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

The Dallas Court of Appeals has, once again, confirmed that "strict compliance" with rules governing service of process is required.  See my prior posts on the subject here and here.  In this case, the district clerk served an out-of-state defendant via certified mail, return receipt requested.  But while the return of service bore the district clerk's stamp, it was not verified.  The issue revolves around a key difference between Texas Rules of Civil Procedure 107 and 108.  Rule 107 does not require verification by an officer of the court as opposed to an "authorized person."  But in addressing service on out-of-state defendants, Rule 108 makes no such distinction.  It simply requires that the return be sworn to by the person serving the citation.  Agreeing with an earlier decision by the Eastland Court of Appeals, the court held that Rule 108 requires all returns be signed and sworn by the person making service stating "[t]here are no exceptions for or special provisions for officers."  Accordingly, the court of appeals reversed the default judgment because the return did not strictly comply with the rules governing service.  The court's opinion in Kostechko v. Mazaheri can be found at this link.

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The Fifth Circuit Court of Appeals has held that when it becomes necessary to secure out-of-district counsel to adequately represent a civil rights plaintiff, the prevailing rates charged by that firm are the starting point for the lodestar calculation for an award of attorney's fees.  This ruling is an exception to the usual rule that attorney's fees will be judged by the prevailing rate in the jurisdiction where the court is located.

McClain v. Lufkin Industries Inc. is a Title VII class action employment discrimination case.  The Plaintiffs presented unrebutted evidence that it was necessary for them to retain counsel outside of the Eastern District of Texas--the location of the suit.  No other counsel was present in the location with the resources to handle the size and nature of the lawsuit; accordingly, local counsel for the plaintiffs retained a California law firm to help with the case.   The district court rejected consideration of the California firm's $650 hourly rate, which was the prevailing rate in the San Francisco Bay Area, and awarded $400 per hour for the partners at the California firm.

The Fifth Circuit noted the consistent precedent from that circuit that the "prevailing rate in the community" refers to the community where the district court is located.  The court also observd that other circuit courts have allowed out-of-district counsel to recover fees at rates in their home districts under limited circumstances.  Based upon the unrebutted evidence, the Fifth Circuit held that the district court "clearly erred" in finding that local attorneys were available to assist in the representation of the plaintiffs, and the court held that the attorneys could recover fees using the rates in their home district because they had proven that there was no counsel available locally to assist the plaintiffs.  The court's opinion may be found here. 

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The Dallas Court of Appeals recently held that a jury verdict of 11-1 on negligence bars recovery of exemplary damages based on gross negligence.  In this case, the jury returned a verdict against the defendant for negligence by a vote of 11 to 1.  Ignoring the predicate instruction to only answer the gross negligence question on an unanimous finding of negligence, the jury returned a verdict for gross negligence against the defendant by a vote of 12 to 0 and awarded $2.5 million in exemplary damages.  The trial court refused to award judgment for exemplary damages.  On appeal, the court of appeals confirmed what seems logical, but is not exactly clear from the applicable statute. 

Section 41.003(d) of the Texas Civil Practice and Remedies Code requires that the jury be unanimous in its finding on liabilty for, and amount of, exemplary damages.  The statute is slient as to liability for actual damages.  Texas Rule of Civil Procedure 226a requires an unanimous finding on liability, liability for exemplary damages, and the amount of exemplary damages.  Rejecting the argument that the rule and statute conflict, the court stated that "it is logical to conclude that the Legislature intended the unanimity requirement to apply to all of the elements necessary to establish a right to recover punitive damages."  Because the jury did not unanimously find negligence against the defendant, the court affirmed the trial court's refusal to award exemplary damages.  The court's decision in Kia Motors Corp. v. Ruiz can be found at this link. 

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A federal court of appeals does not have jurisdiction over an appeal from a magistrate judge's order of dismissal unless the parties have clearly and unambiguously consented to proceed before the magistrate judge. 

In Barber v. Shinseki, the plaintiff brought a healthcare liability claim.  After the plaintiff's counsel withdrew, he asked the district court to appoint new counsel for him.  The district court referred the issue to a magistrate judge, who subsequently denied the request and gave the plaintiff additional time to locate substitute counsel.  When the plaintiff did not find new counsel, the magistrate judge entered an electronic order dismissing for failure to prosecute.  The plaintiff appealed. 

The Fifth Circuit Court of Appeals held that a magistrate judge's order is not final unless the parties have consented to proceed before the magistrate.  Since there was no evidence of that consent and since there was no district court order dismissing, the court of appeals dismissed the appeal due to the lack of a final judgment.  The court also noted that the district court "has an obligation to issue a written, paper order when it disposes of a case."  The magistrate judge's electronic order violated Federal Rule 58's requirement that "every judgment shall be set forth on a separate document."  The court's opinion may be found here.

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