The Texas Supreme Court recently weighed in again on the enforceability of non-compete agreements under Texas law.  Specifically, the Court held that an employer need not expressly promise to provide confidential information to an employee in return for a promise not to disclose the information.  Instead, the Court held that an employer impliedly promises to provide confidential information "when the nature of the work the employee is hired to perform requires confidential information to be provided for the work to be performed by the employee…"  Because the non-compete was ancillary to the parties’ otherwise enforceable agreement regarding confidential information, the non-compete was enforceable.  The Court’s opinion in Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding can be found at this link.

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.
 

Continue Reading Texas Open Meetings Act vs. the First Amendment Rights of Elected Officials

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.

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. 

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.

 

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.

Continue Reading Open Records Act and its Application to E-mail

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. 

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.

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).

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.

 

Continue Reading District Court Jurisdiction: Split of Authority