas Solicitor General on a case about whether cities are shielded from subsequent legal challenges to a city building commission’s determination that a building is a nuisance.
CVSG: Can a city be sued for inverse condemnation of a building that its building commission determined was a public nuisance?
In City of Dallas v. Heather Stewart, No. 09-0257 (more info), the Texas Supreme Court has asked for the view of the Texas Solicitor General. This marks the fifth case in which the Court has made such a request. (( I blogged about the first such request here. ))
This petition asks whether a city can be sued for an unconstitutional taking after its building commission determines that a particular building constitutes a public nuisance.
In a class certification appeal, the Court speaks to the UCC’s good-faith requirement
The class-action in this case asserted a contract claim about an Exxon rebate program to its dealers:
For several years, Exxon Mobil Corp. offered service station dealers individual rebates based upon a dealer’s sales volume and hours of operation. Three Texas dealers, Dan Gill, Howard Granby, and Patrick Morrow (“the Dealers”), sued Exxon in the county court at law of Nueces County on behalf of all Exxon dealers in the nation, complaining that unbeknownst to them, Exxon added the cost of the rebate programs back into the wholesale price Exxon charged them for gasoline.
The wrinkle is that the “wholesale price” was not fixed to any set benchmark but instead “each dealer’s sales agreement with Exxon contained essentially the same open-price provision, obligating the dealer to pay Exxon its ‘established’ price or price ‘in effect’ at the time of the loading of the delivery vehicle (referred to as the DTW or DTT price, short for dealer tank wagon or dealer tank truck).” Such a provisioned is governed by §2.305 of the Uniform Commercial Code, which imposes an obligation on the seller to set that price in good faith.
The trial court certified the class and the court of appeals affirmed.
The Texas Supreme Court held that the class plaintiffs’ claim was meritless because the allegations that Exxon folded the rebate amount into the wholesale price would not violate the statutory duty of good faith:
…there is no claim that the open prices charged were commercially unreasonable in amount or discriminatory. The Dealers here point to nothing in the contracts that prohibited Exxon from taking rebate costs into account in setting prices.
The Court thus reversed and remanded this class certification to the trial court.
Rehearing granted in the controversial Exxon well-plugging cases
Exxon Corp. and Exxon Texas, Inc., No. 05-0729 (more info)
Exxon Corp. and Exxon Texas, Inc. v. Emerald Oil & Gas Co., L.C. and Laurie T. Miesch, et al., No. 06-1076 (more info)
I wrote about these cases back in 2007, and they have continued to get press attention. (Articles are collected at the “more info” links after each case.)
The order list shows that the Court has granted rehearing in these two causes, which were decided on the merits in March.
Today’s order list does not specify that the Court’s prior opinions have been withdrawn (( The withdrawal of the prior opinions is not automatic. In the Reata case a few years ago, in which I was counsel for the State, the Court left in place its own opinion even after granting rehearing. The opinion was not withdrawn until it was replaced with a new one. )), and it also does not set these cases for a new oral argument. So almost nothing has changed.
But by granting the motion for rehearing, the Court has given itself more time to think about the issues. (( Under the state constitution, the Texas Supreme Court has only 180 days to decide motions for rehearing, as I blogged about in a different context. ))
Improvident grant: Aggie bonfire case
Zachry Construction Corp., et al. v. Texas A&M University, No. 07-1050 (more info) (opinion on improvident grant) (per curiam)
This is a real rarity: The Texas Supreme Court
‘s first has only issued a handful of these “improvident grants” since 2003. (( Update: Thanks to a helpful reader for pointing out a few of these that I missed. The Court had an improvident grant in 2008 (here) and two of them in 2007 (here and here). My original post cited only this improvident grant from 2003. ))
The Texas Supreme Court disposes of most petitions without ever formally granting review. Those are the routine petition “denials” that appear on almost every order list. Those petition denials bind the parties to the case, but they do not set broader precedent.
In about ten percent of its cases, the Court does formally grant review, and sets the case for oral argument or summarily issues a merits opinion. Those are the cases that set binding precedent for future litigants.
The Court granted this petition in May and heard oral arguments in September. Today, the Court issued an opinion explaining that — while the case has been pending — the university settled with some of the plaintiffs, fundamentally changing the key question in the petition:
Zachry and Scott-Macon filed petitions for review in this Court. Shortly after briefing on the merits was completed, the University entered into a master settlement agreement with the plaintiffs. We granted the petitions for review, but before oral argument TAMU filed a motion to dismiss the case as moot. According to TAMU, because the University is now a “settling person,” the issue of whether it will be placed on the jury verdict form is now moot.
TAMU’s status as a “settling person” is not in dispute. Pursuant to section 33.003(3) of the Texas Civil Practice and Remedies Code, the jury is required to make a determination of proportionate responsibility as to “each settling person.” Therefore, in light of the University’s status as a “settling person,” and without reference to the merits of the court of appeals’ decision, we withdraw our order granting the petitions for review as improvidently granted and deny the petitions for review.
(Justice Willett not sitting)
Dissent from denial of review:
Shane Watson v. Shirley Newman and Jill Watkins, No. 09-0166 (more info)
This petition raised questions about what official immunity (if any) extends to police officers who are moonlighting as security guards.
With today’s orders, the Court denied the petition for review. Justice Willett, joined by Justice Hecht, delivered this opinion dissenting from the Court’s decision to deny review.
Revised opinion: Takings claims about billboard regulation
State of Texas v. Central Expressway Sign Associates, et al., No. 08-0061 (more info)
As it did in June, the Court concluded that the trial court had made an error when it struck the State’s expert witness on the question of damages. The State’s witness did not include an estimate of future income from the advertising sold on the billboard.
The Texas Supreme Court explained that the Texas condemnation law does not generally compensate for future business income because that is not inextricably tied to the land. The Court explained that, although location is important in the billboard business, it is still a business subject to the same uncertainties as other businesses.
(Justice Guzman not sitting)
Landowners do not owe a duty to protect recreational users from naturally occurring property conditions
City of Waco v. Debra Kirwan, Individually and as Representative of the Estate of Brad McGehee, Deceased, No. 08-0121 (more info)
This is the Court’s decision about the duties landowners owe to recreational users of their land. Because it is the case today with the broadest significance, I am setting it aside for its own blog post. In the meantime, you can read the Court’s opinion here.
Another case about the reasonableness of attorneys fees
Midland Western Building, L.l.C. v. First Service Air Conditioning Contractors, Inc.. No. 08-0504 (more info)
We recently decided Smith v. Patrick W.Y. Tam Trust … in which we held that an appellate court’s award of the full amount of fees requested, despite the jury’s rejection of a substantial portion of the damages sought, was improper because the fee, even if supported by uncontradicted testimony, was “unreasonable in light of the amount involved and the results obtained, and in the absence of evidence that such fees were warranted due to circumstances unique to this case.” Thus, “the evidence did no more than raise a fact issue to be decided by the jury.”
Such is the case here.
(Citations omitted.) The Court thus reversed and remanded to the trial court.
In re Golden Peanut Co., No. 09-0122 (more info) (per curiam)
This appears to be a fairly routine application of the Court’s prior holdings about when nonsignatories can be bound to arbitrate a wrongful death claim. From the per curiam opinion:
The decedent in this wrongful death suit was a party to an employee benefit plan that contained an agreement to arbitrate any personal injury or wrongful death claims against his employer, a nonsubscriber to workers’ compensation insurance. The trial court denied the employer’s motion to compel arbitration of the family members’ claims, and the court of appeals denied mandamus relief, concluding that the wrongful death beneficiaries did not sign the arbitration agreement and were not bound by it. 269 S.W.3d 302. Given our subsequent holding in In re Labatt Food Service, L.P., 279 S.W.3d 640 (Tex. 2009), however, the wrongful death beneficiaries, as derivative claimants, are bound by the decedent’s agreement to arbitrate. Moreover, Texas Labor Code section 406.033(e), which prohibits pre-injury waivers of personal injury or death claims, does not invalidate the decedent’s arbitration agreement. Accordingly, we conditionally grant the petition for writ of mandamus.
Four new petititons set for argument
The Texas Supreme Court granted three petitions for review and also set one pending mandamus petitions for oral argument:
In the Estate of Miguel angel Luis Gonzalez y Vallejo v. Miguel Angel Gonzalez Guilbot, Carlos A. Gonzalez Guilbot, and Maria Rosa del Arena de Gonzalez, No. 08-0961 (more info). Set for argument January 21, 2010. Justice Guzman is not sitting on this case.
City of Dallas v. Heather Stewart, No. 09-0257 (more info). Set for argument February 16, 2010. The Court has also asked for the Solicitor General’s views.
Jefferson State Bank v. Christa C. Lenk, Administratrix of the Estate of Mickey Carl Marcus, No. 09-0269 (more info) Set for argument February 16, 2010.
In re Allied Chemical Corp., et al., No. 09-0264 (more info) This mandamus action has been set for argument February 16, 2010.