I wrote earlier about the Third Court’s divisive case involving former associates of Tom DeLay. See “Dissension in the Third Court”. Although the three Justice panel reached a unanimous conclusion in that case, two of the other Justices on the six-member appellate court thought that the Court should have heard the case en banc.

Now, the prosecutors have filed a motion for rehearing. As described in the Austin American-Statesman this morning, the motion seems to accuse the panel of partisanship (or worse):

“The dark shadow of corruption of our system of justice looms over this case,” Earle wrote. “Every lawyer has a duty to raise questions of corruption that go to the heart of our judicial system, and it is in the discharge of that duty that the State pursues this effort.”

The Travis County District Attorney, Ronnie Earle, did not run for reelection and is retiring in January. (( The article notes another time when Earle was even more colorful:

It’s not the first time Earle has used colorful language in prosecuting defendants accused of misusing corporate money in state campaigns. He once compared the Texas Association of Business, the state’s largest organization lobbying for business interests, to fascist leader Benito Mussolini of Italy and robber barons.
))

It’s a little hard to glean details about the allegations from the article, but they appear to relate to one Justice’s prior representation of Texans for Lawsuit Reform, a group that was alleged to be involved in fundraising related to the indictment (but that was never itself indicted).

Justice Don Willett wrote an op-ed piece on Wednesday that was published by the Austin American-Statesman online. The occasion was Constitution Day, and Justice Willett wrote about the recent Heller decision about the Second Amendment and — of potentially much broader significance to practitioners — his role advising ConSource.

ConSource is an online resource that bills itself as “the free online resource of the Founders’ constitutional documents” From the few minutes that I have spent poking around on the site, it’s pretty impressive. I’ve spent enough weekends poring through the Federalist Papers and convention notes in book form to see that this could be very helpful. If you want to pitch an original intent argument, this could be a very valuable resource for you.

If you’re doing similar research on the Texas Constitution, you may want to check out the Debates in the Texas Constitutional Convention of 1875, which covers the framing of the current Texas Constitution (ratified in 1876). It’s not as lovingly annotated as its federal equivalents, but it does shed at least a little light on some of the more mysterious parts of our constitution.

In an unusual order, the Texas Supreme Court has transferred the Kim Brimer–Wendy Davis election dispute from the Fort Worth Court to the Dallas Court.

The unusual part is that the Justices of the Fort Worth Court made the request on their own. No reason was publicly specified for the move.
See more details

This blog doesn’t usually discuss criminal cases, few of which fall within the Texas Supreme Court’s jurisdiction. But a recent case out of the Third Court raises some broader issues about appellate practice.

That case is Ex parte Colyandro, in which some of former House Speaker Tom DeLay’s associates have been charged with money laundering. On a pre-trial habeas corpus petition, the defendants challenged the constitutionality of Texas’s money laundering statute.

Background

Last month, a three-Justice panel of the Third Court issued what looks like a mixed ruling — holding that the statute was constitutional but, along the way, construing it so narrowly as to exclude money laundering involving checks. (( The relevant discussion is at pages 30-46 of the PDF. )) According to the Third Court, the statute’s reach covers cash, but not other ways that one might wish to move funds around. If the money being laundered couldn’t be stored in a household freezer, then it probably wasn’t illegal in Texas before 2005.

Dissent About the Reasons for En Banc Review

On Friday, the Third Court formally denied a request for rehearing en banc that a member of the Court who did not sit on the panel, Justice Henson, had made before the panel issued its opinion. When the Court was polled, the vote was 4-2 against rehearing. The Court’s per curiam denying rehearing en banc is here. Justice Henson has already issued her dissent to the denial of rehearing en banc. The per curiam suggests that Justice Patterson’s dissent will come soon.

The per curiam says that the Court concluded that “the prerequisites for en banc review are not met” and cited Texas Rule of Appellate Procedure 41.2, the relevant portion of which provides:

En banc consideration disfavored. En banc consideration of a case is not favored and should not be ordered unless necessary to secure or maintain uniformity of the court’s decisions or unless extraordinary circumstances require en banc consideration. …

Justice Henson’s dissent takes issue with the panel decision’s statutory construction. In addition, she argues that the length of time the case was pending (it was argued in August 2006) was itself a reason why en banc review should have been granted. (( ” The delay between oral argument and the issuance of the panel’s opinion suggests that this case presents legal questions of such
magnitude and complexity that en banc review must surely be warranted.” )) While it’s not apparent to an outsider how granting an extra level of review would have sped the process up, this part of Justice Henson’s dissent does say something interesting about the Third Court’s internal process for handling opinions. In the past, there have been very few en bancs from the Third Court because the other Justices have the opportunity to contribute their thoughts before the opinion was published. For whatever reason, the Court’s internal process did not satisfy all the Justices here.

Does the Judgment or Opinion Matter More?

Despite her disagreements with the panel decision, Justice Henson notes that she would have reached the very same judgment as did the panel (affirming the trial court and allowing the case to proceed) but “without issuing an advisory opinion”:

While I strongly disagree with the panel’s reading of section 34.01(2), their discussion of whether checks are considered “funds” under the statute remains pure dicta, as Ellis and Colyandro have failed to establish that the statute is unconstitutionally vague on its face. I would have affirmed the trial court’s order denying habeas corpus relief without issuing an advisory opinion that not only reaches the merits of an issue that is not properly before this Court, but ignores the plain meaning of the statute in doing so.

In that way, this case is much like the tax case I mentioned last week. In both cases, the Third Court decided a novel question of law — and wrapped that into a judgment that one side cannot appeal and the other has no incentive to. (( Here, the party “winning” the judgment, the State, might not be able to file an appeal at all. (I’m not familiar with the Texas Court of Criminal Appeals’s law on whether a nominally “winning” party can file an appeal asking for the same judgment.) And the “losing” party in this appeal has gotten a rule of law that (one suspects) would be very favorable to them in any future trial. ))

In both cases, the nominal “winner” of the judgment feels that they lost the rule of law announced in the opinion, and vice versa. The effect is an intermediate court of appeals decision announcing a new rule of law for the appellate district that is, in practical terms, unreviewable by a higher court.

If there’s a lesson here for the appellate advocate, it’s to choose your arguments carefully. (( This is not to say that the advocates in this case failed to do so. I don’t know if the State ever embraced the argument in this case that the panel decision did — that the statute was susceptible to a narrower construction. )) Even in routine civil cases, there are sometimes ways you can “win” your appeal that will ultimately lose your case on remand. Sometimes those subtle interactions are hard to see before the give-and-take of a live moot argument — and if you skip your moots, perhaps not until you’re inadvertently conceding the point to the court and it’s simply too late.

Other coverage: Justice criticizes colleagues’ handling of DeLay opinion (Austin American-Statesman)

There was a recent case out of El Paso that raises an interesting question about attorneys fees.

The substantive dispute here is whether the City of El Paso properly gave a water utility (PSB) additional authority over a stormwater utility. The plaintiff sought a declaration under the Texas UDJA. The City argued that it, not the plaintiff, deserved to get attorneys fees for having to go through the bother of defending the action.

After the judge quickly tossed their claim, the plaintiffs voiced the idea that their case raised a legal question that could make it all the way to the Texas Supreme Court.

“I expected this decision; it is no surprise,” Gilbert said. “Now we take it to the court that deals with the law.”

He said the decision will be appealed to El Paso’s Eighth Court of Appeals and will probably reach the Texas Supreme Court.

The district judge had other ideas, however. In a later ruling about attorneys fees, the judge ordered:

• No fees shifted for the trial proceedings (rejecting PSB’s demand for trial fees of $44,000);
• The plaintiffs would have to pay $25,000 if they appealed to the El Paso Court and lost; and
• The plaintiffs would have to pay an additional $15,000 if they appealed to the Texas Supreme Court and lost.

Setting aside the somewhat arbitrary amounts chosen here for the Texas Supreme Court portion of this appeal, (( The amount of fees that you can absorb in the Texas Supreme Court varies widely depending on which of the three stages of the case it reaches — a case that is decided at the petition stage can be this inexpensive, but a case that is fully briefed and argued cannot. If the trial bar sought (and trial courts issued) more precise and refined orders about appellate fees, that could greatly assist those clients whose cases do reach the Texas Supreme Court. )) the interesting thing is how this fee structure offers the plaintiff an incentive not to appeal.

Attorneys fees shifted under the Uniform Declaratory Judgment Act are famously hard to get reversed or adjusted on appeal. (( The surest way is to reverse the underlying declaration on the merits — but, in truth, that doesn’t require the fee award to be vacated. The Texas UDJA permits fees to be shifted even to the nonprevailing party if the trial court concludes that doing so would be equitable and just. For example, numerous school districts received attorneys fees for the most recent round of school finance litigation — even the districts whose claims had been rejected outright by the Texas Supreme Court. )) The question here would be whether this fee-shifting structure was “equitable and just,” which is a question on which trial courts have been given some latitude.

Does that mushy standard come down to the trial court’s motives? Perhaps.

If the appellate court concludes that this fee structure was motivated by fairness to PSB because (the appellate court presumably concludes) the claims are sufficiently frivolous that the claim should not have been brought, then the fee award seems defensible. It might even be generous to the plaintiff, the thinking could go, because the plaintiff is given a second chance to recognize the error because trial fees were not awarded. But if the appellate court believes that this fee structure was even in part based on a desire of the trial court to evade appellate review, it seems very difficult to justify.

Although the parties seem more concerned about the substantive question (as they should be), this case may ultimately offer some guidance about when or if trial courts can use fee shifting to prevent appellate review.

Source: “Who’s paying? PSB pays its own legal fees, but Gilbert et al will pay for failed appeals, judge decides (Newspaper Tree)

The TexParte blog has posted excerpts from an internal court email about a subject well known to anyone who has clerked on the Texas Supreme Court in the past two decades — Justice Hecht’s car.

For his entire tenure on the Court, Justice Hecht has driven the same 1984 Caprice Classic, which at various times became the subject of gentle humor from the staff. (At one point, I’m told, the staff affixed a set of spinning rims to the car to try to spruce it up.) And I either did not know or had forgotten that the car had been named “Rocinante”.

According to TexParte’s source, the car made it to “234,654.7 miles”, which is a very respectable distance. The 1984 model car was perhaps built in 1983, which would make it the same age as some of the Court’s incoming briefing attorneys.

Eastland Court rejects argument that wind farms are so ugly as to constitute a nuisance to nearby landowners; says recognizing aesthetic damages is not for an intermediate court to decide

Rankin v. FPL Energy, LLC (Tex. App.–Eastland Aug. 21, 2008)

“We do not minimize the impact of FPL’s wind farm by characterizing it as an emotional reaction. Unobstructed sunsets, panoramic landscapes, and starlit skies have inspired countless artists and authors and have brought great pleasure to those fortunate enough to live in scenic rural settings. The loss of this view has undoubtedly impacted Plaintiffs. A landowner’s view, however, is largely defined by what his neighbors are utilizing their property for. Texas caselaw recognizes few restrictions on the lawful use of property. If Plaintiffs have the right to bring a nuisance action because a neighbor’s lawful activity substantially interferes with their view, they have, in effect, the right to zone the surrounding property.”

If municipalities can zone property for aesthetic reasons, it’s not entirely clear to me why common-law nuisance claims couldn’t accomplish the same goal. But I understand the reluctance of courts to let purely aesthetic concerns rule the day, if that would lead to inconsistent or unpredictable results in different cases.

I saw some similar windmills up close on a recent trip. They are much bigger than I had imagined. I can see why T. Boone Pickens doesn’t want them on his own lawn. (( “Q: And you’ll do all this on your beautiful 68,000-acre ranch?

A: I’m not going to have the windmills on my ranch. They’re ugly. The hub of each turbine is up 280 feet, and then you have a 120-foot radius on the blade. It’s the size of a 40-story building.

Q: So whose land are they going on?

A: My neighbors, mainly south of my ranch. …” ))

Here, the trial court instructed the jury that it could not weigh aesthetic damages because that was not a component of Texas nuisance law. It also granted partial summary judgment to FPL on that aspect of the plaintiffs’ claims.

The court of appeals affirmed, holding that the trial court’s instruction was proper.

Aesthetical impact either is or is not a substantial interference with the use and enjoyment of land. If a jury can consider aesthetics as a condition, then it can find nuisance because of aesthetics. Because Texas law does not provide a nuisance action for aesthetical impact, the trial court did not err by granting FPL’s motion for partial summary judgment and by instructing the jury to exclude from its consideration the aesthetical impact of the wind farm.

And the Abilene paper reports that this will soon be on the Supreme Court’s docket. See “Wind farm opponents plan appeal” (Abilene Reporter-News)

Other coverage: “Court sides with wind farm in suit by landowners” (Austin American Statesman)

Potentially broader personal liability for corporate officers for state taxes

This case illustrates an appellate dilemma that comes up more often than you’d expect.

The Texas State and Local Tax Law Blog, run by Alan Sherman, has a post about a recent Third Court case that could affect the personal liability of business executives for state taxes.

The question is whether an individual is a “responsible person” such that they can personally be required to pay the taxes, piercing through whatever corporate shield would normally exist. The case is State of Texas v. Crawford, No. 03-07-00622-CV (Tex. App.—Austin Aug. 21, 2008).

In short, the Third Court ruled for the corporate officers, but did so while restating the standard in terms that were (Sherman suggests) broader than previous law. Now, instead of having to have “actual knowledge,” it would be enough for the officers to act in “reckless disregard.”

Here’s the rub: Who would bring this appeal to the Texas Supreme Court? If the State does, then the State risks upsetting a potentially helpful new standard in the Third Court, which has exclusive jurisdiction over these claims. ((The State may well file a petition; there may be other aspects of this new standard with which the State disagrees, such as the Third Court’s allocation of the burden of proof about recklessness to the State.))

On the other hand, the corporate officers in this particular case have no personal incentive to appeal because they are off the hook. Unless there is some other party behind the scenes that is a repeat litigant (such as a D&O insurer), then it seems unlikely that the idea would even be entertained. (( And even if the corporate officers were the kinds of repeat litigants who cared more about the state of the law than the outcome of any particular case, it’s not entirely clear that they could file a petition that was just about the reasoning of the opinion. After all, the judgment of the Third Court already favors them; they would just be asking the Texas Supreme Court to issue the same judgment with a different opinion attached. (Texas Rule of Appellate Procedure 53 also talks in terms of a petition being filed by “[a] party who seeks to alter the court of appeals’ judgment must file a petition for review.”) ))

This dilemma comes up more often than you might expect. When I was at the State, we would sometimes find ourselves on the other side of it — the party winning a judgment below but disagreeing with the legal standard applied in the opinion. Unless the losing party takes the case up, you can be stuck with bad law until there is another vehicle to raise the same question.

This is the last week of the Texas Supreme Court’s summer recess. No events are scheduled other than Friday’s order list. Next week, the Court is scheduled to have a long conference to resolve some of the petitions and other matters that have built up over the past month.

I’ve used the Court’s downtime to take a little breather from the blog, but I have plans to keep up when the Court hits the accelerator starting next week. I have a few articles coming up that relate to the Court’s upcoming argument calendar. And, no doubt, I’ll also have something to say about the Court’s (perhaps overly hyped) year-end orders coming up on August 29th.

Articles from the Past (Two) Weeks

• Order List for 8-8-2008

• Order List for 8-1-2008