The Court did not issue any opinions with today’s orders list, but it granted rehearing in a case about how the statute of frauds applies to purchases by a trust or partnership.

John Ganim v. J. Farouk (Frank) Alattar, No. 10-0592.

Two business partners discussed entering a real-estate transaction together to buy some property, and one of them signed for it as “Trustee” (of an unidentified trust). The two later had a falling out, disagreeing about whether the land was bought for them collectively or just by one of them.

In June, the Texas Supreme Court held that the statute of frauds did not bar enforcement of the parties’ oral agreement about this real estate purchase (opinion).

Rehearing was sought, and an amicus brief was submitted by former Justice Brister on behalf of the Episcopal Diocese of Fort Worth — which had its direct appeal about the ownership of church property accepted by the Court two weeks ago.

The amicus brief suggests that the diocese is concerned about how a broad reading of Ganim v. Alattar might affect its pending direct appeal:

… the opinion’s suggestion that a claimant to property can plead around the statute of frauds and the Texas Trust Code by asserting nothing but an oral agreement for joint acquisition of land. Can a third party — who has no title, no signed writing, and no money at risk — become owner of real estate simply by convincing a jury that an oral promise of joint ownership was made many years ago? If that is Texas law, then claimants from Rome, Canterbury, or anywhere else might ask a jury to award interests in Texas church properties based on nothing but oral testimony about “understandings” from long ago.

The Court’s grant of rehearing in Ganim gives it a little more time to sort through the broader implications.

The amicus strategy here is also instructive. Although many groups have some interest in how this rule applies to partnerships or trusts, this amicus brief had the secondary (or perhaps primary?) goal of highlighting the importance of the diocese’s pending direct appeal. Nicely done.

In today’s orders list, the Texas Supreme Court chose a new case for argument later this year — a (rare) direct appeal, this one raising constitutional questions about how courts can decide property disputes that arise within a church.

The case is The Episcopal Diocese of Fort Worth, et al. v. The Episcopal Church, et al, No. 11-0265. You can read the jurisdictional statement or see other briefs and filings.

The dispute arose after the Forth Worth diocese of the Episcopal Church broke away from the national entity over doctrinal differences. The question was: Who owns the property held by the Fort Worth diocese?

After The Episcopal Church (“TEC”) began departing from traditional church practices and beliefs, both clergy and lay delegates of the Episcopal Diocese of Fort Worth (“the Diocese”) voted by a 4-to-1 margin to remove references to TEC from the Diocese’s Constitution. (28CR5962 (¶7)). Whether a diocese can withdraw from TEC is not a matter for the courts. But property ownership is, and the deeds, church constitutions, and state statutes show the Diocese is entitled to keep property that it has bought, built, and maintained for decades without TEC contributing a dime.

The lower court determined that it had no power to determine this property dispute without offending the First Amendment. By noting probable jurisdiction over this direct appeal, it will take up the underlying constitutional question of when courts can resolve property disputes that involve church entities.

In re Allcat Claims Service, L.P. and John Weakly, No. 11-0589

The Texas Constitution prohibits the Legislature from imposing an income tax unless the voters of the state have approved it through a statewide referendum. Tex. Const. art. VIII, § 24(a).

Allcat argues that the current Texas franchise tax violates this prohibition because it is calculated based on the margins earned by partnerships. Normally, tax challenges must be brought in Travis County district courts. But the bill creating this new franchise tax also contained a provision purporting to vest “original and exclusive jurisdiction” over constitutional challenges in the Supreme Court of Texas. The bill put no time limit on when taxpayers could file suit — this one was brought about five years into the new system — but it gives the Texas Supreme Court only 120 days from when suit is filed to resolve a challenge.

The Texas Supreme Court issued its decision around 4:00 today, the last day by that clock. Here’s what the orders list says about the outcome:

The Court denies Allcat’s requests for relief relating to its facial challenge because the Act [creating the Texas business-margins tax] does not violate Article VIII, Section 24 of the Constitution. The Court dismisses the as-applied challenge and attorney’s fees claim for lack of jurisdiction.

The vote breakdown was either 7-2 or 9-0, depending on how you frame it. The majority upheld the tax on the merits. The dissent would have dismissed the appeal for want of jurisdiction (also leaving the tax in place). The Justices disagreed about why, but none of them would have struck down the margins tax today.

Read more about the decision, the dissent, and when the Legislature can authorize this kind of special expedited review

Although the Texas Supreme Court isn’t expected to issue its next full orders list until December 2nd, the 120-day clock is running for a decision in Allcat Claims Service, L.P. v. Susan Combs, No. 11-0589 — the constitutional challenge to the Texas business-margins tax.

The case was brought as an original proceeding in the Texas Supreme Court, and the 120-day clock was specified by the statute invoked by the taxpayers. The deadline appears to be the Monday after Thanksgiving.

With today’s orders list, the Texas Supreme Court issued one opinion, dismissed a case that had been set for argument, and granted a motion to permit an amicus to argue.

Next week is a short week, so the next full list should be released on December 2. The next round of oral arguments begins December 6.

Cities could not directly challenge gas-rate increases under the GRIP statute

Atmos Energy Corporation, Centerpoint Energy Resources Corporation, and Texas Gas Service Company v. The Cities Of Allen, et al. and Railroad Commission of Texas, No. 10-0375 (Wainwright, J.) PDF

The narrow question here is the validity of rate increases by some gas utilities under a special statute providing for interim repayments of certain costs (referred to by the shorthand “GRIP”). The utilities filed these rate increases, and these 51 cities took formal action to refuse the increases. But the applicable statute gave the Railroad Commission exclusive appellate jurisdiction. The utilities took those appeals, and the Commission set aside the city’s objections to the rate increases.

With today’s holding, the Texas Supreme Court concluded:

1. The statute’s grant of exclusive appellate jurisdiction gave the Commission power to override city determinations.

2. No evidentiary hearing (“contested case”) was required here because the GRIP statute did not contemplate that detailed factual review. Instead of that normal process, the Court explained, the GRIP statute provided different protections, including possible refunds in later rate cases. (( See page 12: “[A] municipality could file a rate case on its own motion whenever it perceives the need after a GRIP filing. Tex. Util. Code § 104.151. These protections further reinforce our view that the interim GRIP filings are subject only to a ministerial review of the statutory requirements by the Commission.” ))

The latest wrongful-imprisonment case has been settled

In re Larry Charles Fuller, No. 11-0018

The Court had agreed to hear oral argument in a new challenge to how the Comptroller handled a compensation claim for wrongful imprisonment. The parties reached a settlement and, with today’s orders list, the Court has formally dismissed the case.

Amicus argument in a (potentially) big products-liability case

Centocor, Inc. v. Patricia Hamilton and Thomas Hamilton, No. 10-0223 (to be argued Dec. 8, 2011)

Today, the Court granted leave for an amicus to appear at argument in this case about how advertising interacts with the normal tort duties for makers of prescription drugs. One question is the extent to which drug makers can still rely on a doctor (the “learned intermediary”) to provide disclaimers when the maker has directly advertised the drug to consumers.

The amicus brief was a joint filing by the Texas Medical Association, Texas Medical Liability Trust and Texas Alliance for Patient Access. The Court’s order does not say which amicus group is appearing (I’ll update this post when I know), but it does suggest that And extra time is being devoted to this case. The order shows a time division of 20/20/10 rather than the usual 40 minutes total.

I’ve written before about the Allcat Claims Service, L.P. v. Susan Combs, No. 11-0589, challenge to the Texas margins tax, which was argued to the Court last week. That case was brought under an unusual statute carving a direct route to the Texas Supreme Court for certain tax cases.

It didn’t take long for that road to attract other travelers.

There’s now a second case challenging a different aspect of the margins tax. Nestle USA, Inc., Switchplace, LLC, and NSBMA, LP v. Susan Combs, No. 11-0855. While Allcat challenged how the tax applied to partnerships (a small category of taxpayers), this challenge attacks the rate structure for a lack of uniformity (under Texas law) and for violating the federal due process and commerce clauses.

Today, the Texas Supreme Court has ordered an accelerated briefing schedule for this case, with an argument to be held January 12, 2012.

Well before then, we should have the Court’s answer to the Allcat case, which if nothing else should shed some light on this unusual procedure for getting constitutional issues to the Court.

Appellate motions for rehearing are a challenge. You need to convey that the Justices have made a critical error, without crossing an invisible line to being combative.

So, when the Texas Supreme Court grants rehearing, I make a point to read the motions to see what caught the Court’s eye.

Last week, it granted rehearing in Mabon Limited v. Afri-Carib Enterprises, Inc., No. 09-0715, about a default judgment when the defendant did not get notice of the trial court hearing. The questions were procedural and somewhat dry, about what level of diligence is needed for a party to use a “bill of review” process to bring its challenge after the time for appeal has expired.

So how did David Holman, counsel for Mabon Limited, turn this into something dramatic?

The entire twelve-page motion for rehearing is formatted as a transcript of a “fictional exchange between an Editor (‘ED’) of Corporate Counsel Quarterly and a Legal Reporter (‘LR’).” Using this literary device let counsel put this criticism into other voices (albeit fictional ones).

The two characters discuss the case, walking through some of the twists and turns in a conversational way. The motion concludes by turning what often seems like an empty warning (“the press won’t like this!”) into something cute:

ED: Well, okay. I’ll tell you, here’s what we’re going to do. Let’s wait before we run this story to see if the Texas Supreme Court grants rehearing to prevent the Fourteenth Court of Appeals’ opinion from becoming law?

LR: Good idea.

ED: I’ll keep my fingers crossed.

LR: Me too.

The Texas Supreme Court’s response? It granted rehearing to reinstate the case to its docket, which might mean this pilot gets picked up for a full season. (( The petitions were denied on February 25, 2011, so the Court was approaching its 180-day deadline for rehearing motions. This grant of rehearing gives it more time to mull over these issues. ))

Was it the screenplay, or the plot?

The dialogue format wasn’t the only unusual feature of this case. It turns out that both sides were seeking rehearing. Although they disagreed with each other, they both agreed that at least something was wrong below.

We don’t yet know who the Court will ultimately side with — or if it will eventually deny the petition again without reaching the merits. (( That’s still an option. )) So, until those ratings are in, you may not want to hire a desperate Liz Lemon or Aaron Sorkin to ghostwrite your next motion — just yet.

New Fifth Circuit blog

David Coale, former head of the State Bar appellate section, has started a new blog about the Fifth Circuit. It’s called 600 Camp, after the address of the John Minor Wisdom Courthouse in New Orleans.

Mandatory appellate mediation turns out to be mandatory

Disputing has a post about what happens when a party walks out before a court-ordered appellate mediation has run its course. The title gives away the ending: “Texas Court of Appeals Dismisses Appeal Because Appellant Walked Out of the Court-Ordered Mediation”

This happened in the Waco Court of Appeals. The court’s notice specified that dismissal would follow if the appellant did not attend the mediation. The court’s opinion is here.

Election season is underway

Morgan Smith of the Texas Tribune has the first piece I’ve seen about the 2012 court elections. Her story is about former Justice Steve Smith’s filing to, once again, run against Justice Willett for the Republican nomination.

Oral Arguments This Week

You can check out past and current arguments on the St. Mary’s video archives page.

Tuesday

• SafeShred, Inc. v. Louis Martinez, III, No. 10-0426. Are there exemplary damages for a Sabine Pilot claim (wrongful firing for an employee refusing to do an illegal act) and, if so, was the amount of exemplary damages awarded here excessive? (>> earlier post)

• Shell Oil Company, et al. v. Ralph Ross, No. 10-0429. Broadly, the case is about how the statute of limitations applies to royalty claims when there is an allegation of fraudulent concealment.

• Weeks Marine, Inc. v. Maximino Garza, No. 10-0435. A Jones Act (maritime) case about how to divide responsibility between the worker and the employer. >> earlier post

Wednesday

• Natural Gas Pipeline Company of America v. William Justiss, et al., No. 10-0451. In a nuisance claim about a reduction in property value alleged to have been caused by the gas pipeline: (1) how much worse must the condition get to re-start the statute of limitations and (2) what evidence is proper to show the reduction in property value? A potentially much broader issue here is the petitioner’s request for the Court to limit the “property owner rule” that (traditionally) lets an owner testify as to its value without the need to hire an expert witness.

• Hearts Bluff Game Ranch, Inc. v. The State Of Texas and the Texas Water Development Board, No. 10-0491. Can the State’s actions, which were alleged to have directly interfered with the issuance of a federal permit, constitute a taking under state law? >> earlier Texas Tribune article

• Matthew W. Wasserman, M.D. v. Christina Bergeron Gugel, No. 10-0513. Do “health care liability claims” include allegations of assault or sexual assault by health-care providers? >> earlier post

Thursday

• Port Elevator-Brownsville, LLC V. Rogelio Casados, et al., No. 10-0523. Does the bar against lawsuits created by the workers compensation law apply equally to suits by temporary workers?

• In re United Scaffolding, Inc., No. 10-0526. How much specificity is needed in an order granting a new trial based on the great weight of the evidence?

• Rusk State Hospital v. Dennis Black, et al., No. 10-0548. What should courts do when a government agency raises sovereign immunity during a limited interlocutory appeal challenging something completely different?