How soon must an attorney notify his client of a court filing?

The answer to this question may depend upon the circumstances.  As reflected in one recent Dallas Court of Appeals opinion, minutes mattered in order for the lawyer to ensure compliance with her obligation not to engage in conduct that might disrupt pending appellate proceedings.  This opinion could serve as a good law school exam question.

Under the facts of the case, the Dallas County Child Protective Services Unit (CPS) filed suit to terminate parental rights of a child.  The child’s foster parents had had possession of the child for 16 months and expressed an interest in adopting the child.  However, CPS sought to place the child with a maternal aunt and uncle in Florida.

In some unusual circumstances, just prior to trial, the biological mother asked the trial court to strike the intervention of the foster parents, which the court did.  Minutes later a trial was held outside of the foster parents’ presence, which lasted all of 9 minutes.  At the conclusion of the trial, the court appointed the Florida aunt and uncle joint managing conservators.

Immediately following the trial, the parties made arrangements for CPS to take the child from the foster parents.  The foster parents advised the CPS attorney’s supervisor that they were filing a petition for writ of mandamus and were seeking an emergency stay order.  Before the filing, CPS removed the child from the foster parents’ home.  The foster parents then filed their petition for writ of mandamus and motion for emergency stay and all counsel were notified of the filings.  Thirty minutes after CPS’s counsel was notified of the filings, CPS released the child to the Florida aunt and uncle, who immediately left with the child to return to Florida.  Fifty-five minutes later, the Dallas Court of Appeals issued an order staying all orders of the trial court.

Although the court of appeals concluded that mandamus relief was not appropriate because the foster parents had an adequate remedy by appeal, the court nonetheless wrote to express its concern over the fact that neither the CPS case worker’s supervisor nor CPS’s attorney attempted to contact the Florida aunt and uncle after learning of the stay order.  The appellate court acknowledged that the child had been handed over to the Florida aunt and uncle before the stay order had issued, but the court questioned the decision to remove the child with such haste within 4 hours of the trial court’s rulings and in the face of the emergency filings.

After noting that the speed of the transfer violated CPS’s own internal guidelines and showed a lack concern for the child’s best interest, the court observed that the failure of the State to notify CPS of the appellate filings potentially violated ethical obligations to keep a client reasonably informed and not to engage in conduct intended to disrupt court proceedings.  The court of appeals concluded by cautioning the State to treat future emergency proceedings as serious matters deserving of review and respect, and warning that the failure to do so may warrant referral to the grievance process.

In re Schklair, No. 05-17-00610-CV (Tex. App.–Dallas June 23, 2017, orig. proceeding)

Supreme Court Limits Class-Action Tolling

The Supreme Court has held that class action tolling under American Pipe does not toll the time within which a suit must be filed under a statute of repose.

In American Pipe the Court held that “the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class.”  American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554 (1974).  The open question was whether class tolling would also apply to statutes of repose.

In California Public Employees’ Retirement System v. ANZ Securities, No. 16–373 (June 26, 2017), a putative class action was filed under Section 11 of the Securities Act of 1933 concerning securities offerings of Lehman Brothers Holdings.  Section 13 of the Securities Act contains a three-year statute of repose.  More than three years after the securities were offered, the petitioner filed an individual action alleging identical violations.  After a proposed settlement was reached in the putative class action, the petitioner opted out of the class.  The respondents moved to dismiss the individual suit as untimely but the petitioner argued that American Pipe tolled limitations during the pendency of the putative class action.

The Supreme Court disagreed.  It reasoned that American Pipe was based on “the judicial power to promote equity, rather than to interpret and enforce statutory provisions.”  Whereas the statute at issue in American Pipe was a traditional statute of limitations, Section 13 of the Securities Act was held to be a true statute of repose whose purpose is to “create ‘an absolute bar on a defendant’s temporal liability.’”  In light of their purpose, the court held that statutes of repose “override customary tolling rules arising from the equitable powers of courts” and are not subject to tolling without legislative direction.

The court therefore affirmed the dismissal of the individual suit over the vigorous opposition of a four-justice dissent, which would have held that American Pipe tolling applies to statutes of repose.  Justice Gorsuch participated in the opinion and was in the majority.

California Public Employees’ Retirement System v. ANZ Securities, No. 16–373 (June 26, 2017)

Patent Exhaustion: A Win for Printer-Ink Refillers and Another Rebuke to the Federal Circuit

Just a week after reversing the Federal Circuit’s longstanding interpretation of patent venue in TC Heartland LLC v. Kraft Foods Group, No. 16-341 (May 22, 2017), the Supreme Court again reversed the Federal Circuit, this time with respect to patent exhaustion.

U.S. patent laws entitle a patent holder to prevent others from making, selling, or importing the patented invention “without authority” from the patentee.  35 U. S. C. §§ 154(a), 271(a).  However, patent rights end or exhaust once a patented product is sold.  A purchaser may freely reuse or resell the product without infringing on the patent.  The Supreme Court has now held that a patentee cannot retain patent controls after a sale by prohibiting buyers from reusing or reselling the patented items.  It also held that products sold overseas exhaust patent rights and preclude a patentee from claiming infringement when the products are later imported and resold in the U.S. without the patentee’s authority.

Lexmark sells patented toner cartridges for laser printers.  Remanufacturers like Impression Products buy empty Lexmark cartridges in the U.S. and overseas, refill them, and sell them at lower prices than Lexmark charges.  Lexmark tried to prevent customers from selling used cartridges through a Return Program in which it sold cartridges at a discount in exchange for an agreement that the buyer would not reuse or resell the cartridges.  Lexmark sued Impression Products and others claiming that they were infringing Lexmark’s patents by refilling Return Program cartridges, and by importing and filling overseas-sold cartridges.

Lexmark argued that its patent rights had not exhausted because it had not authorized reuse and resale of Return Program cartridges, nor given authority to import cartridges sold overseas at lower prices because they did not carry patent protection until they were brought into the U.S.  Impression Products argued that all patent rights as to cartridges that had once been sold were exhausted.

The Federal Circuit, sitting en banc, held for Lexmark as to both issues.  Lexmark Intn’l, Inc. v. Impression Products, Inc., 816 F. 2d 721 (Fed. Cir. 2016).  It held that, unlike an ordinary sale, Lexmark’s Return Program sales were restricted and thus resales were “without authority.”  As to cartridges sold abroad, the circuit held that patent exhaustion did not arise because the sales were made where American patent laws do not apply.  It reasoned that the patentee did not receive the rewards allowed by the patent laws from selling in an American market.

The Supreme Court disagreed.  It held that once an item is sold, the patentee has “enjoyed all the rights secured” by the patent law and has no further right to restrain the use of the product through that law.  The Court traced the doctrine to the common-law rule against restraints on alienation, citing Lord Coke’s writings from the 17th century.  The Court disagreed with the Federal Circuit’s belief that the exhaustion doctrine was merely an interpretation of the patent law’s prohibition on selling a patented product “without authority.”  Instead, exhaustion is a limit on the scope of the patentee’s own rights under the patent laws.  Thus, even if Lexmark’s contracts with its customers were enforceable under contract law, they did not allow Lexmark to retain patent rights items it had sold.

The Court further held that sales outside the United States exhaust all rights under the patent laws, analogizing to the “first sale doctrine” from copyright law.  That doctrine provides that once a copyright owner sells a copy of its work, it loses the power to restrict resales even if the first sale was made abroad.  Applying patent exhaustion to foreign sales was just as straightforward because nothing in the Patent Act indicates that the “borderless common law principle” of exhaustion should be limited to domestic sales.

The decision was 7-1 with Justice Gorsuch not participating.  Justice Ginsburg concurred as to the domestic sales but dissented as to international exhaustion.

Impression Products, Inc. vs. Lexmark International, Inc., No. 15-1189 (May 30, 2017)

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Supreme Court Limits Forum Shopping in Patent Cases

In a closely-watched case, the Supreme Court greatly narrowed venue for patent cases.  The ruling will limit forum shopping and greatly reduce the number of cases filed in the Eastern District of Texas, which is perceived as the most favorable district for plaintiffs bringing patent claims.

In recent years as many as much as 30-40% of all patent infringement suits in the country were filed in the rural Eastern District of Texas.  Plaintiffs ranged from giant tech companies to non-practicing entities, known pejoratively as “patent trolls”—meaning individuals or companies that do not manufacture any products but attempt to enforce patents far beyond their actual value through frivolous and expensive litigation in places that were perceived to be friendly to plaintiffs.

How did this happen?  Federal law has a venue provision specific to patent cases, 28 U.S.C.  § 1400(b).  The statute provides that suits for patent infringement may be brought only “in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”  In 1957, the Supreme Court held that for purposes of Section 1400(b), a domestic corporation “resides” only in its state of incorporation.  Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222, 226 (1957).  This meant most patent cases had to be filed in the defendant’s home state or where they had a regular and established place of business.

In 1988, Congress adopted a new definition of “reside” as it applies in the general federal venue statute, 28 U.S.C. § 1391(c).  The new statute provided that except as otherwise provided by law and for all venue purposes, a corporation can be sued “in any judicial district in which such defendant is subject to the court’s personal jurisdiction.”  The Federal Circuit held that the new general venue statute controlled over the older and more restrictive patent venue statute.  VE Holding Corp. v. Johnson Gas Appliance Co., 917 F. 2d 1574, 1578 (Fed. Cir. 1990).  Thus, for over 25 years, patent plaintiffs have been able to file suits against major American manufacturers almost anywhere they wanted.  Venues that were perceived to be favorable to patent plaintiffs—like the Eastern District of Texas—were inundated with patent suits.  Entire support systems of local lawyers as well as hotels, restaurants, and temporary office locations grew to support the flood of patent cases.

Those days are now at an end.  In an 8-0 opinion, the Supreme Court held that the original patent venue statute and the Supreme Court’s 1957 interpretation continues to be the rule for patent cases.  Corporate defendants can no longer be sued anywhere the plaintiffs want.  The plaintiffs’ favored districts will no longer be available for nearly every suit.  In Texas, the Eastern District federal courts and all of the support systems will face a major contraction as the new ruling takes effect.  The ruling is being hailed by large corporations as a major rebalancing of litigation fairness in this very lucrative and expensive area.

TC Heartland LLC v. Kraft Foods Group, No. 16-341 (May 22, 2017)

Whose Right is it Anyway? Unconstitutional Speaker Discrimination in Texas’ Anti-SLAPP Scheme

Freedom of speech and thought lie at the core of liberty.  Though many philosophers, statesmen, and legal practitioners have opined on the value of free speech and thought, Justice Louis Brandies best captured the value of free speech and thought in our constitutional scheme:

Those who won our independence believed that the final end of the state was to make [people] free to develop their faculties, and that in its government the deliberative forces should prevail over the arbitrary. . . They believed that freedom to think as you will and speak as you think are means indispensable to the discovery and spread of political truth; that without free speech and assembly discussion would be futile; that with them, discussion affords ordinarily adequate protection against the dissemination of noxious doctrine; that the greatest menace to freedom is an inert people; that public discussion is a political duty; and that this should be a fundamental principle of American government.

Whitney v. California, 274 U.S. 357, 375 (1927) (Brandeis, J., concurring).

Despite its central place in our constitutional scheme, the right to free speech is extremely fragile. Government imposed limitations to speech and thought sometimes elude detection, because government does not always directly regulate speech and, even when it does, the limitations are not always obvious.  Notwithstanding the sometimes opaque nature of direct impositions, a major threat to speech and thought comes from indirect government impositions.

SLAPP Suits as Indirect Government Impositions to Speech

Strategic litigation against public participation (SLAPP) provides one example of an indirect governmentally-imposed limitation to speech and thought.  These are suits brought by one party in an effort to silence another party against whom the suit is filed.  The prototypical SLAPP suit involves a defamation claim against the defendant.  Though government is not directly involved in chilling or silencing the defendant’s speech, the judicial system is the means by which the plaintiff chills or silences the defendant’s speech.  The threat of a potential judgment looming over the defendant implicates the government in the plaintiff’s effort to chill or silence the defendant’s speech.

Texas’ Anti-SLAPP Legislation

Texas enacted Anti-SLAPP legislation to curb litigants’ efforts to employ the judicial system as a means to silence or chill another’s speech.  The Texas Citizens Participation Act (TCPA) provides pretrial procedural checks against litigation designed to chill a party’s right to free speech, among other first Amendment rights.  See Tex. Civ. Prac. & Rem. Code §§ 27.001-011.  The Act allows a party to file a motion to dismiss the case, with an award of attorney fees and costs to the movant if successful on the motion.

This procedure is available to any party, regardless of whether it is an individual or entity and regardless of whether the suit is against the person for an act committed in his or her individual capacity or in his or her capacity as a member of the electronic or print media.  There are, however, four exemptions. Commercial speech falls outside the TCPA.  Suits for bodily injury, wrongful death, or survival also fall outside of the TCPA, as do insurance code suits or actions arising out of insurance contracts.   Enforcement actions by the state also do not fall within the TCPA.  See Tex. Civ. Prac. & Rem. Code § 27.010(a)-(d).

The Act also provides pretrial appellate procedural checks against suspected SLAPP suits.  If the party alleging a First Amendment right violation is unsuccessful in his motion to dismiss, that party may take an automatic, accelerated interlocutory appeal on the trial court’s denial of the motion to dismiss.  See Tex. Civ. Prac. & Rem. Code §§ 27.008, 51.014(a)(12).  Again, this appellate procedure is available to any party asserting a violation of his right to free speech, association, or to petition government.

The Texas Civil Practice and Remedies Code provides an additional appellate procedure to members “of the electronic or print media, acting in such capacity, or a person whose communication appears in or is published by the electronic or print media.”  Tex. Civ. Prac. & Rem. Code § 51.014(a)(6).  If a party falls into this select category, that party may take an automatic, accelerated interlocutory appeal on a trial court’s denial of a motion for summary judgment based on a claim or defense arising under the free speech or press clause of the First Amendment.  Id.

Speaker Favoritism in Texas’ Anti-SLAPP Appellate Procedure

The significance of this additional appellate procedure for members of the electronic or print media, and for a person whose article appears in electronic or print media, is that this select group gets two bites at the appellate apple by way of an automatic interlocutory appeal.  If, for example, a person is sued for defamation for his op-ed piece published online, he may file a motion to dismiss and subsequently appeal the trial court’s denial without first seeking permission to take the issue on interlocutory appeal.  Even if he loses the first interlocutory appeal, he may then file a motion for summary judgment and subsequently appeal the trial court’s denial again without seeking permission to take the issue on interlocutory appeal.

Parties who do not fall within this select group get one-shot at an automatic, accelerated interlocutory appeal.  Though TCPR section 51.014(a)(6) aims to keep free speech channels open, it only does so for a select group of speakers.  All other speakers are directly excluded.  So this raises the question, is section 51.014(a)(6) an example of unconstitutional speaker-based discrimination?

The United States Supreme Court has held that it is “axiomatic that the government may not regulate speech based on its substantive content or the message it conveys.” Rosenberger v. Rector & Visitors of the Univ. of Va., 515 U.S. 819, 829 (1995).  Following this precept, government “may not favor one speaker over another.”  Id.  Government action that discriminates against speech based on its message is presumed unconstitutional.  Id.  Viewpoint discrimination, however, is a more egregious form of content discrimination:  “When the government targets not subject matter, but particular views [or ideology, opinion, or perspective] taken by speakers on a subject, the violation of the First Amendment is all the more blatant.”  Id.; see also R. A. V. v. St. Paul, 505 U.S. 377, 391 (1992).

So far, lower courts have only obliquely grazed this issue.  In Main v. Royall, for example, the Dallas Court of Appeals had to decide whether book authors and publishers fell within section 51.014(a)(6)’s scope, i.e., whether they could be construed as members of the electronic or print media.  348 S.W.3d 381 (Tex. App.–Dallas 2011, no pet.).  The court focused on the legislative purpose driving section 51.014(a)(6)—“to provide members of the media with a mechanism to obtain immediate appellate review . . . of issues arising under the free speech and free press clause [to] avoid[] the time and expense of a trial when the defendant may be entitled to a constitutional or statutory privilege precluding liability”— and held that book authors and publishers comfortably fit into the forms of media protected by the statute.  Id. at 386-87.

The court dismissed the plaintiff’s argument that applying the statute to book authors would require future courts to apply the statute to anyone “with a computer, typewriter, or printer” and exclude only those persons writing by pen and pencil.  Id.  This latter issue was one the court did not have to decide to dispose of the matter.  Id.  But it is an issue that the courts must, at some point, confront.

A right

Perhaps a court may construe section 51.014(a)(6) to apply to any person writing by way of computer, or typewriter, and, perhaps a court may construe the statute to reach people writing with a pen or pencil.  The statute clearly excludes oral communications made outside of the presence of cameras, computers, or other media.  The statute would also likely not apply to any communication between persons by way of text message.

Selective procedural protection under section 51.014(a)(6) raises three related problems: First, affording media personnel and outlets additional First Amendment protection over ordinary citizens raises the specter of favored viewpoints, which is odious to the First Amendment.  Perhaps more people value an opinion piece published on CNN.com over a competing opinion posted on a neighbor’s personal blog. The value in securing an equal opportunity for your neighbor publicly to voice his opinions and concerns lies in part in the act itself, an act of civic engagement; and in part on the content itself, which promotes the search for truth and contributes to the market place of ideas; and, finally, in part on its secondary function, as a means through which ordinary citizens can improve journalistic rigor—an often neglected value in the age of “fake news”—and political governance.

Second, and related to the importance of civic engagement, affording “media” outlets and personnel greater First Amendment protection than ordinary citizens adds to civil discord and distrust.  Even before, but far more after the Supreme Court decided Citizens United v. Federal Election Commission, there has been public clamor over corporate influence in government and money-backed interests potentially undermining our democratic processes.  That The Dallas Morning News is part of the press and, thereby, explicitly protected by the First Amendment should not veil the fact that The Dallas Morning News is a for-profit corporate body, owned by A.H. Belo Corporation.  And, tellingly, section 51.014(a)(6) was enacted to afford extra First Amendment protection to media outlets eighteen (18) years before similar, though not the same, protection was afforded to every other person in section 27.  Freedom of the press, freedom of speech, and the right to petition the government are inseparable rights, entitled to equal constitutional protection, not one greater than the other.  See McDonald v. Smith, 472 U.S. 479, 482-485 (1985).

Third, and related to the second, section 51.014(a)(6) provides less protection to the people who often need the most protection from baseless suits designed to silence them.  It was not lost on the legislature when it passed section 51.014 that litigation costs alone are speech prohibitive.  See House research Org., Bill Analysis, Tex. S.B. 76, 73rd Leg., R.S. (41) (stating that the purpose of the section is “to allow a newspaper, radio station or television station that was sued for libel to make an immediate appeal of a judge’s refusal to grant a summary judgment” so that an appellate court may “sort out unmeritorious libel cases before a case enters the time-consuming and expensive trial phase.”).  Although section 27.003 affords every person similar protection to section 51.014(a)(6), only media parties have the option to allow the sixty-day deadline to file a motion to dismiss to pass and, instead, opt into some discovery to file an informed summary judgment motion, leveraging an automatic and accelerated appeal against both the non-movant and the trial judge.   If an ordinary citizen loses on a section 27 motion to dismiss and loses on an automatic interlocutory appeal, he must bear the cost of further litigation, all the way to trial if he does not settle or win on summary judgment.

Conclusion

Texas’ Anti-SLAPP scheme provides a necessary check against indirect government impositions to free speech, a free press, and the right to petition the government.  Though its direct statutory measures in section 27 afford equal constitutional protection to all parties whose First Amendment rights are threatened by a SLAPP suit, its direct statutory measure in section 51.014(a)(6) favors media speakers over ordinary speakers.  Implied in the right to speak is the recipient’s right to listen, a right to receive information; likewise, implied in the right to publish is a right to collect information.  See Richmond Newspapers v. Va., 448 U.S. 555, 599 n.15 (1980) (Stewart, J., concurring).  When government decides who may speak, it also decides what one may hear; when government decides who may publish and by what means, it also decides what information one may collect to inform his or her understanding of this limited life he or she has.  The right to freedom of speech is a very fragile right; one must be on guard to detect subtle impositions to it—indeed, an imposition may sometimes come in the guise of protecting the very right it diminishes.

Tortious Interference with Inheritance Rights

The question of whether Texas recognizes a cause of action for tortious interference with inheritance rights will go before the Texas Supreme Court in February.  The Court granted the petition in a case from the Amarillo Court of Appeals on December 23, 2016.  Justice Quinn wrote the majority opinion in Jackson Walker, LLP v. Kinsel, No. 07-13-00130-CV, 2015 WL 2085220 (Tex. App.—Amarillo Apr. 10, 2015, pet. granted), a case transferred from the Fort Worth Court of Appeals.  In the Supreme Court, the case is styled Kinsel v. Lindsey, no. 15-0403.

Justice Quinn wrote that neither Amarillo nor Fort Worth have recognized the cause of action, which is described in § 774B of the Restatement (Second) of Torts and, “it is not for intermediate courts to create new causes of action.”  A dissent authored by Justice Pirtle cited cases from 12 courts of appeals that have at least mentioned the cause of action.  The dissent also stated that six intermediate appellate court cases, including two from Amarillo, had recognized the cause of action and that no court has expressly rejected the cause of action.  Disagreeing with the dissent, the majority opinion stated that no Texas appellate court had recognized the cause of action.

Almost a year after the Walker opinion, the Austin court of appeals did expressly reject the cause of action.  Archer v. Anderson, 490 S.W.3d 175 (Tex. App.—Austin 2016, pet. filed), reversed a $2.5 million judgment.  A petition is pending in this case (no. 16-0256).  Full briefing was completed in late December.  It is likely the Supreme Court will grant that petition and hear the cases together.

Whether one can even have inheritance “rights” is an issue.  The Archer opinion notes that a prospective beneficiary’s interest in receiving an inheritance is merely an “expectancy or hope.”  However, most of the other opinions have not focused on that issue.  The cases usually arise from a situation in which a decedent had a prior will specifically dividing property among individuals and changed it to exclude or dilute those individuals’ interests, allegedly because of interference by one or more of the individuals who ended up with a much greater share of the estate under the new will.

This issue has been percolating over the last two decades and is ready for Supreme Court analysis.  Stay tuned.

Jackson Walker, LLP v. Kinsel, No. 07-13-00130-CV

Anderson v. Archer, No. 03-13-00790-CV

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Using Texas’ Anti-SLAPP Statute to Combat SSAPP (Strategic Sanctions Against Public Participation)

Texas, like many other states, enacted legislation to curb meritless lawsuits whose purpose lies solely in chilling a person’s right to free speech and/or to petition his or her government.  Under Texas’ Anti-SLAPP (Strategic Litigation Against Public Participation) law, a party may file a motion to dismiss a legal action which is “based on, relates to, or is in response to [his or her] exercise of the right of free speech, right to petition, or right of association.” Tex. Civ. Prac. & Rem. Code § 27.003(a).   The statute is designed to protect every person’s right to exercise his or her First Amendment communicative rights and does so by nipping SLAPP suits in the bud (at earliest stage of litigation) and by awarding to the party whose speech rights have been burdened by meritless litigation court costs, attorney fees, and other expenses incurred in defense of the meritless suit.  See Tex. Civ. Prac. & Rem. Code §§ 27.002, 27.009.

A growing tactic by defendants, which includes counter-defendants and cross-defendants, is to include in an answer to a lawsuit, counterclaim, or cross-claim, a counter-claim against the plaintiff, counter-plaintiff, or cross-plaintiff for attorney fees and other damages pursuant to Texas Civil Practice & Remedies Code Chapter 10 and Texas Rule of Civil Procedure 13.   Chapter 10 authorize a court to sanction a party for filing a pleading or motion for an improper purpose or for filing a pleading or motion which lacks factual or legal support.  Rule 13 authorizes sanctions against a party who, in bad faith or for the purpose of harassment, files any groundless document with the court.

Notably, a defendant’s Answer is likely not the proper place to request sanctions against another party; this is especially true with respect to Rule 13 sanctions, which must be requested by motion. See Tex. R. Civ. P. 13.  But, often the defendant does not immediately secure a hearing on the requested sanctions.  Rather, the defendant simply sits on the request for sanctions, most likely as “leverage” toward some early resolution (settlement or dismissal), or in hopes that discovery will yield some evidence of bad faith or groundlessness to later support sanctions.

This strategic use of sanctions threatens to chill a person’s right to petition his or her government, and it certainly serves as an imposition to that same right.  So, the question arises, can the Anti-SLAPP statute be used as an Anti-SSAPP (Strategic Sanction Against Public Participation) measure?  The answer may be yes.

Whenever the Chapter 10 or Rule 13 sanction is predicated on a petition or other pleading which requests legal or equitable relief, the right of the petitioner to petition his or her government is implicated.  The Act defines “exercise of the right to petition” as “a communication in or pertaining to . . . a judicial proceeding.”  Tex. Civ. Prac. & Rem. Code § 27.001(4)(A)(i).  Since both Chapter 10 and Rule 13 arise in the context of filings in a judicial proceeding, their use falls within the Act’s definition of the exercise of the right to petition.

The Act defines “legal action” as “a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal or equitable relief.” Tex. Civ. Prac. & Rem. Code § 27.001(6).  Insofar as Chapter 10 or Rule 13 sanctions are asserted via a pleading or motion, they would qualify under the first part of this definition. But the requested sanctions under Chapter 10 or Rule 13 must also constitute a form of legal or equitable relief in order to fall under Chapter 27.  The defendant requests for attorney fees, court costs and related expenses as the appropriate sanction, is a request for legal relief.

Obviously, Chapter 10 and Rule 13 would not qualify as quintessential money damages, which fall under legal relief.  These sanctions are imposed because of the abuse of the procedural rules or injury to legal processes.  Chapter 10 and Rule 13 allow the court to sanction a party for abusing his or her right to petition, for using his or her government as a means to harm or harass a fellow citizen. These sanctions are not imposed primarily to rectify a wrong done to any other party.

However, Chapter 27 is not limited to “quintessential damages” or “quintessential claims.”  Chapter 27 has a broad purpose which would reach SSAPP practices: “to encourage and safeguard the constitutional rights of persons to petition . . . and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury.”  Tex. Civ. Prac. & Rem. Code § 27.002.

Of course, one may always, as a form of relief, move for Chapter 10 or Rule 13 sanctions in response to another’s request for Chapter 10 or Rule 13 sanctions.  Unlike Chapter 10 and Rule 13, though, it is mandatory for the court to award court costs, attorney fees, and other expenses to a successful movant under Chapter 27, and the court may order sanctions against the party employing SSAPP to deter similar future conduct.  See Tex. Civ. Prac. & Rem. Code § 27.009(a)(1)-(2).  In this manner, Chapter 27 provides a greater remedy than Chapter 10 or Rule 13 to a party exercising her right to petition her government, when she is faced with a challenge to that right via legal procedural rules.

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Fort Worth Court of Appeals Considers Parental Rights of Sperm Donor

In our post-Obergefell world, it is expected that the courts will be grappling with a variety of same-sex family law issues.  One group of such issues relates to artificial reproductive technology (“ART”), medical technology used to achieve pregnancy using techniques such as surrogacy, sperm donorship, and in vitro fertilization.

In In re P.S., No. 02-16-0008-CV, 2016 Tex. App. LEXIS 11657 (Tex. App.—Ft. Worth Oct. 27, 2016, no pet. h.). the Fort Worth Court of Appeals was asked to consider the parental rights of a man who donated sperm to a woman who wanted to raise the child with her same-sex partner.

In P.S., mother and father were friends.  Mother, who is gay, wanted to have a child, so she asked father to donate sperm.  Father collected his sperm and gave it to mother, who inseminated herself and conceived a child.  When the child was born, father signed an acknowledgement of paternity and the child’s birth certificate.

After the child was born, father lost contact with mother for a short period of time.  Mother then married her girlfriend, rescinded the acknowledgment of paternity that father had signed, and asked father to relinquish his parental rights to the child.  Father sought assistance from the Office of the Attorney General (“OAG”) because he wanted to be able to have possession of the child.

The trial court signed an order establishing the parent-child relationship between the child and father, appointed father and mother joint managing conservators, ordered father to pay child support, and set up a possession schedule for father.  Mother appealed, arguing, in pertinent part, that father should not be considered a parent because he was simply a “donor” because the Texas Family Code provides that a “donor” is not a parent of a child conceived by assisted reproduction.

The Fort Worth Court of Appeals analyzed the pertinent provisions of the Texas Family Code.  The court found that, while the Family Code does state that a “donor” is not a parent of a child conceived by means of assistive reproduction, a “donor” is defined as “an individual who provides…sperm to a licensed physician to be used for assistive reproduction.  Because father provided his sperm directly to mother and not through a licensed physician, he did not meet the statutory definition of “donor.”  Therefore, the Family Code did not prohibit him from being named as a parent.  The court of appeals affirmed the trial court.

In re P.S., No. 02-16-0008-CV, 2016 Tex. App. LEXIS 11657 (Tex. App.—Ft. Worth Oct. 27, 2016, no pet. h.)

The Interplay Between Federal Rule 56 and Daubert

The Fifth Circuit Court of Appeals’ opinion in Operaciones Tecnicas Marinas, SAS v. Diversified Marine Services, LLC illustrates the interplay between the requirements of Federal Rule of Civil Procedure 56—the summary judgment rule—and the requirements of Daubert case law that an expert adequately exclude alternative causes.

Diversified Marine Services, LLC (Diversified) was called upon to repair the engines of two vessels owned by Operaciones Tecnicas Marinas, SAS (OTM).  While the scope of the oral contract was disputed, the parties acknowledged that the initial repair estimate of $100,000-$120,000 ultimately cost OTM $345,000.  The boats were picked up and put to sea.  Four hours later the crews were forced to shut off the malfunctioning center engines.  The boats had to be towed to Columbia.

OTM filed its action alleging breach of contract, negligence and breach of warranty.  In the trial court, Diversified filed a motion for summary judgment under Rule 56, and in response OTM offered the testimony of its expert that the condition of the engines upon inspection in Cartegena was inconsistent with engines that had been recently rebuild or overhauled.  OTM concedes it had not attempted to prove the “precise cause” of the engines’ malfunction; instead it maintained that it presented sufficient evidence to create a dispute of a material fact.  The district court nevertheless granted Diversified’s motion for summary judgment.

On appeal, the Fifth Circuit reversed, holding that all OTM had to show at the summary judgment stage of the litigation is that there was a dispute of a material fact.   Because OTM’s expert saw no evidence of engine overhauls, a material fact was in dispute.  The Court thus vacated the judgment and remanded the case back to the district court for further proceedings.

Operaciones Technicas Marinas, SAS v.Diversified Marine Services, LLC, No. 15-30932 (5th Cir., Aug. 5, 2016, unpublished).

The Intersection of the Anonymous Right to Free Speech, the Texas Citizens Participation Act, and Rule 202 Pre-Suit Discovery

The Austin Court of Appeals recently considered how the Texas Citizens Participation Act (TCPA) applies to a Rule 202 petition for pre-suit discovery in a case involving anonymous online speech.  The TCPA requires a court to dismiss a legal action when a movant shows the action relates to the movant’s exercise of free speech rights.  Rule 202 of the Texas Rules of Civil Procedure permits a person to petition a court for an order authorizing depositions before a suit is filed in order to investigate a potential claim or suit.  The Austin appellate court was called upon to answer the question of how these two requirements coexist.

In In re Chris Elliott, No. 03-16-00231-CV (Tex. App—Austin Oct. 7, 2016), PumpStopper.com, which is registered to Chris Elliott, published an article reporting negatively about MagneGas, a Delaware technology company.  MagneGas filed a Rule 202 Petition and a Motion to Compel Elliott’s deposition to investigate a potential claim against “the authors, publishers, and distributors” of The Pump Stopper, who MagneGas alleged made false and misleading claims about the company.

John Doe 1 (“Doe”), who identified himself as an author, publisher and/or distributor who utilizes the website, filed a TCPA motion to dismiss the Rule 202 petition.  Doe argued the Rule 202 petition related to Doe’s exercise of his right to free speech and the rights of free speech of other potential defendants.

After a brief non-evidentiary hearing, the trial court ordered Elliott’s deposition.  Elliott then filed a writ of mandamus with the Austin Court of Appeals and sought emergency relief.

The court of appeals concluded that Doe’s TCPA motion to dismiss was sufficient to invoke the TCPA and to stay discovery.  The court held that the TCPA’s definition of “legal action” is broad and encompasses a Rule 202 petition, as it includes “a lawsuit, cause of action, petition, complaint, cross-claim, or counterclaim or any other judicial pleading or filing that requests legal or equitable relief.  The court noted that the TCPA’s language specifically states that although the court may allow specified and limited discovery relevant to the TCPA motion to dismiss on a showing of good cause, otherwise all discovery is suspended until the court has ruled on the motion to dismiss.  Because the district court’s order allowing Elliott’s deposition was not the specified and limited discovery contemplated by the TCPA, the appellate court held that the district court had abused its discretion by permitting the deposition before ruling on Doe’s TCPA motion to dismiss.

In re Chris Elliott, No. 03-16-00231-CV (Tex. App.–Austin Oct. 7, 2016).

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