This is my second installment about last Friday’s big orders list. You can also read the first installment, which summarized five of the cases and listed out the new grants.
Opinion Summaries (continued)
The majority opinion sums up the question this way: “In this case we consider whether claims that a doctor assaulted patients by exceeding the proper scope of physical examinations are subject to [Texas law’s medical] expert report requirements.” If so, then as a health-care liability claim (HCLC), a plaintiff must offer sufficiently detailed expert reports on a short timetable after filing suit. (( That status also triggers interlocutory appeals for defendants and certain fee-shifting provisions that are not implicated here. ))
The summary of the facts:
Two female patients sued a medical doctor … alleging the doctor assaulted the patients by groping their breasts while examining them for sinus and flu symptoms. Although they maintained that the claims were not HCLCs, the patients served the doctor and professional association with reports from a physician who, based only on the assumption that allegations in the plaintiffs’ pleadings were true, opined that the defendant doctor’s alleged actions did not fall within any appropriate standard of care. The defendants argued that the claims were HCLCs and moved for dismissal of the suit on the basis that the reports were deficient.
Justice Johnson, writing for four other Justices (and for Justice Willett in part) concluded that Texas law “creates a rebuttable presumption that a patient’s claims against a physician or health care provider based on facts implicating the defendant’s conduct during the patient’s care, treatment, or confinement are HCLCs.” The majority concluded that the presumption had not been rebutted here, placing the burden on the plaintiff to make this showing by conclusive proof (leaving open no factual dispute whatsoever). The majority then addressed the expert reports, concluding that this evidence was not sufficient to carry that burden.
Justice Hecht, joined by Justice Medina, would have concluded that this expert evidence was indeed sufficient to show that the alleged conduct (groping) did not fit within medical practice: “The expert report here says, in essence, that sexual assault is not a part of health care. One need not turn to the Mayo Clinic for such an opinion. … The claimants in this case proceeded exactly as they should have. Insisting that their claims are not HCLCs but claims for assault, they nevertheless produced an expert report.” In the view of these two Justices, the report could fairly be criticized for having unduly relied on the allegations in the pleadings (rather than medical records), but as they note, “it seems unlikely that a chart notation, ‘groped patient unnecessarily’, will be found.” For that reason, they would have concluded that this expert report was good enough to rebut the presumption.
Justice Lehrmann’s opinion takes issue with the standard of proof, arguing that “the Court places too onerous a burden on claimants by requiring them to conclusively establish that their claims are not health care liability claims.” She would still place a burden on the plaintiffs to show that the claim was not about health care liability (and would make it a heavy burden, perhaps the “clear and convincing” standard). But in her view the Court’s standard of conclusive proof is too hard to meet.
Justice Willett’s opinion explains why he did not join the opinion in full. In his view, the Court should not have reached the question of the sufficiency of these expert reports, leaving that for the trial court.
This case about valuing property in condemnation is framed in terms of the “value to the taker” rule, which generally excludes evidence of how a condemning authority plans to use the property.
The Court split 6-3 over how to apply that principle here. And the stakes for the parties were particularly high, with one side suggesting a value of about $50,000 for these 24 acres, and the other suggesting a value of nearly $21 million.
Why the divergence? This land sits under a working gas-processing facility. The land had been leased to a private gas company decades before, and as the lease term approached its end, the land owner and this tenant could not strike a new deal. So, the tenant gas company merged with a public utility and then condemned the land on which its processing facility sat.
Justice Lehrmann wrote the majority, which concluded that the expert testimony setting a $21 million valuation should not have been admitted. In particular, the opinion criticized the expert’s focus on the unique costs and cost-savings that would be incurred by this particular former tenant if it had to dismantle this plant or construct a new one — not a general market price for the land.
Justice Johnson wrote the dissent, which contended that an appraisal should (in circumstances such as these) consider the effect that existing contractual arrangements have on the land’s value: “the lease provision giving [the utility] six months to move its plant was a factor affecting the value of the property that not only could be taken into consideration, but had to be taken into consideration under the USPAP [Uniform Standards of Professional Appraisal Practice] and Texas law because it would affect the value to a hypothetical willing buyer.” The dissent also criticized the majority’s focus on statements in the expert report (which was not submitted into evidence), as distinguished from the trial testimony itself.
This case about collateral and direct attacks on a judgment involves a default judgment. Once the default was brought to the defendant’s attention, it was too late to file any sort of direct attack upon the judgment.
The defendant argued that the judgment was void, not merely voidable, because it had not been properly served with notice. The Texas Supreme Court discussed some confusion in Texas law over the distinction between void and voidable judgments, especially as that distinction relates to allegations that a defendant had not been notified about a lawsuit. (In general, Texas law had classified these complaints as involving merely voidable errors that had to be more timely raised. Void judgments can be challenged at any time, even “collaterally” through other lawsuits. Merely voidable judgments, by contrast, must be challenged through some more “direct” attack that can be barred if brought more than four years after judgment.)
The Texas Supreme Court traced this distinction in Texas case law to a (presumed) distinction between subject-matter and personal jurisdiction. Because questions of personal jurisdiction could be waived by the parties, Texas cases had concluded, similar complaints about a lack of notice involved merely voidable errors and thus could be time-barred.
In this opinion, the Texas Supreme Court changes that analysis — a holding that could be very significant for those fighting default judgments. The Court noted an intervening U.S. Supreme Court decision holding that the U.S. Constitution requires some way to challenge a judgment entered without adequate notice or service. Thus, “[i]n light of Peralta, we hold that a judgment may also be challenged through a collateral attack when a failure to establish personal jurisdiction violates due process.” (( Peralta v. Heights Medical Center, Inc., 485 U.S. 80 (1988). ))
Critically, this new avenue to challenge default judgments applies only to defects in notice that rise to a federal constitutional level — not merely technical defects that might otherwise violate state procedural rules (which can still be time-barred). The Court walked through the record here, ultimately holding that this defendant’s complaint about service involved technical defects that did not deprive the defendant of a meaningful opportunity to be heard so as to render the judgment void. Because it did not involve constitutional defects, this challenge was time-barred.
But the defendant had a second line of attack: an argument that this judgment had been procured by extrinsic fraud. Among other arguments, the defendants contended that the attorney for the plaintiffs had violated the Texas Lawyer’s Creed (by not trying to notify opposing counsel of an intent to take a default judgment) and other disciplinary violations. The Texas Supreme Court held that this conduct did not constitute evidence of extrinsic fraud that might subject a judgment to attack. On the other hand, the Court concluded, “under the specific circumstances presented in this case,” that lawyer’s failure to provide the clerk with the accurate last-known address for the defendant — despite himself knowing that information — was at least some evidence of extrinsic fraud that would defeat summary judgment and allow the defendant’s challenge to the default judgment to move forward in the trial court.
This was a civil-commitment case involving an alleged sexually violent predator. Texas law permits civil commitment if statutory requirements are met. Here, the district court concluded that commitment was warranted — after excluding one of the expert witnesses on behalf of the defendant. The court of appeals reversed and ordered a new trial.
The Texas Supreme Court agreed that a new trial was warranted, but it disagreed with the court of appeals’ reasons, especially its interpretation of the Texas statute governing sexually violent predators.
The court of appeals had viewed the statute as having two somewhat distinct elements — one of which suggested a particular medical diagnosis (“a congenital or acquired condition”) that might require psychological expert testimony:
“Behavioral abnormality” means a congenital or acquired condition that, by affecting a person’s emotional or volitional capacity, predisposes the person to commit a sexually violent offense, to the extent that the person becomes a menace to the health and safety of another person. (Tex. Health and Safety Code §841.002(2))
The Texas Supreme Court disagreed about how to read that statute. It held that “[t]he condition and predisposition cannot be separate things, as the court of appeals tried to make them.” Instead, the Texas Supreme Court concluded that expert testimony offered in support — or in opposition to — this type of civil commitment could be offered by someone with non-medical expertise (such as the very experienced counselor offered as an expert here).
Thus, the Court affirmed the court of appeals judgment (which had also remanded for a new trial), but for different reasons. The Court holds that it was improper for the trial court to have excluded the defendant’s key expert, “not for reasons peculiar to her experience and training, but because she is not a physician or psychologist. In this context, we think a more careful review of the trial court’s ruling is warranted.”
U-HAUL INTERNATIONAL, INC. D/B/A U-HAUL, U-HAUL CO. OF TEXAS, INC. D/B/A U-HAUL OF DALLAS, AND EAST FORK ENTERPRISES, INC. D/B/A JOT 'EM DOWN, INC. v. TALMADGE WALDRIP, BERNICE WALDRIP, DINAH SIMINGTON, AND ANNE WALDRIP-BOYD, No. 10-0781
The plaintiffs brought negligence claims against what the Court describes as “several U-Haul corporate entities” over an accident that had caused a serious injury. The trial court entered judgment for the plaintiffs on a jury verdict. U-Haul challenged, among other things, whether the evidence of a pattern of negligence had, in fact, been so attenuated and unrelated to this particular accident that the evidence was irrelevant and caused confusion on the jury.
The Court referred back to its holding in Service Corporation International and Sci Texas Funeral Services, Inc., d/b/a Mont Meta Memorial Park v. Juanita G. Guerra, Julie Ann Ramirez, Gracie Little and Mary Esther Martinez, No. 09-0941
, in which it concluded that “evidence of other lawsuits, verdicts, and judgments” had been too attenuated. The test it applied was that this evidence would be admissible if “the prior acts were ‘so connected with the transaction at issue that they may all be parts of a system, scheme or plan.'” [see page 21 of U-Haul]
Here, some of the evidence described investigations about U-Haul’s Canada operations, including different types of vehicles that had different mechanical problems. [Slip op. 23-27] The Court concluded that the record did not explain how all of these disparate pieces of evidence were woven together into the kind of single system that would have satisfied Service Corporation International.
The Court held that admitting this testimony likely led to an improper verdict, and thus one that should be reversed. But it stopped short of rendering judgment. Instead, it concluded that there was sufficient (proper) evidence to support a new trial.
That reversal on liability would have had the effect of reversing the exemplary damage award as well. Even so, the Court addressed U-Haul’s exemplary damages arguments. The guidance it offered may be useful on remand — or to other litigants trying to amass “clear and convincing” evidence under the Texas exemplary-damage statute.
The Court held that this record was not “clear and convincing” about gross negligence. In this type of negligent-hiring case, the evidence must show not only that the hiring posed an objectively high risk, but also that the employer had subjective awareness of that risk:
[W]e are concerned about the impact the court of appeals’ reasoning may have on future gross-negligence cases involving alleged reckless hiring. Under the court of appeals’ reasoning, any time an employer hires a previously inexperienced employee requiring training in specific safety tasks, the employer conceivably may be found grossly negligent and subject to punitive damages if the employee acts negligently in performing her tasks. However, a party cannot be liable for gross negligence when it actually and subjectively believes that circumstances pose no risk to the injured party, even if they are wrong. (Slip op. 36)
This is a case about contractual risk-shifting in an oil and gas operating agreement. Here, the language chosen for the contract “exempts the operator from liability for activities under the agreement unless it arises from gross negligence or willful misconduct.”
The court of appeals held that the clause did not apply to this dispute, which it characterized as being in the nature of contract.
After a detailed analysis of the contract language and the history of similar clauses, the Texas Supreme Court concluded that the clause did apply to this situation
With today’s orders list, the Texas Supreme Court issued opinions in eighteenseventeen cases, set five cases for oral argument (into next January), and dismissed a case argued last October as being improvidently granted.
These are the “year end” orders, coming at the end of the State of Texas’s fiscal year. This is also the traditional time for the court statistics to be measured and, as such, usually results in a flurry of opinions. Last year, the Court issued nineteen opinions.
I’ve made quick notes about a few cases on the list below.
Opinions Issued
This is a potentially major takings case about when government can take property for private (rather than public) benefit. The City of Austin took a parcel of land in downtown that was, in short order, folded into a private development. A jury concluded that this taking was made in bad faith, and the court of appeals agreed.
Divided 7-2, the Texas Supreme Court reverses. The majority (written by Justice Guzman) holds that the record here does not support the jury’s conclusion. The dissent (written by Justice Hecht) argues that it does.
What makes this a potential landmark is the strength of the evidence — coming from (as the dissent notes) the city’s own witnesses. If this evidence is so weak that it cannot support a verdict in favor of a landowner on this type of bad-faith takings claim, these may be very difficult to win indeed.
This is a case about how much time a claimant has to file suit under the Texas Commission on Human Rights Act (TCHRA). From Justice Guzman’s majority opinion:
[I]n 2009, Congress enacted the Lilly Ledbetter Fair Pay Act (Ledbetter Act), amending Title VII to provide that a discriminatory pay decision occurs each time a paycheck is received and not just when an initial salary decision is made.3 Thus, when a claimant files a discriminatory pay claim under federal law, the 180-day limitations period begins each time a claimant receives a paycheck containing a discriminatory amount. The Texas Legislature has not similarly amended the TCHRA.
As a matter of first impression, we must determine whether the federal Ledbetter Act applies to a claim brought under the TCHRA so that the 180-day limitations period begins anew each time a claimant receives a paycheck containing a discriminatory amount.
Because Title VII and the TCHRA are no longer analogous where discriminatory pay claims are concerned, and because the Legislature—and not this Court—is the proper governmental branch to amend the TCHRA, we hold that the federal Ledbetter Act does not apply to a claim brought under the TCHRA. Thus, in accordance with the TCHRA and our precedent, we conclude that a pay discrimination complaint must generally be brought within 180 days of the date the claimant is informed of the compensation decision.
This case asked whether state action that (perhaps) led to a landowner losing a federal water permit constituted a taking. (The case was featured in this Texas Tribune piece.)
Today, the Court held that it did not. Justice Wainwright wrote for the majority, emphasizing that it was “the United States Army Corps of Engineers, not the State of Texas, [that] exercised its exclusive authority to deny petitioner’s application for a federal mitigation banking permit on the land.”
Justice Hecht, writing for three Justices, would have held that this was a taking because it was a situation where “government’s own interests in the ownership or use of specific property conflict[s] with the landowner’s. . . . Acting in its own interest, the State has persuaded the Corps to reject Hearts Bluff’s application, apparently the first time the Corps has ever rejected a mitigation bank application.”
This might have been the case that resolved how detailed the trial court must be in granting a motion for new trial. But that issue will have to wait (at least until January).
The order granting new trial here listed several reasons — but joined with “and/or” clauses, making it unclear which reason was being used. Moreover, one of those reasons echoed the old (and disapproved) “interest of justice” language, meaning that an appellate court could not be certain whether that ground had been used. Accordingly, the majority held that this order violated the Court’s already existing prohibition on an order relying on the “interest of justice” alone to grant a new trial.
The takeaway is this: If you have “and/or” clauses in an order granting new trial, you make the order more vulnerable to reversal, not less.
As Justice Wainwright notes in his concurrence, the Court has just granted another mandamus petition that more “squarely raises the issue” of how in-depth these orders must be: In re Toyota Motor Sales, U.S.A., Inc., No. 10-0933.
This case set up a procedural clash between (1) the jurisdictional rule that Texas appellate courts can only hear an interlocutory appeal that fits within narrow grounds set by statute and (2) the jurisdictional principle that subject-matter jurisdiction is a question that can be raised at any time.
The Court took a slightly narrower path but, in effect, held that the second of these principles controlled. Justice Johnson wrote for a majority of six, concluding that the court of appeals should have heard the immunity argument even though it had not been presented before. But the Court remanded to the trial court because it concluded there was a possibility that the plaintiff here could cure that defect by amending the pleadings.
As Justice Hecht notes in his concurrence, the majority opinion was not framed in jurisdictional absolutes: “‘we, like the U.S. Supreme Court, have recognized that our sometimes intemperate use of the term “jurisdictional” has caused problems.’ All we decide in this case is whether an appellate court in an interlocutory appeal permitted by statute can decide an issue of governmental immunity from suit outside the scope of the appeal. The Court answers yes and wisely stops there.”
For those who litigate against the government, the implications are pretty clear: Every appeal is potentially an appeal about sovereign immunity. The consolation is that, if the government has not presented the argument in the trial court, it may not be able to obtain a complete dismissal instead of a remand.
Justice Lehrmann wrote a dissent, joined by Chief Justice Jefferson and Justice Medina, that would have held this sovereign-immunity issue cannot be raised for the first time in an interlocutory appeal.
See the other opinions and grants
With today’s orders list, the Texas Supreme Court chose two new cases for oral argument — one direct appeal and one certified question.
Direct appeal challenging the constitutionality of the margins tax
I wrote a little about this case last month in “Nestle II: Revisiting the Texas business-margins tax”. As anticipated, the Court chose an argument date outside of its regular schedule to accommodate the Legislature’s short 120-day deadline for this class of cases.
This oral argument has been set for September 18, 2012 — a day previously marked as an internal conference.
Certified question about construction insurance
These questions come from the Fifth Circuit, which had previously reached a deeply divided 2-1 panel decision. The panel disagreed, in part, about what Texas law would provide about this insurance question. You can read about that earlier opinion over at 600camp.
On rehearing, the Fifth Circuit panel decided to withdraw its previous opinion and instead certified the following two questions to the Texas Supreme Court for an authoritative answer about Texas law:
- 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.
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If the answer to question one is “Yes” and the contractual liability exclusion is triggered, do the allegations in the underlying lawsuit alleging that the contractor violated its common law duty to perform the contract in a careful, workmanlike, and non-negligent manner fall within the exception to the contractual liability exclusion for “liability that would exist in the absence of contract.”
This is the second recent certified question from the Fifth Circuit, joining a recent set of questions about at-will employment status.
The Texas Supreme Court’s orders list had some real activity today, denying a large number of pending rehearing requests and petitions for review.
The Court also chose seven cases for oral argument (scheduled for December) and issued a per curiam opinion in a case about premises liability for the government.
No more guidance about Texas Rice Land Partners
Among other orders, the Court denied the motion for rehearing in Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline-Texas, LLC, No. 09-0901, which held that a pipeline company’s eminent domain authority depends on it being able to prove that the pipeline being built would not be operated solely for its own use. On this second motion for rehearing, the pipelines had asked the Court to clarify how much of the public would have to be served to qualify. In particular, they asked about footnote 23 of the March 2012 opinion:
We further note that the pipeline does not serve a public use if it only transports gas for a corporate parent or affiliate. Hence, we see no significance to the fact that Denbury Green Pipeline-Texas, LLC, the owner of the pipeline here, is a wholly owned subsidiary of the company engaged in the tertiary recovery operations. Transporting gas solely for the benefit of a corporate parent or other affiliate is not a public use of the pipeline. Moreover, even if the Legislature included findings and an explicit declaration of public purpose, such material, while undeniably instructive, would not be entitled to insurmountable deference.
Today, the Court declined to narrow that language about “affiliates.” Justice Wainwright, joined by Justice Johnson, issued what is styled as a concurrence but appears to be more of a dissent to the denial of rehearing. (“I, therefore, respectfully disagree and would address the concerns raised on rehearing by Denbury.”). The opinion discusses several ways that the Court could have narrowed the reach of the term “affiliate.” Its concluding footnote observes that, given the public concern reflected in amicus briefs, “[t]his is a matter the Legislature could address.”
Which road conditions trigger government liability
The only merits decision issued today was in City of Denton v. Rachel Paper, 11-0596 (per curiam). The key question was whether a defective road condition allegedly caused by the sloppiness of the government’s work qualified as a “special defect” that would trigger heightened responsibility. The Court held that the allegation that the government had caused this condition was irrelevant; what mattered is whether the government knew of the condition.
New petitions chosen for oral argument
With this week’s orders, the Court has already filled up its oral-argument schedule through December.
December 4, 2012
- Enterprise Products Partners, L.P., et al. v. Catherine Mitchell, et al., 11-0366 (Justice Guzman not sitting)
December 5, 2012
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Jose L. Elizondo and Guillermina Elizondo v. Ronald D. Krist, The Krist Law Firm, P.C., Kevin D. Krist and William T. Wells, 11-0438 (Justice Hecht not sitting)
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Christus Health Gulf Coast, et al. v. Aetna, Inc. and Aetna Health, Inc., 11-0483
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Joseph E. Hancock v. Easwaran P. Variyam, 11-0772
December 6, 2012
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Larry T. Long, et al. v. Castle Texas Production, L.P., 11-0161
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The Office of the Attorney General of Texas v. Richard Lynn Scholer, 11-0796
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Liberty Mutual Insurance Co. v. Ricky Adcock, 11-0934
