Reverse and Render : Texas Appellate Lawyer & Attorney : Cowles & Thompson Law Firm : Court of Appeals, Texas Supreme Court

This entry comes to us courtesy of Sim Israeloff.

Many elected officials in Texas, including most who are elected to city councils and school boards, serve as citizen volunteers without pay.  Newly elected officials are sometimes surprised to find that their actions and speech are now restricted by statutes such as the Texas Open Meetings Act (TOMA). The Fifth Circuit Court of Appeals has now weighed in on whether elected officials carrying out their official duties retain the same First Amendment protections on speech as private citizens.
 

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The Dallas Court of Appeals has added another opinion to the stack of authority recognizing and applying the corporate fiduciary shield doctrine.  In Nichols v. Lin, Nichols brought suit for breach of contract against Tseng Lin, YJ USA, and others.  Nichols sought to hold Lin responsible for the breach on a theory of alter ego.  Lin filed a special appearance, which the trial court sustained.

In an interlocutory appeal, Nichols complained that the trial court abused its discretion in excluding evidence relating to his alter ego allegation.  He also argued that the special appearance should have been denied. 

In its review of the excluded evidence, the court of appeals concluded that there was no abuse of discretion because the evidence was not relevant to Nichols' argument that Lin was an alter ego.  As to the application of the fiduciary shield doctrine, the court observes that this doctrine protects a nonresident corporate officer or employee from a trial court's exercise of general jurisdiction over the individual when all of his contacts with Texas were made on behalf of his employer.  Here, the evidence demonstrated that Lin's contacts with Texas were all made on behalf of his corporate employer.  The court of appeals observes that proof the individual was an alter ego will defeat application of the fiduciary shield doctrine.   However, in this case, Nichols' citations to the record failed to support his written contentions with respect to alter ego.  Therefore, the court of appeals affirmed the trial court's order.  The opinion may be found at this link.

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After the Texas Supreme Court adopted appellate rules eliminating the old publish/unpublish designations, the debate I heard from some members of the judiciary and practitioners was "how short can a Memorandum Opinion be?"   The Dallas Court of Appeals' Memorandum Opinion in In re Gullatt, appears to test the limits on brevity. 

Appellate Rule 47.1 requires that a court of appeals hand down a written opinion.  It further requires that the opinion must be "as brief as practicable" but it must "address every issue raised and necessary to final disposition."  Rule 47.4 allows the writing of a brief memorandum opinion "no longer than necessary to advise the parties of the court's decision and the basic reasons for it," but the condition on using a memorandum opinion is that the issues must be settled.

 Gullatt is a mandamus proceeding.  The opinion recites that "Relator contends the trial judge erred in not acting on his Application to Determine Heirship."  It represents that "all dispositive issues are clearly settled in law" and no facts are presented because they are "known to the parties."   And the court grants the petition.  So what's the precise legal issue?   Does a written opinion that gives only a thumbs up or thumbs down address every issue and give the basic reasons for the decision?  From a practitioner's standpoint, I can't tell what this opinion is deciding and what issue the court  declares to be "clearly settled in law."

The court's opinion may be found at this link. 

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Must an appellant who seeks to appeal a trial court's order sustaining a challenge to the appellant's affidavit of indigency file a separate notice of appeal?  Answer:  It depends on which court of appeals the appeal is in.

The San Antonio Court of Appeals has held that it is not necessary for an appellant to file a separate notice of appeal.  However, in Basaldua v. Hadden, the court noted that its holding is at odds with the Corpus Christi Court of Appeals, the Texarkana Court of Appeals, and the Waco Court of Appeals--all of which require the filing of a separate notice of appeal.  The San Antonio Court of Appeals joins Amarillo in concluding that no separate notice of appeal is required.  This conflict in appellate decisions seems ripe for resolution by the Texas Supreme Court.

Although the court of appeals allowed Mr. Basaldua to challenge the order sustaining the challenge to his affidavit of indigency, the court upheld the trial court's order.   Noting that it appeared Mr. Basaldua had the capacity to make more income, the court held that the trial court had not abused its discretion in sustaining the contest to the affidavit of indigence.  The court's opinion may be found at this link.

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The more time you spend studying City of Dallas v. Dallas Morning News, the more I.Q. points you lose.  This case may be more important for what it doesn't answer than for what you hope it will answer. 

The primary issue in this appeal is whether e-mails that are sent to and from private e-mail addresses of the Mayor and other city officials and which involve matters of official public business, are public information and subject to the Texas Open Records Act.

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All those "whereas" clauses in congressional resolutions amount to nothing, according to the U.S. Supreme Court. 

In 1993, the U.S. Congress passed a joint resolution expressing its deep regret to native Hawaiians insofar as the United States' overthrow of the Kingdom of Hawaii.  Contained within the resolution was an apology to the Hawaiian people, which acknowledged that the Hawaiian people never directly relinquished their claims to their national lands to the United States.  Apparently, no good deed goes unpunished.

In reliance on the resolution, the Office of Hawaiian Affairs (OHA) laid claim upon certain property so as to preserve any native Hawaiian claims to ownership of the property.   The U.S. Supreme Court rejected OHA's claims, holding that nothing in the joint resolution showed an intent to create substantive rights.   The court reasoned that "whereas" clauses in legislation have no operative effect, and that the "whereas" clause in question demonstrated no intent to amend or repeal prior law.  As to other state-law arguments made by OHA, the court held that it had not authority to decide those questions or provide redress for them.

The court's opinion in Hawaii v. Office of Hawaiian Affairs, may be found at this link. 

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On Friday, April 17th and Saturday, April 18th, the Texas Supreme Court Rules Advisory Committee will be meeting to discuss proposed changes to the Texas Rules of Procedure.  Among the proposed changes are changes that will permit electronic filings in the appellate courts.

For more information on the location and time of the meeting, click on this link.

For more information on the agenda and proposed text of the amendments, click on this link.

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The United States Court of Appeals for the Fifth Circuit has reiterated the pleading standards applicable in federal court for securities fraud and for common-law fraud in Flaherty & Crimrine Preferred Income Fund Inc. v. TXU Corp.

Federal Rule of Civil Procedure 9(b) requires a pleader to state with particularity the circumstances constituting fraud or mistake.  The Fifth Circuit strictly interprets this requirement, and demands that a plaintiff specify (1) the statements alleged to be fraudulent, (2) the speaker, (3) when the statement was made, (4) where the statement was made, and (5) why the statement was fraudulent.  In Flaherty, the court reminds us that a plaintiff cannot satisfy the pleading requirements with global or group allegations such as "all defendants" made the fraudulent statement.  Flaherty further appears to impose a requirement of delineating whether the statement alleged is an affirmative misrepresentation or an omission.  Flaherty also discusses the type of evidence necessary to plead intent in a securities fraud case, which is a higher standard than common law fraud, but still subject to Rule 9(b).

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The Beaumont Court of Appeals has held that the minimum amount in controversy necessary to invoke a district court's jurisdiction is $201.00.

In Acreman v. Sharp, the trial court dismissed Plaintiff Acreman's claims against an employee of the Texas Department of Criminal Justice because Acreman's petition asserted that the value of the property he was complaining of was $400.00.  The trial court concluded that the minimum amount in controversy to invoke a district court's jurisdiction must exceed $500.00.  Acreman appealed.

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The Beaumont Court of Appeals has held that a contractual waiver of jury clause does not extend to non-contractual claims brought against non-signatory joint tortfeasors or alleged conspirators.

In In re Wild Oats Markets, Inc., Kuykendahl-WP Retail, L.L.P. ("Kuykendahl") had a lease agreement with Wild Oats Markets, Inc., which contained a contractual waiver-of-jury-trial clause.  Kuykendahl brought suit against Wild Oats for breach of the agreement.  Kuykendahl also sued Whole Foods Market, Inc. for tortious interference with the lease and for engaging in a conspiracy with Wild Oats to commit fraud.

The trial court struck Kuykendahl's jury demand with respect to its claims against Wild Oats, but set Kuykendahl's claims against Whole Foods for a jury trial.  Wild Oats sought mandamus relief, asserting that the contractual waiver necessarily included Kuykendahl's claims against Whole Foods.  Noting that Wild Oats had not shown that Kuykendahl had waived its right to a jury trial on its tortious interference claim against Whole Foods (for conduct occurring prior to Whole Foods' merger with Wild Oats), the court of appeals denied Wild Oats' petition for writ of mandamus.   From the court's opinion, it is unclear how the trial court intended to try claims for fraud and conspiracy when part of them were to be tried to a jury and part were to be tried to the bench.  The court's opinion may be found at this link.

Update: Wilds Oats and Whole Foods (which was not a relator in the court of appeals) have now filed a petition for writ of mandamus in the supreme court. See Case No. 09-0278.  The supreme court has called for a response.

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The United States Court of Appeals for the Fifth Circuit recently held that the United States Supreme Court's decision in Hall Street Associates v. Mattel  "restricts the grounds for vacatur" of an arbitration award and, thus, "manifest disregard for the law is no longer an indepdendent ground for vacating arbitration awards under the FAA."  Consequently, the only  bases for setting aside an arbitration award are (1) fraud or corruption in obtaining the award; (2) evident partiality by the arbitrator; (3) misconduct or misbehavior by the arbitrator; and (4) where the arbitrator exceeded its power.  See 9 U.S.C. sec. 10(a). 

In reaching its conclusion, the Fifth Circuit disagreed with decisions from the Sixth, Second, and Ninth Circuits holding that "manifest disregard" survived the Supreme Court's decision in Hall.  The Fifth Circuit noted the Supreme Court's "repeated statements [in Hall] that: 'We hold that the statutory grounds are exclusive.' "  As a result, the Fifth Circuit held that "manifest disregard of the law as an independent, nonstatutory ground for setting aside an award, must be abandoned and rejected."  The Court also expressly overruled any precedent to the contrary.  The Fifth Circuit's opinion in Citigroup Global Markets, Inc. v. Bacon is availble at this link.  

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This week the federal Fifth Circuit Court of Appeals issued an opinion in connection with a Petition for Leave to Appeal solely to remind district judges (and presumably practitioners) to demonstrate that the standards governing interlocutory appeals under 28 U.S.C. Section 1292(b) have been met.

Section 1292(b) requires that a district court should state when it believes there is a question of controlling law in a case upon which there is a substantial ground for difference of opinion and upon which an immediate appeal would materially advance the resolution of the litigation.  In Linton v. Shell Oil Co., the district court denied Shell's motion for summary judgment and certified "the issues raised in the Motion for Summary Judgment" to the Fifth Circuit.  The Fifth Circuit noted that orders are certified, not issues; however, the court noted that it is helpful if the district court frames the controlling question.  The district court should also elaborate on why the question presented in the order is a controlling question and why there is a substantial ground for difference of opinion.

Of course, practitioners should be mindful of these requirements as well so that they can assist district courts in rendering orders in conformity with these instructions.  The Fifth Circuit's opinion may be found at this link.

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