SUPREME COURT UPDATE

HONORABLE NATHAN L. HECHT, Austin Justice, Supreme Court of Texas

State Bar of Texas rd 33 ANNUAL ADVANCED REAL ESTATE LAW July 7-9, 2011 San Antonio

CHAPTER 3

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SUPREME COURT UPDATE ______

Phil Johnson Justice Supreme Court of Texas

Heather Holmes Staff Attorney

Robert Brailas Staff Attorney

John Beck Law Clerk

Sara Berkeley Law Clerk

George Padis Intern

Georgie Gonzales Executive Assistant

Special thanks to all the Staff Attorneys and Law Clerks at the Supreme Court of Texas for their substantial contributions.

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February 1, 2011 – April 30, 2011 ______

NATHAN L. HECHT

Justice Nathan L. Hecht is the Senior Justice of the Supreme Court of Texas, having been elected in 1988 and re-elected in 1994, 2000, and 2006. He is the senior Texas appellate judge in active service.

Throughout his service on the Court, Justice Hecht has overseen revisions to the rules of administration, practice, and procedure in Texas courts. In 2000, he was appointed by the Chief Justice of the United States to the Advisory Committee on Civil Rules for the Judicial Conference of the United States, on which he served until 2006.

Justice Hecht began his judicial service in 1981, when he was appointed to the 95th District Court in Dallas County. He was elected to that bench in 1982 and re-elected in 1984. In 1986 he was elected to the Court of Appeals for the Fifth District of Texas at Dallas, where he served until he was elected to the Supreme Court.

Before taking the bench, Nathan Hecht was a partner in the Dallas law firm of Locke Purnell Boren Laney & Neely (now Locke Lord Bissell & Liddell). He joined that firm in 1976 and practiced mainly in the area of general business and commercial litigation.

Justice Hecht received a B.A. degree with honors in philosophy from Yale University in 1971. He attended Southern Methodist University School of Law as a Hatton W. Sumners Scholar, and received his J.D. degree cum laude in 1974. He was elected to Order of the Coif and served as an editor for the Southwestern Law Journal. Following law school, he served as a law clerk to the Hon. Roger Robb, Circuit Judge, U.S. Court of Appeals for the District of Columbia Circuit. He also served in the U.S. Naval Reserve Judge Advocate General Corps, achieving the rank of Lieutenant. He was honorably discharged from military service in 1979.

Justice Hecht is licensed to practice in Texas and the District of Columbia. He is a member of the American Bar Association, the District of Columbia Bar Association, the State Bar of Texas, the Dallas Bar Association, and the Austin Bar Association. He is also a member of the American Law Institute, a fellow in the American Bar Foundation, a life fellow in the Texas Bar Foundation, and a founding fellow of the Dallas Bar Foundation. He received the Outstanding Young Lawyer Award from the Dallas Association of Young Lawyers in 1984, the Southern Methodist University School of Law Distinguished Alumni Award for Judicial Service in 2000, and the Hatton W. Sumners Foundation Distinguished Public Service Award in 2004. He has taught as an Adjunct Professor at the University of Texas School of Law. He is a member of the Texas Philosophical Society.

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TABLE OF CONTENTS

I. SCOPE OF THIS ARTICLE...... 1

II. ADMINISTRATIVE LAW...... 1 A. Driver’s License Suspension...... 1 1. Tex. Dep’t of Pub. Safety v. Caruana, 2010 WL 522783, (Tex. App.—Austin 2010) pet. granted, 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [10-0321]...... 1 B. Judicial Review...... 1 1. Fin. Comm’n of Tex. v. Norwood, 303 S.W.3d 404 (Tex. App.—Austin 2010), pet granted, 54 Tex. Sup. Ct. J. 561 (February 25, 2011) [10-0121]...... 1 2. R.R. Comm’n of Tex. v. Tex. Citizens for a Safe Future & Clean Water, S.W.3d , 54 Tex. Sup. Ct. J. 642 (Tex. March 11, 2011) [08-0497]...... 2 C. Public Utility Commission...... 2 1. State v. Pub. Util. Comm’n, S.W.3d , 54 Tex. Sup. Ct. J. 690 (Tex. March 18, 2011) [08-0421]...... 2

III. ARBITRATION...... 3 A. Appellate Jurisdiction...... 3 1. Ellis v. Schlimmer, S.W.3d , 54 Tex. Sup. Ct. J. 793 (Tex. April 1, 2011) [10- 0243]...... 3 B. Enforcement/Non-Signatories...... 3 1. In re Rubiola, 334 S.W.3d 220 (Tex. March 11, 2011) [09-0309]...... 3

IV. ATTORNEYS...... 4 A. Fees...... 4 1. El Apple I, Ltd. v. Olivas, 324 S.W.3d 181 (Tex. App.—El Paso 2010), pet. granted, 54 Tex. Sup. Ct. J. 561 (February 25, 2011) [10-0490]...... 4 2. Tex. Elec. Util. Constr., Ltd. v. Infrasource Underground Constr. Servs., L.L.C., 2010 WL 2638066 (Tex. App.—Tyler 2010), pet. granted, 54 Tex. Sup. Ct. J. 881 (April 29, 2011) [10-0628]...... 4

V. CONTRACTS...... 5 A. Fraudulent Inducement...... 5 1. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., S.W.3d , 54 Tex. Sup. Ct. J. 822 (Tex. April 15, 2011) [08-0989]...... 5 B. Third-Party Beneficiaries...... 6 1. Basic Capital Mgmt., Inc. v. Dynex Commercial, Inc., S.W.3d , 54 Tex. Sup. Ct. J. 781 (Tex. April 1, 2011) [08-0244]...... 6

VI. DAMAGES...... 6 A. Punitive Damages...... 6 1. Safeshred, Inc. v. Martinez, 310 S.W.3d 649 (Tex. App.—Austin 2010), pet granted, 54 Tex. Sup. Ct. J. 633 (March 11, 2011) [10-0426]...... 6

VII. EMPLOYMENT LAW...... 7 A. Pay Discrimination Claims...... 7 1. Prairie View A&M Univ. v. Chatha, 317 S.W.3d 402 (Tex. App.—Houston [1st Dist.] 2010), pet granted, 54 Tex. Sup. Ct. J. 561 (February 25, 2011) [10-0353]... . . 7

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VIII. EQUINE ACTIVITY ACT...... 7 A. Interpretation and Application...... 7 1. Loftin v. Lee, S.W.3d , 54 Tex. Sup. Ct. J. 895 (Tex. April 29, 2011) [09- 0313]...... 7

IX. EVIDENCE...... 8 A. Lay Opinion Testimony...... 8 1. Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., S.W.3d , 54 Tex. Sup. Ct. J. 658 (Tex. March 11, 2011) [09-0396]...... 8

X. FAMILY LAW...... 9 A. Child Support...... 9 1. Iliff v. Iliff, S.W.3d , 54 Tex. Sup. Ct. J. 843 (Tex. April 15, 2011) [09-0753]... 9

XI. GOVERNMENTAL IMMUNITY...... 9 A. Contract Claims...... 9 1. City of Houston v. Williams, S.W.3d , 54 Tex. Sup. Ct. J. 713 (Tex. March 18, 2011) [09-0770]...... 9

XII. INSURANCE...... 10 A. Policies/Coverage...... 10 1. Burlington N. & Santa Fe Ry. Co. v. Nat’l Union Fire Ins. Co., 334 S.W.3d 217 (Tex. February 25, 2011) [10-0064]...... 10

XIII. JURISDICTION...... 10 A. Subject Matter Jurisdiction...... 10 1. Minton v. Gunn, 301 S.W.3d 702 (Tex. App.—Fort Worth 2009), pet. granted, 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [10-0141]...... 10

XIV. MEDICAL LIABILITY...... 11 A. Expert Reports...... 11 1. Mitchell v. The Methodist Hosp., S.W.3d , 54 Tex. Sup. Ct. J. 669 (Tex. March 11, 2011) [10-0117]...... 11 2. Samlowski v. Wooten, 332 S.W.3d 404 (Tex. February 25, 2011) [08-0667]...... 11 3. Stockton v. Offenbach, S.W.3d , 54 Tex. Sup. Ct. J. 590 (Tex. February 25, 2011) [09-0446]...... 12 B. Health Care Liability Claims...... 12 1. Ghazali v. Brown, 307 S.W.3d 499 (Tex. App.—Fort Worth 2010), pet. granted, 54 Tex. Sup. Ct. J. 537, 538 (February 8, 2011) [10-0232]...... 12 2. Tex. West Oaks Hosp., LP v. Williams, 322 S.W.3d 349 (Tex. App.—Houston [14th Dist.] 2010), pet. granted, 54 Tex. Sup. Ct. J. 750 (April 1, 2011) [10-0603].. 13 3. Turtle Healthcare Grp. v. Linan, S.W.3d , 54 Tex. Sup. Ct. J. 911 (Tex. April 29, 2011) [09-0613]...... 13 4. Wasserman v. Gugel, 2010 WL 1992622 (Tex. App.—Houston [14th Dist.] 2010), pet. granted, 54 Tex. Sup. Ct. J. 750 (Tex. April 1, 2011) [10-0513]...... 14 C. Statute of Limitations...... 15 1. Carreras v. Marroquin, S.W.3d , 54 Tex. Sup. Ct. J. 788 (Tex. April 1, 2011) [09- 0857]...... 15

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XV. PROCEDURE—PRETRIAL...... 15 A. Voir Dire...... 15 1. In re Commitment of Hill, 334 S.W.3d 226 (Tex. March 11, 2011) [10-0280].. . . . 15

XVI. NEGLIGENCE...... 15 A. Premises Liability...... 15 1. Allen Keller Co. v. Foreman, S.W.3d , 54 Tex. Sup. Ct. J. 850 (Tex. April 15, 2011) [09-0955]...... 15

XVII. OIL & GAS...... 16 A. Fraud...... 16 1. Exxon Corp. v. Miesch, S.W.3d , 54 Tex. Sup. Ct. J. 761 (Tex. April 1, 2011) [05- 1076]...... 16 B. Royalty Payments...... 17 1. Tawes v. Barnes, S.W.3d , 54 Tex. Sup. Ct. J. 857 (Tex. April 15, 2011) [10- 0581]...... 17 C. Subsurface Trespass...... 18 1. FPL Farming Ltd. v. Envtl. Processing Sys., L.C., 305 S.W.3d 739 (Tex. App.—Beaumont 2009), pet. granted, 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [09-1010]...... 18

XVIII. PROCEDURE—PRETRIAL...... 19 A. Discovery...... 19 1. In re John Does 1 & 2, S.W.3d , 54 Tex. Sup. Ct. J. 855 (Tex. April 15, 2011) [10- 0366]...... 19 B. Dismissal...... 19 1. Roccaforte v. Jefferson Cnty., S.W.3d , 54 Tex. Sup. Ct. J. 900 (Tex. April 29, 2011) [09-0326]...... 19

XIX. PROCEDURE—TRIAL AND POST-TRIAL...... 20 A. Jury Instructions and Questions...... 20 1. Thota v. Young, 271 S.W.3d 822 (Tex. App. —Fort Worth 2008), pet. granted, 54 Tex. Sup. Ct. J. 682 (March 18, 2011) [09-0079]...... 20 B. New Trial Orders...... 21 1. In re United Scaffolding, Inc., 315 S.W.3d 246 (Tex. App.—Beaumont 2010), argument granted on pet. for writ of mandamus, 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [10-0526]...... 21

XX. REAL PROPERTY...... 21 A. Eminent Domain...... 21 1. City of Austin v. Whittington, 2010 WL 567153 (Tex. App.—Austin 2010), pet. granted, 54 Tex. Sup. Ct. J. 811 (Tex. April 15, 2011) [10-0316]...... 21 2. Tex. Rice Land Partners, Ltd. v. Denbury Green Pipeline-Tex. LLC, 296 S.W.3d 877 (Tex. App.—Beaumont 2009), pet. granted, 54 Tex. Sup. Ct. J. 538 (February 11, 2011) [09-0901]...... 22

XXI. TIM COLE ACT...... 22 A. Concurrent Sentences Restriction...... 22 1. In re Smith, 333 S.W.3d 582 (Tex. March 4, 2011) [10-0048]...... 22

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XXII. WORKERS’ COMPENSATION...... 22 A. Retaliation Claims...... 22 1. Travis Cent. Appraisal Dist. v. Norman, S.W.3d , 54 Tex. Sup. Ct. J. 891 (Tex. April 29, 2011) [09-0100]...... 22

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SUPREME COURT UPDATE ______

Phil Johnson Justice Supreme Court of Texas

I. SCOPE OF THIS ARTICLE admissible as a public record.” 1 TEX. ADMIN. This article surveys cases that were decided CODE § 159.211(c)(2). The Department argues by the Supreme Court of Texas from February 1, that the court of appeals erred in presuming that 2011 through April 30, 2011. Petitions that have this rule is the exclusive means of introducing an been granted but not yet decided are also included. officer’s report. Caruana counters that, where SOAH’s rules specifically provide that a peace II. ADMINISTRATIVE LAW officer’s “sworn report” of relevant information is A. Driver’s License Suspension admissible as a public record, a peace officer’s 1. Tex. Dep’t of Pub. Safety v. Caruana, 2010 WL unsworn report of relevant information cannot 522783, (Tex. App.—Austin 2010) pet. granted, also be admissible. 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [10- The Supreme Court granted the 0321]. Department’s petition for review. Oral argument At issue in this case is whether a rule that has not yet been scheduled. makes admissible an officer’s “sworn report” in a license suspension hearing precludes admission of B. Judicial Review an unsworn report. 1. Fin. Comm’n of Tex. v. Norwood, 303 S.W.3d An officer pulled over Stephen Caruana for 404 (Tex. App.—Austin 2010), pet granted, 54 failing to stop at a red light. After detecting Tex. Sup. Ct. J. 561 (February 25, 2011) [10- alcohol on his breath, and noting that Caruana 0121]. failed to maintain balance during a “walk and turn At issue in this case is whether the court of field sobriety test,” the officer arrested him. appeals applied the proper standard of review Caruana agreed to take a breath test, which when reviewing interpretations of the home equity showed an alcohol concentration above the legal provisions of the Texas Constitution made by the limit. At Caruana’s license suspension hearing, Finance Commission of Texas and the Credit the Department of Public Safety offered as Union Commission of Texas (collectively, the evidence the officer’s report, which was signed Commissions). and notarized, but had not been sworn. The The Texas Constitution authorizes the officer conceded during voir dire that he had Legislature to designate to administrative agencies neglected to perform the oath when signing the the power to issue interpretations of the home report, and Caruana objected to its admission on equity lending provisions. Pursuant to this this ground. The officer testified during the constitutional provision, the Legislature delegated hearing, under oath, that the contents of the report interpretive authority over the home equity were accurate. The administrative law judge provisions to the Commissions, who then overruled Caruana’s objection and admitted the promulgated numerous regulations interpreting report. The judge subsequently suspended the home equity provisions. Valerie, and a Caruana’s license for 90 days. number of other individual homeowners who took The trial court reversed the decision of the out home equity loans in Texas, filed suit against administrative law judge, and the court of appeals the Commissions, seeking to invalidate certain affirmed because the report was not properly regulations they had adopted. sworn. Pursuant to a rule of the State Office of In the trial court, both sides filed motions for Administrative Hearings (SOAH), “[a]n officer’s summary judgment, and the trial court granted sworn report of relevant information shall be each motion in part, invalidating seven of the nine

1 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 challenged regulations. The Commissions permit, finding that it did not have jurisdiction appealed, arguing that the trial court erred in over the traffic-safety issues raised by Texas invalidating four of the regulations, and the Citizens and thus could not consider them. Texas individual homeowners cross-appealed, Citizens then brought suit alleging that the contending that the trial court erred in refusing to Commission abused its discretion by adopting invalidate the remaining two regulations. The such a narrow definition of public interest. The court of appeals held that the proper standard of trial court affirmed the Commission’s order, but review of the Commissions’ interpretations should the court of appeals reversed, holding that the be the same deference given to agency statute’s definition of public interest must be interpretations of statutes. Thus, the court of broader than the effect on oil and gas production appeals held that the Commissions’ interpretations and must include “public-safety concerns where of the home equity provisions should be “entitled evidence of such concerns has been presented.” to serious consideration, so long as the The Court held that the Commission’s construction is reasonable and does not contradict construction of the phrase “public interest” as the plain language” of the Constitution. Applying excluding traffic-safety considerations was this standard, the court of appeals affirmed the reasonable and in accord with the plain language trial court’s judgment in part and reversed and of the statute, and thus was entitled to judicial rendered in part. On appeal to the Supreme Court, deference. The Court concluded the term “public the Commissions argue that the court of appeals interest” is ambiguous and subject to differing should have been more deferential to the interpretations, but that the Commission’s Commissions’ interpretations because their interpretation was reasonable in light of both (1) authority derives from the Texas Constitution. the statutory scheme in Chapter 27 of the Water Both sides argue the validity of the specific Code, and (2) the Commission’s area of expertise interpretations under any standard of review. as the state’s agency charged with the The Court granted the Finance Commission’s administration of the state’s oil and gas—and not and Norwood’s petitions for review. Oral traffic—laws. Further, the Commission’s argument has not yet been scheduled. interpretation was entitled to deference given the Commission’s long-standing construction of the 2. R.R. Comm’n of Tex. v. Tex. Citizens for a statute as not including traffic-safety concerns. Safe Future & Clean Water, S.W.3d , 54 Tex. Accordingly, the Court reversed the court of Sup. Ct. J. 642 (Tex. March 11, 2011) [08-0497]. appeals’ judgment and rendered judgment for the At issue in this case is whether the Railroad Commission and Pioneer in accordance with the Commission’s interpretation of the term “public trial court’s original judgment. interest” under Texas Water Code section Chief Justice Jefferson, joined by Justices 27.051(b)(1) is entitled to judicial deference. Willett and Lehrmann, concurred in the judgment. The Injection Well Act requires entities to Chief Justice Jefferson would have held that, apply for a permit with the Railroad Commission under Chapter 27’s statutory scheme, the term if they wish to operate an injection well to dispose “public interest” unambiguously precludes the of oil and gas waste. The Act charges the Commission from considering traffic-safety Commission with making a variety of findings if factors as a matter of law. Because a court does it decides to grant a permit, including a finding not defer to an agency’s interpretation of an that the well is in the public interest. This case unambiguous statute, judicial deference should arose out of Pioneer Exploration, Ltd.’s not apply. application to convert a gas well into an injection well. At the hearing over the permit, Texas C. Public Utility Commission Citizens for a Safe Future and Clean Water and 1. State v. Pub. Util. Comm’n, S.W.3d , 54 James G. Popp (Texas Citizens) presented a Tex. Sup. Ct. J. 690 (Tex. March 18, 2011) [08- variety of traffic-safety evidence that they argued 0421]. was relevant to the Commission’s required public CenterPoint Energy Houston Electric, LLC interest finding. The Commission issued the and its affiliated power-generation company,

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Texas Genco, LP (collectively CenterPoint), Deceptive Trade Practices Act. Ellis and initiated a true-up proceeding to determine Pacesetter initiated discovery and proceeded with stranded costs and other true-up amounts pursuant the lawsuit until five months before the trial to Chapter 39 of the Utilities Code. Consumer setting, when their lawyers purportedly discovered groups and the State intervened. The Public a mandatory arbitration clause in the Schlimmers’ Utilities Commission (PUC) issued a final order in real estate contract with Ellis. Pacesetter and Ellis the proceeding. CenterPoint and Intervenors then filed a motion to abate and compel challenged various components of the order by arbitration. The Schlimmers claimed waiver and appeal to district court and then to the court of estoppel and argued that the language of the appeals. The Supreme Court granted the petitions agreement did not cover the dispute between the for review. parties. The Supreme Court held that (1) the PUC The trial court denied the motion, and correctly declined to reduce net book value by the Pacesetter and Ellis filed an interlocutory appeal. amount of excess mitigation credits that had been Although the Schlimmers did not contest appellate paid to CenterPoint’s affiliated retail electric jurisdiction, the court of appeals sua sponte provider; (2) under section 39.262(h) of the dismissed the interlocutory appeal for want of Utilities Code, the PUC should have used the sale jurisdiction because the movants failed to of assets methods to determine market value; (3) establish that the Federal Arbitration Act did not the PUC erred in its calculation of the capacity apply. The Supreme Court reversed. The Court auction true-up amount under Section 29.262(d) of noted that a party attempting to compel arbitration the Utilities Code; (4) the PUC erred in making an must first establish the existence of a valid adjustment to stranded costs for what it perceived arbitration agreement. But once the party seeking to be a “double recovery” resulting from the arbitration does so, a strong presumption favoring treatment of depreciation in the years 2002 and arbitration arises, and the burden shifts to the 2003 in the net book value and capacity auction party opposing arbitration to raise an affirmative true-up calculations; (5) the PUC correctly treated defense to the agreement’s enforcement. Because construction work in progress in its net book value appellate review is available under both the Texas calculation; (6) the PUC correctly awarded Arbitration Act and the FAA so long as the TAA carrying costs on the capacity auction true-up is not preempted, the burden was on the amount; and (7) on remand, no adjustment to Schlimmers to show that some Texas state law or market value under the sale of assets methods statutory requirement would prevent enforcement should be made for CenterPoint’s alleged of the arbitration agreement under the TAA so unreasonable business practice in granting an that the FAA would preempt the Texas act. As option to an affiliate to purchase shares of Texas the Schlimmers made no such showing, the court Genco. of appeals erred in dismissing the appeal. The Court reversed and remanded to the court of III. ARBITRATION appeals to allow it to consider the appeal’s merits. A. Appellate Jurisdiction 1. Ellis v. Schlimmer, S.W.3d , 54 Tex. Sup. B. Enforcement/Non-Signatories Ct. J. 793 (Tex. April 1, 2011) [10-0243]. 1. In re Rubiola, 334 S.W.3d 220 (Tex. March 11, Ron and Tana Schlimmer purchased a house 2011) [09-0309]. in Corpus Christi from Veronica Ellis. Coldwell At issue in this case is whether signatory Banker Pacesetter Steel Realtors (Pacesetter) was parties to an arbitration agreement can designate the broker in the transaction and Ellis, who certain non-signatories as parties to the agreement worked for Pacesetter, was the home’s listing and grant them the right to enforce the same. agent. After purchasing the home, the Schlimmers Brian and Christina Salmon agreed to purchase a allegedly discovered various undisclosed defects. home from Greg Rubiola and his wife Catherine. The Schlimmers sued Pacesetter and Ellis, The Salmons and Rubiolas signed a standard form alleging claims for fraud, breach of contract, Texas real estate sales contract, which did not negligent misrepresentation, and violations of the contain an arbitration clause. After agreeing to

3 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 purchase the home, the Salmons applied for retaliation under the TCHRA. Olivas prevailed on mortgage financing with Rubiola Mortgage the retaliation claim, but not the discrimination Company. They used J.C. Rubiola, Greg claim. The trial court entered judgment awarding Rubiola’s brother, as their mortgage broker and Olivas $104,700 in compensatory damages and loan officer, and as part of the loan process the back pay. The trial court also awarded Olivas Salmons executed an arbitration agreement with $464,000 in attorney’s fees for the trial of the the company. case, $99,000 in conditional attorney’s fees for The arbitration agreement designated certain defending any post-judgment motions and non-signatories as parties to the agreement that appeals, and $6,500 in legal assistant fees. The included “individual partners, affiliates, officers, court of appeals reversed only as to the award of directors, employees, agents, and/or Olivas’s back pay for $1,700 and affirmed on all representatives of any party to [the home other grounds. purchase] documents . . . .” Greg Rubiola and J.C. On appeal, El Apple argues that federal law Rubiola are both officers of Rubiola Mortgage should control, and attorney’s fees were Company. After moving into the home, the improperly awarded. Conversely, Olivas argues Salmons sued the Rubiolas and other entities and that state law should control in determining individuals for alleged misrepresentations that attorney’s fees for a suit brought under a state induced the Salmons to buy the home and for statute. The Supreme Court granted El Apple’s failure to make certain repairs to the home. The petition for review. Oral argument has not yet Rubiolas sought to compel arbitration as been scheduled. non-signatory parties to the arbitration agreement. The Salmons objected to arbitration and 2. Tex. Elec. Util. Constr., Ltd. v. Infrasource contended that the Rubiolas could not compel Underground Constr. Servs., L.L.C., 2010 WL arbitration because the Rubiolas were not parties 2638066 (Tex. App.—Tyler 2010), pet. granted, to the agreement. The trial court denied the 54 Tex. Sup. Ct. J. 881 (April 29, 2011) [10- Rubiolas’ motion to compel arbitration. 0628]. The Supreme Court held that signatories to At issue in this case is the recovery of an arbitration agreement may identify other parties attorney’s fees incurred in defending an action in their agreement who may enforce arbitration as involving another company’s liability. Nolan though they signed the agreement themselves. Holloway, an InfraSource employee, was injured The Court further concluded that the underlying while using a rollagon, an aerial lift bucket arbitration agreement in this case was sufficiently vehicle owned by Texas Electric. Holloway sued broad to identify the Rubiolas as parties to the Texas Electric and the company joined agreement and that they accordingly had the right InfraSource as a third-party defendant, alleging to compel arbitration. The Court conditionally that Holloway’s unauthorized use of the rollagon granted mandamus relief as the trial court erred in was conversion. Texas Electric obtained a denying the motion to compel arbitration. take-nothing summary judgment against Holloway and sought to recover from InfraSource damages IV. ATTORNEYS for loss of use of the rollagon and attorney’s fees A. Fees and expenses incurred in defense of the Holloway 1. El Apple I, Ltd. v. Olivas, 324 S.W.3d 181 litigation. (Tex. App.—El Paso 2010), pet. granted, 54 Tex. InfraSource stipulated that Holloway used Sup. Ct. J. 561 (February 25, 2011) [10-0490]. the rollagon without Texas Electric’s permission, At issue in this case is whether state or and that a reasonable market value for the federal law should control in the determination of temporary loss of its use was $10,000, but moved attorney’s fees for a suit brought under the Texas for summary judgment on Texas Electric’s Commission on Human Rights Act (TCHRA). attempt to collect attorney’s fees. InfraSource Myriam Olivas, an employee at the Applebee’s in argued that Texas Electric could not recover El Paso, filed suit against her employer, El Apple attorney’s fees as a matter of law because Texas I, Ltd. (El Apple), alleging discrimination and does not recognize the “tort of another”exception

4 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 to the American rule. In response, Texas Electric had already agreed that no representations were urged the court to adopt section 914(2) of the made outside the lease agreement. The trial court Restatement (Second) of Torts, which it contended did not agree and entered judgment for the would support its recovery of the attorney’s fees Secchis, but the court of appeals reversed and based on InfraSource’s tortuous conduct. entered a take nothing judgment. The trial court granted InfraSource’s motion The Supreme Court held that under the great for summary judgment. The court of appeals weight of precedent, a merger clause does not affirmed, holding that it is not at liberty to adopt a disclaim a suit for fraudulent inducement. Despite theory of recovery that had not been enacted by recent cases like Schlumberger Technology Corp. the legislature or the Texas Supreme Court. The v. Swanson, 959 S.W.2d 171 (Tex. 1997), and Supreme Court granted Texas Electric’s petition Forest Oil Corp. v. McAllen, 268 S.W.3d 51 (Tex. for review. Oral argument has not yet been 2008), which held that parties can once and for all scheduled. disclaim suits for fraud or disclaim the reliance element of fraud, the cases with effective V. CONTRACTS disclaimers of reliance involved parties settling A. Fraudulent Inducement specific disputes, and the disclaimers in those 1. Italian Cowboy Partners, Ltd. v. Prudential Ins. cases expressly disclaimed reliance on anything Co. of Am., S.W.3d , 54 Tex. Sup. Ct. J. 822 other than each party’s own judgment. The (Tex. April 15, 2011) [08-0989]. merger clause in this case, attempting to disclaim The issue in this case is whether a merger the fact of other representations outside the lease, clause denying the existence of representations was not sufficient to waive a claim for fraud. outside the written contract effectively disclaimed There was legally sufficient evidence that Powell reliance on representations so as to preclude a suit made specific factual representations about the for fraudulent inducement. Francesco and Jane restaurant prior to the signing of the lease that Secchi were choosing a site for their new were known to be false. In addition, Prudential restaurant, Italian Cowboy, and settled on a breached the implied warranty of suitability, location owned by Prudential Insurance Company. because although Italian Cowboy was responsible The Secchis negotiated with Fran Powell of Prizm for certain repairs to the restaurant itself under the Partners, the manager of the commercial site, who terms of the lease, the problem causing the foul was the agent of Prudential. At no time during odor actually existed off the immediate premises, lease negotiations did Powell mention the site had and required substantial alterations of sewer lines, previous problems with a persistent sewer gas vents, and even completely moving the kitchen, all odor. Powell even expressly stated that she had of which went beyond mere “repairs.” There was managed the property since its beginning, and had also legally sufficient evidence supporting Italian no problems whatsoever. While preparing to open Cowboy’s damages for lost investment, accounts Italian Cowboy, the Secchis discovered a foul payable, and interest carry, in addition to persistent odor, and were unable to repair it rescission of the lease. The court of appeals’ themselves, nor was Prizm able to repair it. The opinion was reversed, judgment was rendered for Secchis opened the restaurant anyway, but upon rescission based on the implied warranty of discovering the prior restaurant had the same odor suitability claim, and the case was remanded to problem and Powell knew about it, decided to shut the court of appeals for a determination consistent down the restaurant, ceased paying rent, and sued with the Court’s opinion. Prizm and Prudential for rescission of the lease, Justice Hecht, joined by Justices Willet and fraudulent inducement, and breach of the warranty Guzman, dissented, arguing that there should be of suitability. no difference between disclaiming the existence Prudential counterclaimed for breach of the of representations and disclaiming reliance on lease contract and for the Secchis’ breach of the those representations. The Secchis were personal guaranty of the lease, arguing that under experienced restaurant owners represented by the merger clause in the lease, the Secchis could legal counsel, and should not have been able to not sue for fraudulent inducement because they agree there were no representations outside the

5 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 lease agreement and later sue based on such were between Dynex and the SABREs only. The representations. The dissent also argued there was jury returned a verdict for Basic and the trusts, but no breach of the implied warranty of suitability, Dynex successfully moved for judgment because under the lease, the repairs should have notwithstanding the verdict. In granting Dynex’s been the responsibility of Italian Cowboy. motion, the trial court held that the trusts could not recover under either the New Orleans loan B. Third-Party Beneficiaries agreement or the Commitment because neither 1. Basic Capital Mgmt., Inc. v. Dynex was an intended third-party beneficiary of the Commercial, Inc., S.W.3d , 54 Tex. Sup. Ct. agreements. The court also held that Basic could J. 781 (Tex. April 1, 2011) [08-0244]. not recover lost profits arising from Dynex’s At issue in this case was whether the breach of the Commitment because such damages plaintiffs could recover against the defendant- were not reasonably foreseeable when the lender when the lender breached an agreement to Commitment was made. The court of appeals provide financing for entities that some of the affirmed. The Supreme Court reversed and plaintiffs were to create for the specific remanded to the court of appeals. transactions. Basic Capital managed real estate The Court held that TCI could recover for investment trusts, including American Realty breach of the New Orleans loan agreement and Trust (ART) and Transcontinental Realty that both trusts could recover for breach of the Investors (TCI). The trusts held investment Commitment as third-party beneficiaries. The property through single-asset bankruptcy-remote Court reasoned that the SABREs were to be entities (SABREs). Each SABRE owns only a created for Dynex’s benefit and that it would be single asset and is independent of the parent trust, unreasonable to require the trusts to create so that the insolvency of one does not affect the SABREs that lacked any financing for the sole other. Lenders often require the creation of such purpose of suing Dynex. Although a corporate entities as a precondition of the loan to ease the parent is not always deemed a third-party recovery of collateral in the event of a default. beneficiary of a subsidiary’s contract, in this Dynex negotiated with Basic and the trusts for a instance the transaction was structured to benefit series of loans. Dynex agreed that it would loan Dynex, and TCI and ART were clearly intended $37 million to three SABREs that TCI would beneficiaries of the agreements. create and own; the loan would be used to develop The Court also held that Basic could recover real estate in New Orleans. In a closely related lost profits as consequential damages because they transaction, Basic and Dynex made a commitment were reasonably foreseeable. The requirement of by which Basic would propose other SABREs, to reasonable foreseeability does not obligate Basic be created and owned by TCI and ART, to borrow to know the specific venture for which loans made an additional $160 million from Dynex over the under the Commitment would have been used; it next two years. Although TCI and Dynex made is enough that Basic knew the nature of the the New Orleans loan agreement and Basic and intended use—financing ART’s and TCI’s real Dynex entered into the Commitment, both estate investments. agreements noted that the borrowers would be SABREs, rather than the trusts. After Dynex VI. DAMAGES made the loan to the first New Orleans SABRE, A. Punitive Damages market interest rates rose, and Dynex reneged on 1. Safeshred, Inc. v. Martinez, 310 S.W.3d 649 its obligations to make the additional loans (Tex. App.—Austin 2010), pet granted, 54 Tex. required by both agreements. Sup. Ct. J. 633 (March 11, 2011) [10-0426]. Basic and the trusts then sued Dynex for At issue in this case is whether punitive breach of contract, alleging that they had to forego damages are available for a Sabine Pilot wrongful investment opportunities or seek loans at higher discharge claim, and if so, whether an award of interest rates because of Dynex’s breach. The punitive damages twenty-six times larger than the parties disputed whether Basic or the trusts had award of economic damages is unconstitutionally standing, with Dynex arguing that the agreements excessive.

6 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Louis Martinez, III worked for Safeshred as University pays African-American professors of a commercial driver. During his employment, inferior qualification, experience, and teaching Martinez was asked to haul loads that he felt were assignments a higher compensation than it pays unsafe and were in violation of relevant traffic and her. To be timely, the complaint must have been safety laws. When Martinez refused to haul a load filed not more than 180 days after the alleged that he believed to be illegal, Safeshred unlawful employment practice “occurred.” The management told him he would be terminated if he promotion decision was not within the 180-day continued to refuse. Martinez filed suit claiming window, but Chatha’s receipt of her last paycheck Safeshred terminated him for refusing to perform was. After Chatha filed suit, the University filed an illegal act—a Sabine Pilot claim. The jury a plea to the jurisdiction, asserting that Chatha did awarded Martinez lost wages, non-economic not timely file her suit. The trial court denied the mental anguish damages, and $250,000 in plea. exemplary damages. The trial court reduced the The court of appeals affirmed. The court exemplary damage award to $200,000 to comply recognized that the Texas Supreme Court had with the statutory cap, but otherwise entered interpreted the TCHRA in accordance with the judgment on the verdict. On appeal Safeshred did federal courts’ interpretation of Title VII, the not dispute Martinez’s lost wages, but challenged similar federal act. Consistent with federal cases, the awards of non-economic and exemplary the Court had previously concluded that a damages. The court of appeals unanimously complaint must be filed within 180 days of the affirmed the lost earnings award and reversed the alleged discriminatory decision. But after that award of non-economic damages. The court of decision, Congress amended Title VII to provide appeals also affirmed the award of exemplary that an unlawful employment practice “occurs” damages, with one justice dissenting. Safeshred when when an individual is subject to a appealed, arguing that punitive damages should be discriminatory compensation decision, including unavailable for Sabine Pilot claims, that the jury’s each time compensation is paid. The court of finding of malice was not supported by legally appeals concluded that the definition in Title VII sufficient evidence, and that a punitive damage should be applied to the TCHRA. The University award with a 26:1 ratio is excessive. filed a petition for review with the Supreme The Supreme Court granted Safeshred’s Court, arguing that the Title VII amendments do petition for review. Oral argument has not yet not apply to the TCHRA. been scheduled. The Supreme Court granted the University’s petition for review. A date for oral argument has VII. EMPLOYMENT LAW not yet been scheduled. A. Pay Discrimination Claims 1. Prairie View A&M Univ. v. Chatha, 317 VIII. EQUINE ACTIVITY ACT S.W.3d 402 (Tex. App.—Houston [1st Dist.] A. Interpretation and Application 2010), pet granted, 54 Tex. Sup. Ct. J. 561 1. Loftin v. Lee, S.W.3d , 54 Tex. Sup. Ct. J. (February 25, 2011) [10-0353]. 895 (Tex. April 29, 2011) [09-0313]. At issue in this case is whether the 180-day At issue in this case was whether the Texas statute of limitations for Texas Commission on Equine Activity Limitations on Liability Act treats Human Rights Act (TCHRA) pay-discrimination risks unrelated to animal behavior as inherent claims begins to run when the discriminatory risks of equine activity and whether the Act limits decision is made or after the last discriminatory liability for a defendant’s failure to fully inquire paycheck is received. Diljit Chatha is a professor into a plaintiff’s capabilities when that failure did at Prairie View A&M University (the University). not cause the injury. Janice Lee went horseback She was promoted to a full professor position in riding with her friend Terri Loftin around Loftin’s 2004. On September 25, 2006 she filed a charge home. Although Lee had frequently been around of discrimination with the Equal Employment horses, she was an inexperienced rider. Loftin Opportunity Commission and the Texas selected one of her horses for Lee to ride, and the Workforce Commission, alleging that the two proceeded on a trail in and around Loftin’s

7 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 property. The pair approached a muddy, boggy prevention of the accident. Under such area, which contained vines hanging from trees circumstances, the exception does not apply. abutting the trail. Both Lee and Loftin knew that a horse might jump if a vine were to touch its IX. EVIDENCE flank, but they proceeded onward. A vine touched A. Lay Opinion Testimony the leg of Lee’s horse and it jumped suddenly, 1. Reid Road Mun. Util. Dist. No. 2 v. Speedy throwing Lee off the horse. As a result, Lee broke Stop Food Stores, Ltd., S.W.3d , 54 Tex. Sup. her vertebra. She then brought suit against Loftin. Ct. J. 658 (Tex. March 11, 2011) [09-0396]. The trial court held that the Equine Activity Act The first issue in this case was whether an barred Lee’s claims and granted Loftin’s motion employee of the corporate general partner of a for summary judgment, but the court of appeals limited partnership qualifiedMay 10, 2011 to reversed and remanded. The Supreme Court testify about the fair market value of partnership reversed the judgment of the court of appeals and property under either the Property Owner Rule or affirmed the judgment of the trial court. Texas Rule of Evidence 701. The second issue The Court first held that inherent risks of was whether the condemning authority in a equine activity, for which the Act limits liability, condemnation proceeding adopted the damages are not limited to risks directly arising from an opinion of an appraiser by presenting the animal’s behavior. Lee argued that Loftin was appraiser’s testimony and written appraisal in the negligent in choosing a muddy, heavily-wooded special commissioners’ hearing. trail for their ride, and that the Act did not limit Petitioner, Reid Road Municipal Utility liability for this type of negligence. The Court District (the District), sought to acquire a recognized, however, that the Act limited liability waterline easement across a strip of land owned for certain types of conduct that necessarily arose by Speedy Stop. At a hearing before the from things other than an animal’s behavior, such commissioners, the District proffered an appraisal as land conditions or the negligence of other by David Ambrose that valued Speedy Stop’s participants in the activity. The Act also excepted damages at $9,342. The commissioners assessed certain actions from the limitation on liability, and damages in that amount in favor of Speedy Stop. these exceptions applied to a broad range of Speedy Stop timely filed objections to the conduct, including knowingly providing faulty commissioners’ findings, and the trial court safety equipment or failing to determine a proceeded with a de novo review. The District participant’s ability, further undermining Lee’s then filed a second motion for summary judgment reading of the statute. in which it asserted that there was no evidence of The Court also rejected Lee’s argument that the amount of just compensation owed to Speedy Loftin could not avail herself of the Act’s Stop for the taking of the easement. In its motion, protections because Loftin allegedly did not make the District argued that Speedy Stop should a “reasonable and prudent effort to determine the receive only one dollar in nominal damages for ability of [Lee] to engage safely in the equine the condemnation of the easement. In response, activity.” See TEX. CIV. PRAC. & REM. CODE § Speedy Stop offered the affidavit of Carlton 87.004(2). Section 87.004 contains several LaBeff who was the vice president of C.L. exceptions to the Act’s liability limitation, Thomas, Inc., the general partner of Speedy Stop. including that provided by section 87.004(2). The LaBeff testified that the fair market value of the Court held that this exception to the Act’s liability Property was reduced by $62,000 after the limitation applied only when the defendant’s condemnation of the easement. The trial court failure to make an effort to determine the sustained the District’s objections to LaBeff's plaintiff’s ability is a cause of the damage. In this affidavit, excluding these items from the case, Loftin was aware of Lee’s limited riding summary-judgment evidence. With no evidence abilities, and the Court held that Loftin was not before it as to how much compensation the required to ask any further questions due to her District had to pay Speedy Stop, the trial court prior knowledge. Lee does not contend that a granted the District’s no-evidence motion for further inquiry could have resulted in the summary judgment. The trial court rendered

8 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 judgment awarding Speedy Stop only nominal that James was intentionally underemployed and damages of one dollar for the condemnation of the set child support based on an earning potential of easement. The court of appeals reversed and $60,000 a year. The court of appeals affirmed. remanded the trial court’s judgment, holding that James appealed and argued that Texas Family the Property Owner Rule applies to corporate Code section 154.066 requires proof that the entities. Applying the Property Owner Rule, the obligor is intentionally underemployed for the court of appeals held that LaBeff was a designated purpose of evading child support, as the majority corporate agent familiar with the market value of of the Texas courts of appeals had required. the Property and the trial court abused its The Supreme Court held that intent to avoid discretion in striking his affidavit. child support obligations need not be proven for The Supreme Court held that a business the trial court to apply the child support guidelines entity that owns property can offer non-expert to earning potential instead of actual earnings. testimony as to its value so long as the person After noting the disagreement among the courts of testifying is an appropriate corporate officer and appeals, the Supreme Court looked to the text of has personal knowledge of the value. But under Texas Family Code section 154.066. Because the this test, the Court held that LaBeff was not statute was unambiguous, the Court declined to qualified to give testimony regarding the value of read into the statute an additional proof the property because he worked for the corporate requirement the Legislature did not express. The general partner of the property owner and not the Court reasoned that trial courts have discretion to property owner itself. But the Court further held apply the child support guidelines to the earning that the trial court abused its discretion by not potential of an obligor if they make a finding that admitting the testimony of Ambrose before the an obligor is intentionally unemployed or special commissions as an adoptive admission underemployed, considering the best interest of against the District. Justices Willett and the child. However, the trial court may consider Lehrmann concurred, explaining that they would in its analysis an obligor’s intent to avoid child have announced a broader rule for limited support as a factor, along with other relevant partnerships because such entities often do not facts. The Supreme Court, in a unanimous have formal corporate officers but typically act decision, affirmed the court of appeals’ judgment. through managing partners. They agreed, however, that LaBeff did not establish that he was XI. GOVERNMENTAL IMMUNITY personally familiar with the property and therefore A. Contract Claims his testimony was not admissible. 1. City of Houston v. Williams, S.W.3d , 54 Tex. Sup. Ct. J. 713 (Tex. March 18, 2011) X. FAMILY LAW [09-0770]. A. Child Support In this suit by former Houston Firefighters 1. Iliff v. Iliff, S.W.3d , 54 Tex. Sup. Ct. J. against the City of Houston, the issue was whether 843 (Tex. April 15, 2011) [09-0753]. governmental immunity was waived for claims At issue in this case is whether Texas Family alleging underpayment of lump sums due to the Code section 154.066 requires proof that an Firefighters upon retirement. The Firefighters obligor parent is unemployed or underemployed pointed to Local Government Code section for the purpose of evading child support in order 271.152, which waives immunity for breach of for a trial court to calculate child support based on qualifying written contracts. They advanced three an obligor’s earning potential, rather than actual sets of writings alleged to qualify as contracts earnings. Shortly before James and Jerilyn Iliff’s under that section: (1) certain City Ordinances divorce, James voluntarily quit a job working in governing the Fire Department, (2) the statutory the chemical industry making $102,000 a year. civil service provisions found in Local After leaving his employment, James had little Government Code Chapter 143, and (3) certain gainful employment other than operating a tractor collective-bargaining and meet-and-confer for an estimated $200 a month. During the Agreements between the City and the Firefighters’ divorce proceedings, the trial judge determined union. The trial court denied the City’s plea to the

9 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 jurisdiction. On interlocutory appeal, the Court of passenger was seriously injured in the accident. Appeals affirmed, holding that the Ordinances The plaintiffs brought suit against BNSF, alleging constituted a written contract under section that an overgrowth of vegetation at the railway 271.152, but that Chapter 143 did not constitute a crossing had obstructed the driver’s view and contract. The court of appeals also ruled that the caused the collision. The plaintiffs alleged that Firefighters lacked standing to enforce the SSI Mobley, a chemical herbicide company hired Agreements. Both sides petitioned for review. by BNSF, was negligent in its failure to properly The Supreme Court affirmed in part and maintain the vegetation growth. BNSF twice reversed in part. As to the Ordinances, the Court tendered defense of the case to National Union, affirmed the court of appeals’ judgment, holding which denied that it had either a duty to defend or that relevant sections of Chapter 34 of the City of indemnify. BNSF filed suit seeking a declaratory Houston Code of Ordinances constituted a judgment, and while that suit was pending, it unilateral, written employment contract between settled with the plaintiffs in the underlying case. the City and the Firefighters (which became BNSF and National Union filed competing enforceable when the Firefighters performed the motions for summary judgment in the trial court, services requested in the Ordinances). The Court which ultimately granted National Union’s therefore held that the City’s immunity was motion. National Union contended it owed no waived for breach of the Ordinance-based contract duty to defend or indemnify BNSF because the by section 271.152. facts of the underlying accident fell into a policy The Court also affirmed the court of appeals’ exclusion. Specifically, National Union argued conclusion regarding Local Government Code that because SSI Mobley’s work at the railway Chapter 143, holding that, under the law of was complete at the time of the accident, the contracts, the chapter did not constitute an offer “completed operations exclusion” barred from the City to the Firefighters, and so could not coverage. The court of appeals agreed and be a contract for which immunity was waived. affirmed, concluding first that National Union Finally, the Court reversed the court of appeals’ owed no duty to defend under the eight-corners judgment as to the Agreements, and held that (1) rule analysis and that, for the same reasons, it as retirees, the Firefighters had standing to enforce owed no duty to indemnify. the Agreements, and (2) the Agreements The Supreme Court reversed, in part, per constituted written contracts for which immunity curiam and remanded the case to the court of was waived by section 271.152. Accordingly, the appeals. Although the Court did not address Court upheld the trial court’s denial of the plea to BNSF’s duty to defend arguments, it concluded the jurisdiction, and remanded to that court for that the court of appeals incorrectly conducted the further proceedings. duty to indemnify inquiry. The Court pointed out that the duty to defend and the duty to indemnify XII. INSURANCE are separate from one another. Although in some A. Policies/Coverage cases the same facts that negate the duty to defend 1. Burlington N. & Santa Fe Ry. Co. v. Nat’l will also negate the duty to indemnify, in this case Union Fire Ins. Co., 334 S.W.3d 217 (Tex. the court of appeals should have examined February 25, 2011) [10-0064]. extrinsic evidence, such as the contract between The issue in this insurance coverage dispute BNSF and SSI Mobley, when deciding whether is whether the court of appeals erred in its analysis National Union owed a duty to indemnify. of National Union Insurance Company’s duty to indemnify by failing to consider extrinsic evidence XIII. JURISDICTION upon reviewing a summary judgment granted in A. Subject Matter Jurisdiction favor of National Union. The underlying lawsuit 1. Minton v. Gunn, 301 S.W.3d 702 (Tex. was based on a collision between a Burlington App.—Fort Worth 2009), pet. granted, 54 Tex. Northern and Santa Fe Railway Company (BNSF) Sup. Ct. J. 538 (February 8, 2011) [10-0141]. train and an automobile. The driver of the car and At issue in this case is whether a patent issue one of the passengers were killed and another raised in a legal malpractice action mandates the

10 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 exercise of federal jurisdiction. Vernon Minton The Supreme Court granted the petition for alleges his attorneys’ malpractice in his patent review and heard oral argument on March 1, litigation caused him to lose the patent suit, or in 2011. the alternative, caused its pretrial dismissal. After Minton invented a software program to trade XIV. MEDICAL LIABILITY securities, the U.S. Patent and Trademark Office A. Expert Reports issued a patent for his invention. To enforce the 1. Mitchell v. The Methodist Hosp., S.W.3d , patent, Minton sued NASD and NASDAQ Stock 54 Tex. Sup. Ct. J. 669 (Tex. March 11, 2011) Market, Inc. in federal court. The federal district [10-0117]. court granted NASD and NASDAQ’s motion for Texas Civil Practice and Remedies Code summary judgment on the ground that the patent section 74.351 requires that a trial court dismiss a was invalid under the on-sale bar. Minton then health care liability claim unless the claimant asked his attorneys to consider a new argument, serves an expert report within 120 days after filing that the experimental use doctrine negated the on- suit. This dismissal requirement is subject to the sale bar. A motion for reconsideration was filed trial court’s discretion to grant one thirty-day on Minton’s behalf, with the experimental use extension for the claimant to cure a timely served issue briefed by new counsel. The district court but deficient report. TEX. CIV. PRAC. & REM. declined to grant reconsideration. The Federal CODE § 74.351(c). The trial court here dismissed Circuit affirmed and declined to address the merits the patient’s suit because the expert report was of Minton’s new argument. inadequate but did not expressly rule on the Minton filed a legal malpractice action patient’s request for an extension. The court of against his attorneys, alleging they negligently appeals affirmed, concluding that the trial court failed to timely plead and brief the experimental had not abused its discretion in implicitly use doctrine. After the defendants filed no- overruling the patient’s request for more time evidence and traditional motions for summary because of the expert report’s “extreme judgment, the trial court ruled in the defendants’ deficiencies.” The Supreme Court reversed and favor and rendered a take-nothing judgment on all remanded in light of Samlowski v. Wooten, 332 claims. S.W.3d 404 (Tex. 2011), wherein the Court While this appeal was pending before the discussed its views on when a trial court should court of appeals, the Federal Circuit issued Air grant a motion to cure under section 74.351(c). Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, LLP, 504 F.3d 1262 (Fed. Cir. 2. Samlowski v. Wooten, 332 S.W.3d 404 (Tex. 2007) and Immunocept, LLC v. Fulbright & February 25, 2011) [08-0667]. Jaworski, LLP, 504 F.3d 1281 (Fed. Cir. 2007). In Texas Civil Practice and Remedies Code response, Minton moved to dismiss the appeal for section 74.351(b) requires that a trial court lack of jurisdiction on the ground that the dismiss a health care liability claim unless the malpractice action must be brought in federal claimant serves an expert report within 120 days court instead. The court of appeals denied his after filing suit. This dismissal requirement is motion to dismiss and held that a legal malpractice subject to the trial court’s discretion to grant one claim premised on an unsuccessful outcome of an thirty-day extension for the claimant to cure a underlying patent infringement lawsuit was not timely served but deficient report. Id. § 74.351(c). subject to exclusive federal court jurisdiction. The Court granted this petition to consider under Justice Walker dissented, writing that federal what circumstances a trial court might abuse its courts possessed exclusive jurisdiction. On discretion when denying such an extension. petition for review before the Supreme Court, The trial court dismissed Carol Wooten’s Minton argues that the malpractice action belongs health care liability claim with prejudice because in federal court. Defendants, however, argue that her expert report did not adequately show how the state courts properly exercised jurisdiction over alleged negligence proximately caused her the matter. injuries. The trial court determined the report was not a good-faith effort to comply with the expert-

11 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 report requirement. The appeals court reversed to served on each physician or health care provider allow an extension to cure the report, holding that against whom a health care liability claim is the expert report was not a good-faith “effort” but asserted within 120 days of filing suit. In this was a good-faith “attempt” to comply with the appeal, the claimant argued that she was not able report requirement. to serve the expert report within 120 days because An opinion authored by Justice Medina the defendant physician could not be found. She concluded that “good faith” was not the test for further contended that she diligently searched for abuse of discretion under section 74.351(c) but the physician and that a due diligence exception nevertheless agreed that the case should be should apply to extend the statutory deadline or, remanded to the trial court in the interests of alternatively, that the statute is unconstitutional as justice. Rather than good faith, Justice Medina applied to her because it was impossible for her to submitted that the overriding principle guiding comply with its deadline. The court of appeals trial court discretion under section 74.351(c) concluded that the statute did not provide for an should be the elimination of frivolous claims and exception to its deadline under these the preservation of meritorious ones. Because an circumstances and was not unconstitutional as adequate expert report is how the statute applied to her. distinguishes between the two, a trial court should The Supreme Court suggested that a due- grant an extension when a deficient expert report diligence exception might apply if it were can readily be cured and deny the extension when otherwise impossible to comply with the statute’s it cannot. Justice Medina suggested that a patient 120-day deadline. The Court concluded, however, should therefore promptly fix any problems with that it was not impossible in this case to comply the report and do so within the statutory 30-day with the deadline. Although the defendant period, even when the trial court denies an physician could not be found, he was eventually extension, to demonstrate the court’s error. served by publication, but that occurred several In a concurring opinion, Justice Guzman, months after the deadline. Because there was no joined by Justice Lehrmann and by Justice evidence of impossibility or the requisite diligence Wainwright, in part, concluded that a trial court necessary to extend the deadline, the Court should grant an extension to cure a deficient report affirmed the court of appeals’ judgment. whenever a timely report included a qualified The Court further noted that the unfortunate expert’s expressed belief that a patient possessed dismissal of the health care liability claim in this a health care liability claim. Justice Guzman case might have been avoided had the Legislature concurred in the judgment to remand. chosen to calculate the 120-day expert report Justice Wainwright, concurring and deadline from the date of the suit’s service on the dissenting, concurred in the judgment to remand defendant, rather than its filing. When but suggested that the determination to grant an complications arise in locating or serving a extension should be made as a matter of law from defendant health care provider, the current statute the deficient report’s content. presents a very small window through which to Justice Johnson, joined by Justices Green and serve both the lawsuit and the expert report. Willett, filed a dissenting opinion, concluding that the trial court had not abused its discretion in B. Health Care Liability Claims denying the motion to extend because the expert 1. Ghazali v. Brown, 307 S.W.3d 499 (Tex. report was deficient and there was no evidence in App.—Fort Worth 2010), pet. granted, 54 Tex. the record that the report would have been cured Sup. Ct. J. 537, 538 (February 8, 2011) [10-0232]. had the extension been granted. At issue in this case is whether Patricia Brown’s claims regarding laser hair removal 3. Stockton v. Offenbach, S.W.3d , 54 Tex. against Dr. Basith Ghazali are subject to the Sup. Ct. J. 590 (Tex. February 25, 2011) [09- expert report requirement of Chapter 74 of the 0446]. Texas Civil Practice and Remedies Code. In Texas Civil Practice and Remedies Code 2004, Brown visited American Laser Center’s section 74.351 requires that an expert report be Fort Worth facility to inquire about having hair

12 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 removed from her face and neck. Brown visited Williams had a physical altercation while there; the facility at recommended intervals between Williams was injured, and Vidaurre died. 2004 and 2006 to have the hair removed utilizing The representative of Vidaurre’s estate sued a procedure known as laser hair removal. During West Oaks and Williams on claims which no one a visit in 2006, Brown alleges she suffered burns disputes are health care liability claims, but are no and lacerations on her face and neck as a result of longer at issue in this appeal. Williams filed the operator’s negligence. At the time Brown various cross-claims against West Oaks, began receiving treatments, Dr. Ghazali was the essentially alleging it breached its duty of care in Fort Worth facility’s medical director. Brown failing to provide adequate training and safety filed suit against American Laser Center and Dr. protocols. His claims were brought pursuant to Ghazali, alleging, in part, that Dr. Ghazali failed to the Texas Workers’ Compensation Act, TEX. LAB. obtain her informed consent by not adequately CODE § 406.033, which permits an employee to disclosing the heightened degree of risk when bring a negligence action against a non-subscriber. performing laser hair removal on African West Oaks contended that Williams’s claims were Americans. Brown filed an expert report along “health care liability claims” under the TMLA, with her original petition. Dr. Ghazali moved to TEX. CIV. PRAC. & REM. CODE § 74.001(a)(13), dismiss on the grounds that Brown’s report failed for which an expert report is required. See TEX. to meet the requirements of section 74.351 of the CIV. PRAC. & REM. CODE § 74.351. Since Civil Practice and Remedies Code. The trial court Williams had filed no such report, West Oaks sustained Dr. Ghazali’s objection to the adequacy filed a motion to dismiss. of Brown’s expert report, but allowed for a period The trial court denied West Oaks’s motion. of thirty-days in which to cure the report’s The court of appeals affirmed, reasoning deficiencies. Upon service of Brown’s second Williams’s claims flowed from an report, the trial court deemed it adequate and employment—not medical—relationship. It also denied Dr. Ghazali’s motion to dismiss. Dr. noted that because Williams’s claims were not Ghazali filed this interlocutory appeal. The Court health care liability claims, it did not need to of Appeals affirmed, holding that Brown’s claims address whether Williams was a “claimant” under were not health care liability claims and thus not section 74.001(a)(2). subject to Chapter 74’s expert report requirement. West Oaks filed a petition for review. It The Court of Appeals’ holding rested upon its argues primarily that Williams’s claims center on conclusion that laser hair removal is not treatment the control, supervision and/or restraint of under Chapter 74. The Supreme Court granted Dr. patients, and the correlating training, supervision, Ghazali’s petition for review. Oral argument has safety, and security policies provided to health not yet been scheduled. care staff—which are interwoven with the rendition of health care services, and therefore 2. Tex. West Oaks Hosp., LP v. Williams, 322 health care liability claims. It also argues that this S.W.3d 349 (Tex. App.—Houston [14th Dist.] makes Williams a claimant under section 2010), pet. granted, 54 Tex. Sup. Ct. J. 750 (April 74.001(a)(2). The Supreme Court granted the 1, 2011) [10-0603]. petition. Oral argument has not yet been At issue in this case is whether a hospital scheduled. employee’s claims against the hospital for injuries he incurred from an altercation with a patient were 3. Turtle Healthcare Grp. v. Linan, S.W.3d , health care liability claims under Chapter 74 of the 54 Tex. Sup. Ct. J. 911 (Tex. April 29, 2011) [09- Texas Medical Liability Act (TMLA). 0613]. Frederick Williams, a psychiatric technician The Supreme Court issued an opinion in this at Texas West Oaks Hospital, was assigned to case on February 25, 2011. On April 29, the observe and monitor patient Mario Vidaurre’s Court denied the Linans’ motion for rehearing, behavior. When Vidaurre became agitated, withdrew the prior opinion, and issued another in Williams took him to a fenced-in smoking area its place. At issue in this case is whether claims behind the hospital. Ultimately, Vidaurre and based on the failure of a ventilator can be brought

13 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 both as claims subject to the Texas Medical cause of action against a health care provider Liability Act and claims not subject to that Act. alleges misconduct which is an inseparable part of Turtle Healthcare supplied a ventilator to Maria the rendition of health care, the claim qualifies as Linan. Maria’s mother and caretaker requested a health care liability claim. Pursuant to the two external batteries because of an impending provisions of the TMLA, plaintiffs asserting hurricane, but Turtle delivered only one battery. health care liability claims must file an expert During the hurricane the Linan’s electricity went report within 120 days of filing their petition or out, the ventilator stopped working, and Maria risk having their case dismissed. Following a died. Maria’s mother and brother (collectively, chiropractic examination during which she was the Linans) sued Turtle, alleging Turtle was allegedly sexually assaulted, Christina Gugel filed negligent in the operation and/or maintenance of suit against Dr. Wasserman for sexual assault, the ventilator and negligent in delivering a battery, intentional infliction of emotional defective ventilator, battery, and battery boxes. distress, and harassment. When Gugel failed to Turtle filed a motion to dismiss on the grounds follow the TMLA’s expert report requirements, that the Linans’ claims were health care liability Wasserman filed a motion to dismiss, which the claims (HCLCs) and the Linans had not filed an trial court denied. In response to Wasserman’s expert report. The court of appeals held that the interlocutory appeal from the trial court’s Linans’ claims involving Turtle’s provision of the decision, the court of appeals held that Gugel’s ventilator were HCLCs and barred by the Linans’ claims did not qualify as health care liability failure to file an expert report. But the Court held claims and affirmed the trial court’s denial. In his that the Linans’ claims alleging Turtle was petition for review, Wasserman argues that the negligent by failing to provide functioning, plain language of the TMLA makes clear that all charged batteries were not HCLCs. claims based on a health care provider’s departure The Supreme Court held that all the Linans’ from accepted standards of medical care during claims against Turtle were HCLCs and must be the provision of medical treatment constitute dismissed. The Court noted that the Linans did health care liability claims. Wasserman further not file a petition for review challenging the court asserts that courts must use expert reports to of appeals’ judgment dismissing part of their determine whether the alleged conduct falls claims. Relying on Yamada v. Friend, 335 outside accepted standards of care to avoid taking S.W.3d 192 (Tex. 2010), the Court held that on the role of experts themselves. Gugel responds claims based on the same underlying facts could that sexual assault never reasonably constitutes an not be brought as both health care liability claims inseparable part of the rendition of medical and ordinary negligence claims. Permitting the services, and therefore, may never qualify as a same underlying facts to give rise to both types of health care liability claim. A majority of the claims would effectively negate the procedures courts of appeals which have considered the issue and limitations of the Texas Medical Liability Act. have held that claims of sexual assault committed The Court rendered judgment dismissing all the during a medical exam never constitute health Linans’ claims against Turtle. care liability claims under the TMLA. However, based on its reliance on expert testimony to 4. Wasserman v. Gugel, 2010 WL 1992622 (Tex. determine whether a patient had confused routine App.—Houston [14th Dist.] 2010), pet. granted, medical examination techniques with sexual 54 Tex. Sup. Ct. J. 750 (Tex. April 1, 2011) [10- assault, one court of appeals has held sexual 0513]. assault does qualify as a health care liability claim The issue presented in this case is whether for which an expert report must be filed. This claims asserted by patients against individual issue is one of first impression for the Supreme health care providers for sexual assaults allegedly Court. committed during the course of a medical The Supreme Court granted Wasserman’s examination constitute health care liability claims petition for review. Oral argument has not yet for which an expert report must be filed under the been scheduled. Texas Medical Liability Act (TMLA). When a

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C. Statute of Limitations provides the required pre-suit notice without also 1. Carreras v. Marroquin, S.W.3d , 54 Tex. providing the required medical authorization Sup. Ct. J. 788 (Tex. April 1, 2011) [09-0857]. form. Accordingly, the Court reversed the The issue in this case is whether the statute judgment of the court of appeals and rendered of limitations is tolled when a plaintiff sends pre- judgment that the Marroquins take nothing. suit notice of a health care liability claim to the physician-defendant, but fails to accompany it XV. PROCEDURE—PRETRIAL with an authorization form for the release of A. Voir Dire medical information as required by Chapter 74 of 1. In re Commitment of Hill, 334 S.W.3d 226 the Texas Civil Practice and Remedies Code. (Tex. March 11, 2011) [10-0280]. Priscilla Marroquin died on December 20, 2001, At issue in this case was whether, during voir allegedly resulting from insufficient post-surgery dire in a civil commitment trial, the defendant was treatment while she was under the care of Dr. Jose entitled to ask the potential jurors (1) whether Carreras. Two days before the two-year statute of they could give a fair trial to a homosexual and (2) limitations would have expired, Priscilla’s parents, whether they would require the state to prove both the Marroquins, provided Dr. Carreras with notice elements required by statute. The trial court of their health care liability claims, but did not refused to allow the defendant to pursue both lines send an authorization form to Dr. Carreras at that of questioning and the court of appeals affirmed. time. The case was abated until Dr. Carreras The Supreme Court reversed and remanded received the correct form. Thereafter, Dr. to the trial court for a new trial. As to the first Carreras filed a motion for summary judgment line of questioning, the Court held that because claiming that the Marroquins’ claims were barred details of homosexual acts that the defendant had by limitations. The trial court held that the engaged in were relevant to the trial, he was requirement for notice and an authorization form therefore entitled to question potential jurors under sections 74.051 and 74.052 were separate about their ability to give a fair trial to a person and that, because notice had been given, the they perceived to be a homosexual. As to the statute of limitations was tolled notwithstanding second line of questioning, the Court held that the Marroquins’ failure to simultaneously provide because the statute required the State to prove two the statutorily required authorization. The trial distinct elements, and because the jury was court therefore denied Dr. Carreras’s motion for required by statute and oath to follow the law, the summary judgment, but did issue a written order defendant must be permitted to ask the jury for interlocutory appeal, and Dr. Carreras whether it could comply with such a legislatively appealed. The court of appeals affirmed the trial mandated commitment. By denying these lines of court’s judgment. questioning, the trial court abused its discretion. The Supreme Court granted Carreras’s As to both issues, the Court held that error had petition for review. It noted that both sections been preserved because the defendant had 74.051(a) and 74.052(a) specify that the notice requested to ask a proper question, had made clear “must be accompanied by” an authorization form, the grounds upon which that request was based, TEX. CIV. PRAC. & REM. CODE §§ 74.051(a), and had obtained a ruling on the request from the .052(a), and that “[m]ust accompany” is a trial court. directive that creates a mandatory condition precedent. The Court concluded that if the XVI. NEGLIGENCE authorization does not accompany the notice, then A. Premises Liability the benefit of the notice—tolling—may not be 1. Allen Keller Co. v. Foreman, S.W.3d , 54 utilized. As the Marroquins did not provide the Tex. Sup. Ct. J. 850 (Tex. April 15, 2011) [09- statutorily required authorization form until after 0955]. the statute of limitations expired, the Court held At issue in this case was whether a contractor that their claims were untimely, and that the court could be held liable on a premises liability theory of appeals erred in holding that Chapter 74 does for the death of a young girl who perished when not bar tolling of limitations when a plaintiff the vehicle in which she was a passenger crashed

15 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 into the Guadalupe River. Allen Keller Company reversed the judgment of the court of appeals and was hired as general contractor by Gillespie rendered judgment in favor of Allen Keller. The County for several different road construction and Court separated the Foremans’ duty argument into revitalization projects. One such project required two separate legal theories: a duty to rectify the Allen Keller to construct a concrete pilot channel dangerous condition and a duty to warn of the adjacent to a bridge, divert water emanating from dangerous condition. In rejecting that a duty to the roadway away from the bridge and into the rectify existed, the Court reasoned that the channel. To construct the concrete pilot channel, consequences of imposing such a duty on a Allen Keller was required to excavate a portion of contractor whose work was performed under, and an embankment parallel to the roadway. A in according with, strict contractual specifications, guardrail extended away from the bridge and the would be unreasonably burdensome. The Court roadway towards the embankment, but there was also rejected the Foreman’s argument that Allen a gap of approximately five feet between the end Keller owed a duty to warn either the public or the of the guardrail and the embankment. When the County of the dangerous condition. The Court embankment was excavated the gap roughly noted that the County, either on its own or through doubled in size, leaving an opening wide enough a designated representative, frequented the site to accommodate a vehicle. The contract during construction. Moreover, the County, governing Allen Keller’s work did not require the through its representative, signed off on Allen guardrail to be extended to compensate for the Keller’s work as having been completed in increased width of the gap, and Allen Keller did accordance with the contractual specifications. In not do so. The County had a representative on-site addition, at the time of the accident, Allen Keller throughout construction and at the conclusion of was no longer in possession or control of the the work it accepted Allen Keller’s work as having premises. been completed according to the contract’s specifications. Some six months after Allen XVII. OIL & GAS Keller completed its work on the project, A. Fraud Courtney Foreman was a passenger in a vehicle 1. Exxon Corp. v. Miesch, S.W.3d , 54 Tex. heading towards the one-lane span. The road was Sup. Ct. J. 761 (Tex. April 1, 2011) [05-1076]. slick from rain and due to impending darkness After issuing its original opinion, the Court visibility was limited. The driver of the vehicle, granted the parties’ motions for rehearing, and which was registered to Courtney, lost control as without hearing additional oral argument, it rounded a curve. The vehicle passed through withdrew its opinion of March 27, 2009 and the gap and into the Guadalupe River. Courtney issued a new opinion on rehearing. The parties was unable to free herself from the vehicle, and then filed a second motion for rehearing, which she drowned. Courtney’s family brought wrongful was denied, but the Court withdrew the previous death claims against a number of parties, including opinion and replaced it. The Court’s judgment, Allen Keller. However, with the exception of was unchanged. Allen Keller, the other parties were dropped from The primary issue in this case is whether suit. material misrepresentations in Railroad The trial court granted summary judgment in Commission filings is evidence of the intent-to- favor of Allen Keller. On appeal, the court of induce reliance element of fraud. Emerald, a appeals held that Allen Keller was not entitled to mineral lessee and the royalty owners sued Exxon, summary judgment because its summary judgment a prior lessee, for alleged wrongful conduct in the motion, in which it argued it owed no duty to development and subsequent abandonment of two Courtney, failed to address whether it had created oil and gas tracts. They alleged claims of: the dangerous condition that ultimately led to (1) breach of a duty to plug the wells properly, Courtney’s death. The court of appeals further (2) breach of a duty to avoid committing waste, held that it was foreseeable that a motorist might (3) negligence per se in violating several sections deviate from the roadway while proceeding in the of the Natural Resources Code and Commission ordinary course of travel. The Supreme Court Regulations, (4) tortious interference with

16 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 economic opportunity, (5) negligent On rehearing, the Court clarified the basis for misrepresentation, and (6) fraud. The royalty holding that the royalty owners’ breach of lease owners also sued Exxon separately for the same claims were insufficient as a matter of law, claims as well as breach of contract. examining a number of articles purporting to The trial court granted Exxon’s motion for impact Exxon’s development obligation in the summary judgement as to all of Emerald’s claims lease. It provided additional record evidence except fraud, negligent misrepresentation, and demonstrating the Emerald’s and the royalty tortious interference; those claims were disposed owners’ actual knowledge of the facts constituting of in a companion case, Exxon Corp. v. Emerald the royalty owners’ waste and Emerald’s Oil & Gas Co., 331 S.W.3d 419 (Tex. 2010) negligence claims. However, it remanded the case (reh’g op.). back to the court of appeals to (1) consider the At trial, Exxon obtained a directed verdict on royalty owners’ claims of breach of regulatory Emerald’s remaining claims and all of the royalty duty, fraud, negligent misrepresentation and owners’ claims except common law and statutory negligence, as the trial court granted Exxon a waste and breach of lease. The jury found in favor directed verdict on those claims, the royalty of the royalty owners on the causes of action for owners conditionally challenged them at the court waste and breach of lease. All parties appealed. of appeals but did not brief them here, and The court of appeals affirmed the judgment in because the royalty owners were successful at the favor of the royalty owners, reversed the directed court of appeals, that court did not consider the verdict against Emerald, and remanded Emerald’s issues conditionally challenged; and (2) remand claims for a new trial. Exxon petitioned the Court the case to the trial court for consideration of for review. Emerald’s fraud claim. The Court held that there was no evidence to On second rehearing, the Court clarified the support the royalty owners’ claim that Exxon ambiguity that exists in the record regarding breached its lease for failure to comply with its Emerald’s predecessor, important in the development clause. The Court also dismissed the determination of whether Exxon knew of an royalty owners’ claims of statutory and common “especial likelihood” of reliance by Emerald when law waste, as well as Emerald’s negligence per se, filing the allegedly false plugging reports, an negligent misrepresentation, and tortious element of Emerald’s fraud claims that were interference claims, because Emerald had actual remanded to lower courts. knowledge of the claims more than two to four years prior to filing suit, and the statute of B. Royalty Payments limitations barred the claims. 1. Tawes v. Barnes, S.W.3d , 54 Tex. Sup. Finally, the Court held that there was some Ct. J. 857 (Tex. April 15, 2011) [10-0581]. evidence to support Emerald’s fraud claim that In this case, the Supreme Court of Texas Exxon made material misrepresentations in its addressed a question certified by the United States filings to the Railroad Commission, and the Court Court of Appeals for the Fifth Circuit regarding explained that the mere fact that royalty owners the construction of an oil and gas Working and subsequent lessees might or should rely on Interest Unit Agreement (WIUA) and a Joint statements in Exxon’s plugging reports alone is Operating Agreement (JOA) entered into by insufficient to establish an intent-to-induce parties to a natural gas drilling operation. The reliance element of fraud. However, because Fifth Circuit asked whether a lessor—either as a Exxon specifically knew that there was an especial third-party beneficiary or through privity of likelihood that Emerald and the royalty owners estate—could recover unpaid royalties from an would rely on the filings, there was legally investor in the drilling operations by enforcing the sufficient evidence to support the intent-to-induce terms of a WIUA and a JOA which her lessee and reliance element of fraud. Accordingly, the Court the investor both signed. Two additional certified reversed the trial court’s grant of directed verdict questions were not addressed by the Supreme on the fraud claim and remanded the claim for Court as they were made moot when it answered further proceedings. the first question in the negative.

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Doris Barnes and her husband entered an oil C. Subsurface Trespass and gas lease with Dominion. Dominion, in turn, 1. FPL Farming Ltd. v. Envtl. Processing Sys., entered a joint drilling venture with several other L.C., 305 S.W.3d 739 (Tex. App.—Beaumont parties, including Lee Tawes. The WIUA and 2009), pet. granted, 54 Tex. Sup. Ct. J. 538 JOA, which Dominion and Tawes both signed, (February 8, 2011) [09-1010]. contained a non-consent provision which allowed At issue in this case is whether subsurface parties to the agreements to opt-out of drilling a injection of wastewater pursuant to a permit proposed well by temporarily relinquishing their granted by an administrative agency immunizes interests in the well to the parties who consented the permit holder from trespass liability when to the drilling. During this time, in exchange for wastewater migrates beneath the land of a the non-consenting parties’ interests in the well, neighboring property owner. Also at issue is the consenting parties would cover all drilling and whether such migration can constitute a trespass. operating expenses associated with the well. Such Further, if it can be a trespass and the permit expenses included the payment of lessors’ holder is immune, does the Injection Well Act royalties on production due under the terms of the violate the Takings Clause of the U.S. oil and gas leases the non-consenting parties Constitution or article I, section 17 of the Texas contributed to the drilling venture. Two gas wells Constitution? were proposed. Tawes and several other parties Environmental Processing Systems obtained consented to drilling the wells, but Dominion did permits for two wastewater injection wells to be not. Tawes, an investor only, never operated operated near FPL Farming’s land. FPL requested either of the non-consent wells. When production a contested case hearing to oppose the permits, was realized on the non-consent wells, Barnes did but ultimately settled with EPS and withdrew its not receive the royalties she was owed pursuant to hearing request. EPS later sought to amend the her lease. After settling with Dominion and other permits to increase the allowed injection rate, and parties, Barnes sought to recover from Tawes the FPL once again requested a contested case remainder of the royalties she believed she was hearing. At the hearing, the administrative law owed by attempting to enforce the terms of the judge recommended that the amendments be WIUA and JOA as a third-party beneficiary to the granted, and they were. FPL appealed to the agreements, or alternatively, by virtue of her Travis County district court, which affirmed the alleged privity of estate with Tawes. Federal Commission’s decision, and the Austin Court of bankruptcy and district courts both determined Appeals also affirmed. However, the court of Barnes to be a third-party beneficiary of the appeals assumed without deciding that FPL had agreements and held Tawes liable for her unpaid rights in the subsurface of its land and would have royalties. standing to sue seeking damages if the wastewater The Supreme Court, however, held that migrated under FPL’s land. Barnes could not enforce the WIUA and JOA as a Several years later, FPL sued EPS in Liberty third-party beneficiary because the agreements, County, arguing that the wastewater had migrated customarily used by members of the oil and gas below its land and seeking injunctive relief and industry, were entered into for the purpose of alleging trespass, negligence, and unjust allocating costs and production among the parties enrichment. The jury rejected FPL’s claims, and to the drilling venture, not to directly benefit a take-nothing judgment the trial court entered Barnes. Therefore, any benefit received by Barnes against FPL. FPL appealed, complaining of three was merely incidental, not intended, as is required errors related to the trespass claim and contending to confer third-party beneficiary status. The that there was no evidence to support the jury’s Supreme Court also held that Barnes could not findings rejecting FPL’s trespass, negligence and prevail on her privity of estate theory because unjust enrichment claims. The CA affirmed the Tawes did not permanently acquire Dominion’s judgment, holding that “under the common law, interest in the well when Dominion did not when a state agency has authorized deep consent or contractually agree to pay royalties subsurface injections, no trespass occurs when directly to Barnes. fluids that were injected at deep levels are then

18 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 alleged to have later migrated at those deep levels no relief. They then petitioned the Supreme Court into the deep subsurface of nearby tracts.” As the for mandamus. CA held there was no trespass, it did not reach the The Court conditionally granted mandamus, issues presented by FPL on the trespass claim. In holding, in a per curiam opinion, that the trial addition, the CA concluded that FPL did not show court abused its discretion in granting Klein’s that the evidence was factually insufficient to companies’ motion to compel discovery. Rule support the jury’s findings rejecting FPL’s claims 202 requires that the trial court find that “allowing for trespass, negligence, and unjust enrichment. the petitioner to take the requested deposition may FPL sought review in the Supreme Court. prevent a failure or delay of justice in the The Supreme Court granted FPL’s petition, and anticipated suit” or that “the likely benefit of heard oral argument on March 1, 2011. allowing the petitioner to take the requested deposition to investigate a potential claim XVIII. PROCEDURE—PRETRIAL outweighs the burden or expense of the A. Discovery procedure.” TEX. R. CIV. P. 202.4(a). The trial 1. In re John Does 1 & 2, S.W.3d , 54 Tex. court did not make any such findings prior to Sup. Ct. J. 855 (Tex. April 15, 2011) [10-0366]. ordering discovery, and it therefore abused its At issue in this case was whether the trial discretion in denying the bloggers’ motion to court abused its discretion in granting petitioners’ quash the subpoena. Rule 202 motion to compel disclosure of the identities of two anonymous bloggers. Two B. Dismissal companies owned by Philip Klein, who operates a 1. Roccaforte v. Jefferson Cnty., S.W.3d , 54 blog featuring political commentary, brought a Tex. Sup. Ct. J. 900 (Tex. April 29, 2011) [09- Rule 202 action to discover the identities of two 0326]. anonymous bloggers who had extensively At issue in this case is whether a proceeding criticized Klein. Klein hoped to uncover filed against a county must strictly adhere to the information to prepare for possible defamation, notice requirements under Local Government invasion of privacy, and copyright infringement Code section 89.0041. Roccaforte, a Deputy actions against the bloggers. Klein’s companies Constable for Jefferson County, sued the County served a Rule 202 petition on Google, which and its Constable, alleging wrongful termination. hosted the blogs. Before seeking a court order Roccaforte did not send written notice to the compelling Google to submit to a deposition at County according to the terms of section 89.0041, which it would disclose the bloggers’ identities, and instead personally served the County judge Klein’s companies entered into a Rule 11 with the suit. Fifteen days later, the County agreement with Google, in which the companies answered, denying liability. Months later, the would serve a subpoena on Google, which would County filed a plea to the jurisdiction and the trial then provide the requested information. However, court dismissed the suit for lack of subject matter Google notified the bloggers of Klein’s attempts jurisdiction based on section 89.0041. The court to obtain their identities, and the bloggers, acting of appeals affirmed the dismissal, holding that through their blogs, filed objections and motions 89.0041 was to be strictly construed, and to quash the subpoena, arguing that disclosure was contained no notice exceptions as Roccaforte had not authorized under Rule 202 of the Texas Rules argued. The court of appeals also rejected of Civil Procedure and that disclosure would Roccaforte’s arguments that section 89.0041 violate the bloggers’ constitutional rights to applied to contractual claims exclusively, and that anonymous speech. At a hearing, the trial court 42 U.S.C. § 1983 preempted the notice denied the blogs’ motions to quash and granted requirements of section 89.0041. Klein’s companies’ motion to compel discovery, The Supreme Court reversed the court of though the court did not make any factual findings appeals’ judgment and concluded that when in support of its order. The bloggers sought requisite county officials receive timely notice mandamus from the court of appeals, but obtained enabling them to answer and defend a particular claim, the case should not be dismissed merely

19 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 because of a procedural technicality. Despite the area. Young was discharged with instructions to fact that Roccaforte failed to comply with the watch for “pain not relieved by medication strict terms of section 89.0041, the County still ordered,” and a general admonition to notify his received adequate notice of the suit and responded doctor if he had any problem or questions. That to the claims appropriately. Therefore, the Court evening, Young suffered from nausea and back held that Roccaforte fulfilled the notice and groin pain. Shortly after 11 p.m., he called requirement. Moreover, the Court also determined out for his wife because he had fallen and could that section 89.0041’s overall purpose was met not stand. After thirty minutes of arguing, Young here, as it “was not intended to create a procedural gave up his objections to calling 911. The trap allowing a county to obtain dismissal even surgeon who operated found a tear of an artery though the appropriate officials have notice of the near the incision Thota had made. Young suit.” Because the County had actual notice, the underwent months of hospitalization and Court concluded that the trial court erred in rehabilitation. dismissing Roccaforte’s claims. Young later died, and his wife brought this Justice Willett concurred, but argued that the survival suit, alleging that Thota failed to main question should be rephrased to assess not correctly place the catheterization incision. Thota whether the Legislature meant to bar Roccaforte’s disputed negligence on his part and also claim using restrictive language in section contended that Young, though he was in pain, was 89.0041, but instead whether the County slow to call for help or return to the hospital, even effectively waived Roccaforte’s noncompliance though his discharge instructions directed him to with section 89.0041. He determined that it did notify his doctor of any problem. Thota also because there was no timely assertion. The argued that the bleed was caused by a new and County waited more than two years after filing its independent cause—a clot—and was an answer, filing special exceptions, and presenting unavoidable accident. three County officials for depositions to assert any The trial court submitted the case on a reference to 89.0041. Accordingly, Justice Willett question asking if “the negligence, if any, of wrote that the County’s insistence on dismissal those named below, proximately caused the injury given its decision to defend the case for so long in question, if any.” Thota and Young were materially prejudiced Roccaforte. named, with separate answer lines for a “yes” or “no.” Several instructions were included with the XIX. PROCEDURE—TRIAL AND question, including instructions on new and POST-TRIAL independent cause and unavoidable accident. The A. Jury Instructions and Questions jury found that Thota was not negligent and 1. Thota v. Young, 271 S.W.3d 822 (Tex. App. Young was negligent, resulting in a take-nothing —Fort Worth 2008), pet. granted, 54 Tex. Sup. judgment. Ct. J. 682 (March 18, 2011) [09-0079]. The court of appeals reversed and remanded, The issues in this medical malpractice suit holding that the broad form negligence question concern whether the trial court erred in submitting improperly commingled valid and invalid theories the doctor and patient’s negligence in one of negligence, since one theory went to the injury question, with inferential rebuttal instructions on and the other to the amount of damages, and that “new and independent cause” and “unavoidable harm from these commingled theories was accident,” when plaintiff’s theory was that the exacerbated by the inclusion of inferential rebuttal doctor was negligent in nicking an artery, causing instructions. The dissent argued that there was no post-operative bleeding, and the doctor, instead of error, that even if there was error it was harmless, claiming that the patient caused the bleed, argued and that error should not be presumed. only that the patient, after discharge, was Thota filed a petition for review challenging negligently slow in calling for help. the holdings of the court of appeals. The Supreme William Young sought treatment for chest Court granted the petition. Oral argument has not pain. Dr. Thota performed a diagnostic cardiac yet been scheduled. catheterization, making an incision in the pelvic

20 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

B. New Trial Orders plant for the City’s electric utility and a parking 1. In re United Scaffolding, Inc., 315 S.W.3d 246 garage to service the nearby convention center. (Tex. App.—Beaumont 2010), argument granted During negotiations prior to the condemnation, on pet. for writ of mandamus, 54 Tex. Sup. Ct. J. City officials told the Whittingtons that it was 538 (February 8, 2011) [10-0526]. absolutely necessary to build the chilled water At issue in this case is whether a trial judge plant on the Whittingtons’ land, but internal abused his discretion by failing to specify reasons communications between city officials indicated for granting a new trial. An employee sued United that this location was not absolutely necessary, Scaffolding, claiming he was injured while but still beneficial. Additionally, the City had working on a scaffold. After a week-long trial, a contracted with a hotel developer for the jury awarded the employee damages for future construction of a garage that would provide medical expenses. However, the employee sought parking for both a hotel and the convention center, additional damages, and moved for a new trial. but the City allowed the hotel to build a smaller The trial judge granted this motion, but only stated garage than originally planned, giving rise to the that a new trial was warranted “in the interest of need for an additional parking facility, which the justice and fairness.” United Scaffolding filed a City built on land previously owned by the petition for writ of mandamus, and the Supreme Whittingtons. The Whittingtons challenged the Court ordered the trial judge to specify his reasons validity of the condemnation, alleging that the for granting a new trial. parking garage and chilled water plant were not In response, the trial judge issued a new public uses, but instead were for private economic order. This order listed four reasons for granting development purposes. The Whittingtons also a new trial, three of which were followed by argued that the City had acted in bad faith, “and/or.” Also, one of the reasons was “in the fraudulently, and arbitrarily and capriciously by interest of justice and fairness,” which the using the Whittingtons’ land for the garage, rather Supreme Court previously rejected. A divided than holding the hotel developer to its obligation court of appeals found that this new order was to build an adequate garage and by reasonably specific and complied with the misrepresenting the necessity of constructing the Supreme Court’s mandate. United Scaffolding chilled water plant on the Whittingtons’ land. The then filed a petition for writ of mandamus, jury returned a verdict for the Whittingtons, claiming the new order inadequately explained the finding that (1) the condemnation was not grounds for granting a new trial. necessary to advance or achieve a public purpose; The Supreme Court granted argument on the (2) the condemnation was for economic petition for writ of mandamus. The Court has not development purposes; and (3) the City acted in yet set the date for oral argument. bad faith, fraudulently, or arbitrarily and capriciously. The trial court partially granted the XX. REAL PROPERTY City’s motion for judgment notwithstanding the A. Eminent Domain verdict and set aside the jury’s verdict as to the 1. City of Austin v. Whittington, 2010 WL first two questions. But the trial court entered 567153 (Tex. App.—Austin 2010), pet. granted, judgment for the Whittingtons because it held that 54 Tex. Sup. Ct. J. 811 (Tex. April 15, 2011) [10- the jury’s verdict on the third question was 0316]. factually and legally sufficient and that this At issue in this case is whether the City of finding alone could sustain the judgment. The Austin validly condemned the Whittingtons’ court of appeals affirmed. property, when the Whittingtons alleged that the The Supreme Court granted the City’s City did not condemn the land for a public petition for review. Oral argument has not yet purpose and that the City’s actions were been scheduled. fraudulent, arbitrary and capricious, and made in bad faith. In 2001, the City of Austin condemned the Whittingtons’ property to build a chilled water

21 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

2. Tex. Rice Land Partners, Ltd. v. Denbury wrongful imprisonment under the Tim Cole Act. Green Pipeline-Tex. LLC, 296 S.W.3d 877 (Tex. TEX. CIV. PRAC. & REM. CODE § 103.001(a). App.—Beaumont 2009), pet. granted, 54 Tex. Application is made to the Texas Comptroller of Sup. Ct. J. 538 (February 11, 2011) [09-0901]. Public Accounts, who is authorized to determine At issue in this case is whether a pipeline eligibility and the amount owed. If the claimant company proved that its pipeline would be would have been in prison anyway under a available for public use, and whether that showing concurrent sentence, he cannot recover for the was enough to make it a common carrier and to over-lapping period of wrongful imprisonment grant the company eminent domain powers under the Act’s concurrent-sentence restriction. pursuant to the Texas Natural Resources Code. If the Comptroller misapplies the Act, a claimant Texas Rice Land Partners, Ltd., repeatedly refused may seek review through an original mandamus to allow Denbury Green Pipeline-Texas LLC to proceeding in the Supreme Court. enter Texas Rice’s property to conduct surveys for In this case, the claimant was on parole when the location and placement of a carbon dioxide he was wrongfully convicted and imprisoned for pipeline. Denbury sought a restraining order to an unrelated crime. His parole was revoked based prevent Texas Rice from interfering with on the wrongful conviction and the Comptroller Denbury’s right to enter the property as a common used the resulting concurrent sentence to reduce carrier. Both parties moved for summary his award. The claimant sought review by judgment on the questions of law surrounding the mandamus, arguing that the concurrent-sentence pipeline’s proposed use and Denbury’s authority restriction should not apply under these to condemn. circumstances because he would not have been in The court of appeals affirmed by split prison but for the wrongful conviction. The decision the trial court’s order denying Texas Supreme Court agreed, holding that the Rice’s motion and granting Denbury’s motion. concurrent-sentence restriction does not apply The court concluded that Denbury proved that its when the wrongful conviction is the cause of the pipeline would be available for public use from person serving a concurrent sentence in prison. the outset of its operation, and therefore The Court conditionally granted the writ because established its common carrier status as a matter a parolee, whose parole is revoked because of a of law. As a result, Denbury had the power of wrongful conviction, is entitled to compensation eminent domain. under the Tim Cole Act for the period of Texas Rice filed a petition for review and imprisonment the parolee would have otherwise argued that Denbury failed to establish its served out of prison on parole. common carrier status. Texas Rice contended that in order for a company to prove its common XXII. WORKERS’ COMPENSATION carrier status and obtain the power of eminent A. Retaliation Claims domain, the pipeline must actually—not just 1. Travis Cent. Appraisal Dist. v. Norman, theoretically—be operated “to or for the public for S.W.3d , 54 Tex. Sup. Ct. J. 891 (Tex. April hire.” Denbury, however, interpreted the statute 29, 2011) [09-0100]. to only require making its pipeline available to the At issue in this case is whether amendments public, and therefore the statute did not require to chapter 451 of the Texas Labor Code supercede proof of current public use. The Supreme Court the Supreme Court’s decision in City of LaPorte granted Texas Rice’s petition for review and heard v. Barfield, 898 S.W.2d 288 (Tex. 1995). The oral argument on April 19, 2011. Texas Anti-Retaliation Law, Chapter 451 of the Texas Labor Code, prohibits an employer from XXI. TIM COLE ACT discharging or discriminating against an employee A. Concurrent Sentences Restriction who in good faith files a workers’ compensation 1. In re Smith, 333 S.W.3d 582 (Tex. March 4, claim. See TEX. LAB. CODE § 451.001(1). In City 2011) [10-0048]. of LaPorte v. Barfield, the Supreme Court held A wrongfully-imprisoned person may seek that such a claim could be brought against the compensation from the state for the period of government because the anti-retaliation law

22 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3 applied to the state’s political subdivisions through Chapter 504 of the Labor Code. 898 S.W.2d at 298-99 (holding that Chapter 504 waives the governmental immunity of political subdivisions for retaliatory discharge claims under Chapter 451). In this interlocutory appeal, the City argued that Chapter 504 has been amended since the Court’s decision in Barfield and no longer waives the government’s immunity for retaliatory discharge claims under Chapter 451. After examining its decision in Barfield and subsequent amendments to the Labor Code, the Court agreed that Barfield’s reasoning had been superseded by the Legislature’s addition of the following amendment to Chapter 504: “Nothing in this chapter waives sovereign immunity or creates a new cause of action.” TEX. LAB. CODE § 504.053(e). Because a retaliatory discharge claim may not be brought against the government without its consent and Chapter 504 no longer provides such consent by waiving the government’s immunity, the Court concluded that the employee’s underlying claim in the case had to be dismissed.

23 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Index

Allen Keller Co. v. Foreman ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 850 (Tex. April 15, 2011) [09-0955]...... 15

Basic Capital Mgmt., Inc. v. Dynex Commercial, Inc. ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 781 (Tex. April 1, 2011) [08-0244]...... 6

Burlington N. & Santa Fe Ry. Co. v. Nat’l Union Fire Ins. Co. 334 S.W.3d 217 (Tex. February 25, 2011) [10-0064]...... 10

Carreras v. Marroquin ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 788 (Tex. April 1, 2011) [09-0857]...... 15

City of Austin v. Whittington 2010 WL 567153 (Tex. App.—Austin 2010), pet. granted, 54 Tex. Sup. Ct. J. 811 (Tex. April 15, 2011) [10-0316]...... 21

City of Houston v. Williams ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 713 (Tex. March 18, 2011) [09-0770]...... 9

El Apple I, Ltd. v. Olivas 324 S.W.3d 181 (Tex. App.—El Paso 2010), pet. granted, 54 Tex. Sup. Ct. J. 561 (February 25, 2011) [10-0490]...... 4

Ellis v. Schlimmer ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 793 (Tex. April 1, 2011) [10-0243]...... 3

Exxon Corp. v. Miesch ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 761 (Tex. April 1, 2011) [05-1076]...... 16

Fin. Comm’n of Tex. v. Norwood 303 S.W.3d 404 (Tex. App.—Austin 2010), pet granted, 54 Tex. Sup. Ct. J. 561 (February 25, 2011) [10-0121]...... 1

FPL Farming Ltd. v. Envtl. Processing Sys., L.C. 305 S.W.3d 739 (Tex. App.—Beaumont 2009), pet. granted, 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [09-1010]...... 18

Ghazali v. Brown 307 S.W.3d 499 (Tex. App.—Fort Worth 2010), pet. granted, 54 Tex. Sup. Ct. J. 537, 538 (February 8, 2011) [10-0232]...... 12

Iliff v. Iliff ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 843 (Tex. April 15, 2011) [09-0753]...... 9

In re Commitment of Hill 334 S.W.3d 226 (Tex. March 11, 2011) [10-0280]...... 15

24 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

In re John Does 1 & 2 ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 855 (Tex. April 15, 2011) [10-0366]...... 19

In re Rubiola 334 S.W.3d 220 (Tex. March 11, 2011) [09-0309]...... 3

In re Smith 333 S.W.3d 582 (Tex. March 4, 2011) [10-0048]...... 22

In re United Scaffolding, Inc. 315 S.W.3d 246 (Tex. App.—Beaumont 2010), argument granted on pet. for writ of mandamus, 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [10-0526]...... 21

Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am. ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 822 (Tex. April 15, 2011) [08-0989]...... 5

Loftin v. Lee ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 895 (Tex. April 29, 2011) [09-0313]...... 7

Minton v. Gunn 301 S.W.3d 702 (Tex. App.—Fort Worth 2009), pet. granted, 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [10-0141]...... 10

Mitchell v. The Methodist Hosp. ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 669 (Tex. March 11, 2011) [10-0117]...... 11

Prairie View A&M Univ. v. Chatha 317 S.W.3d 402 (Tex. App.—Houston [1st Dist.] 2010), pet granted, 54 Tex. Sup. Ct. J. 561 (February 25, 2011) [10-0353]...... 7

R.R. Comm’n of Tex. v. Tex. Citizens for a Safe Future & Clean Water ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 642 (Tex. March 11, 2011) [08-0497]...... 2

Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd. ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 658 (Tex. March 11, 2011) [09-0396]...... 8

Roccaforte v. Jefferson Cnty. ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 900 (Tex. April 29, 2011) [09-0326]...... 19

Safeshred, Inc. v. Martinez 310 S.W.3d 649 (Tex. App.—Austin 2010), pet granted, 54 Tex. Sup. Ct. J. 633 (March 11, 2011) [10-0426]...... 6

Samlowski v. Wooten 332 S.W.3d 404 (Tex. February 25, 2011) [08-0667]...... 11

State v. Pub. Util. Comm’n ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 690 (Tex. March 18, 2011) [08-0421]...... 2

25 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Stockton v. Offenbach ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 590 (Tex. February 25, 2011) [09-0446]...... 12

Tawes v. Barnes ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 857 (Tex. April 15, 2011) [10-0581]...... 17

Tex. Dep’t of Pub. Safety v. Caruana 2010 WL 522783, (Tex. App.—Austin 2010) pet. granted, 54 Tex. Sup. Ct. J. 538 (February 8, 2011) [10-0321]...... 1

Tex. Elec. Util. Constr., Ltd. v. Infrasource Underground Constr. Servs., L.L.C. 2010 WL 2638066 (Tex. App.—Tyler 2010), pet. granted, 54 Tex. Sup. Ct. J. 881 (April 29, 2011) [10-0628]...... 4

Tex. Rice Land Partners, Ltd. v. Denbury Green Pipeline-Tex. LLC 296 S.W.3d 877 (Tex. App.—Beaumont 2009), pet. granted, 54 Tex. Sup. Ct. J. 538 (February 11, 2011) [09-0901]...... 22

Tex. West Oaks Hosp., LP v. Williams 322 S.W.3d 349 (Tex. App.—Houston [14th Dist.] 2010), pet. granted, 54 Tex. Sup. Ct. J. 750 (April 1, 2011) [10-0603]...... 13

Thota v. Young 271 S.W.3d 822 (Tex. App. —Fort Worth 2008), pet. granted, 54 Tex. Sup. Ct. J. 682 (March 18, 2011) [09-0079]...... 20

Travis Cent. Appraisal Dist. v. Norman ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 891 (Tex. April 29, 2011) [09-0100]...... 22

Turtle Healthcare Grp. v. Linan ___ S.W.3d ___, 54 Tex. Sup. Ct. J. 911 (Tex. April 29, 2011) [09-0613]...... 13

Wasserman v. Gugel 2010 WL 1992622 (Tex. App.—Houston [14th Dist.] 2010), pet. granted, 54 Tex. Sup. Ct. J. 750 (Tex. April 1, 2011) [10-0513]...... 14

26 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

IN THE SUPREME COURT OF TEXAS

Misc. DocketNo. 10- 9210

AMENDMENTS TO TEXAS RULES OF CIVIL PROCEDURE 281 AND 284 AND TO THE JURY INSTRUCTIONS UNDER TEXAS RULE OF CIVIL PROCEDURE 226A

ORDERED that:

1. Pursuant to Section 22.004of the Texas Government Code, the Supreme Court of Texas amends Texas Rules of Civil Procedure281 and 284, as follows.

2. TheSupreme Court of Texas also amends the jury instructions thatare prescribed by Order of this Court under Texas Rule of Civil Procedure 226a, as follows.

3. Rules 281 and 284 and the Rule 226a instructions, with any modifications made after public comments are received, take effect April 1, 2011. Comments regarding this Order may be submitted to the Supreme Court of Texas in writing on or before March 4,2011. Comments should be directed to Kennon L. Peterson, Rules Attorney, at P.O. Box 12248, Austin, TX 78711, or [email protected].

4. The Clerk is directed to:

a. file a copy of this Order with the Secretary of State;

b. cause a copy of this Order to be mailed to each registered member of the State Bar of Texas by publication in the Texas Bar Journal;

c. send a copy of this Order to each elected member of the Legislature; and

d. submit a copy of the Order for publication in the Texas Register.

Dated: December 13, 2010.

27 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

k-dJ* Wallace B. Jefferson, Chief/ju^ice

Nathan L. Hecht, Justice

Dale Wainwright, Justiceice /J

DaVid M. Medina, Justic

Paul W. Green, Justice

Phil Johnson, Justice

Don R. Willett, Justice

Debra H. Lehrmann, Justice

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28 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Rule 281. Papers Taken to Jury Room

With the court's permission. ¥the jury may take with them to the jury room any notes they took during the trial. In addition, the jury may, and on request shall, take with them in their retirement the charges and instructions, general or special, which were given and read to them, and any written evidence, except the depositions of witnesses, but shall not take with them any special charges which have been refused. Where only parttmiy of a paper has been read in evidence, the jury shall not take the same with them, unless the part so read to them is detached from that which was excluded.

Rule 284. Judge to Caution Jury

Immediately after jurors are selected for a case, the court must instruct them to turn off their cell phones and other electronic devices and not to communicate with anyone through any electronic device while they are in the courtroom or while they are deliberating. The court must also instruct them that, while they are serving as jurors, they must not post any information about the case on the Internet or search for any information outside of the courtroom, including on the Internet, to try to learn more about the case.

If jurors are permitted to separate before they are released from jury duty, either during the trial or after the case is submitted to them, the jury shall be admonished by the court must instruct them that it is their duty not to communicate converse with, or permit themselves to be addressed bya any other personron about any subject connected with relating to the^trial case.

Jury Instructions Prescribed by Order Under Rule 226a [proposed amendments are not redlined; brackets indicate optional and instructive text]

I.

That the following oral instructions, with such modifications as the circumstances of the particular case may require, shall be given by the court to the jurors after they have been sworn in as provided in Rule 226 and before the voir dire examination:

Members of the Jury Panel [or Ladies and Gentlemen of the Jury Panel]:

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29 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Thank you for being here. We are here to select a jury. Twelve [six] of you will be chosen for the jury. Even if you are not chosen for the jury, you are performing a valuable service that is your right and duty as a citizen of a free country.

Before we begin: Turn off all cell phones and other electronic devices. While you are in the courtroom, do not communicate with anyone through any electronic device. [For example, do not communicate by phone, text message, email message, chat room, blog, or social networking websites such as Facebook, Twitter, or Myspace.] [I will give you a number where others may contact you in case of an emergency.] Do not record or photograph any part of these court proceedings, because it is prohibited by law.

Here is some background about this case. This is a civil case. It is a lawsuit that is not a criminal case. The parties are as follows: The plaintiff is , and the defendant is . Representing the plaintiff is , and representing the defendant is . They will ask you some questions during jury selection. But before their questions begin, I must give you some instructions for jury selection.

Every juror must obey these instructions. You may be called into court to testify about any violations of these instructions. If you do not follow these instructions, you will be guilty of juror misconduct, and I might have to order a new trial and start this process over again. This would waste your time and the parties' money, and would require the taxpayers of this county to pay for another trial.

These are the instructions:

1. To avoid looking like you are friendly with one side of the case, do not mingle or talk with the lawyers, witnesses, parties, or anyone else involved in the case. You may exchange casual greetings like "hello" and "good morning." Other than that, do not talk with them at all. They have to follow these instructions too, so you should not be offended when they follow the instructions.

2. Do not accept any favors from the lawyers, witnesses, parties, or anyone else involved in the case, and do not do any favors for them. This includes favors such as giving rides and food.

3. Do not discuss this case with anyone, even your spouse or a friend, either in person or by any other means [including by phone, text message, email message, chat room, blog, or social networking websites such as Facebook, Twitter, or Myspace]. Do not allow anyone to discuss the case with you or in your hearing. If anyone tries to discuss the case with you or in your hearing, tell me immediately. We do not want you to be influenced by something other than the evidence admitted in court. Misc. Docket No. 10 J 21 0 Page 4

30 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

4. The parties, through their attorneys, have the right to ask you questions about your background, experiences, and attitudes. They are not trying to meddle in your affairs. They are just being thorough and trying to choose fair jurors who do not have any bias or prejudice in this particular case.

5. Remember that you took an oath that you will tell the truth, so be truthful when the lawyers ask you questions, and always give complete answers. If you do not answer a question that applies to you, that violates your oath. Sometimes a lawyer will ask a question of the whole panel instead ofjust one person. If the question applies to you, raise your hand and keep it raised until you are called on.

Do you understand these instructions? If you do not, please tell me now.

The lawyers will now begin to ask their questions.

II.

That the following oral and written instructions, with such modifications as the circumstances of the particular case may require, shall be given by the court to the jury immediately after the jurors are selected for the case:

Members of the Jury [or Ladies and Gentlemen]:

You have been chosen to serve on this jury. Because of the oath you have taken and your selection for the jury, you become officials of this court and active participants in our justice system.

[Hand out the written instructions.]

You have each received a set of written instructions. I am going to read them with you now. Some of them you have heard before and some are new.

1. Turn off all cell phones and other electronic devices. While you are in the courtroom and while you are deliberating, do not communicate with anyone through any electronic device. [For example, do not communicate by phone, text message, email message, chat room, blog, or social networking websites such as Facebook, Twitter, or Myspace.] [I will give you a number where others may contact you in case of an emergency.] Do not post information about the case on the Internet before these court proceedings end and you are released from jury duty. Do not record or photograph any part of these court proceedings, because it is prohibited by law.

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31 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

2. To avoid looking like you are friendly with one side of the case, do not mingle or talk with the lawyers, witnesses, parties, or anyone else involved in the case. You may exchange casual greetings like "hello" and "good morning." Other than that, do not talk with them at all. They have to follow these instructions too, so you should not be offended when they follow the instructions.

3. Do not accept any favors from the lawyers, witnesses, parties, or anyone else involved in the case, and do not do any favors for them. This includes favors such as giving rides and food.

4. Do not discuss this case with anyone, even your spouse or a friend, either in person or by any other means [including by phone, text message, email message, chat room, blog, or social networking websites such as Facebook, Twitter, or Myspace]. Do not allow anyone to discuss the case with you or in your hearing. If anyone tries to discuss the case with you or in your hearing, tell me immediately. We do not want you to be influenced by something other than the evidence admitted in court.

5. Do not talk about the case with anyone during the trial, not even with the other jurors, until the end of the trial. You should not discuss the case with your fellow jurors until the end of the trial so that you do not form opinions about the case before you have heard everything.

After you have heard all the evidence, received all of my instructions, and heard all of the lawyers' arguments, you will then go to the jury room to discuss the case with the other jurors and reach a verdict.

6. Do not investigate this case on your own. For example:

a. Do not try to get information about the case, lawyers, witnesses, or issues from outside this courtroom. b. Do not go to places mentioned in the case to inspect the places. c. Do not inspect items mentioned in this case unless they are presented as evidence in

court. d. Do not look anything up in a law book, dictionary, or public record to try to learn more about the case. e. Do not look anything up on the Internet to try to learn more about the case. f. And do not let anyone else do any of these things for you.

This rule is very important because we want a trial based only on evidence presented in open court. Your conclusions about this case must be based only on what you see and hear in this courtroom because the law does not permit you to base your conclusions on information that has not been presented to you in open court. All the information must be presented in open court so the Misc. Docket No. 10 -9 21 0 Page 6

32 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

parties and their lawyers can test it and object to it. Information from other sources, like the Internet, will not go through this important process in the courtroom. In addition, information from other sources could be completely unreliable. As a result, if you investigate this case on your own, you could compromise the fairness to all parties in this case and jeopardize the results of this trial.

7. Do not tell other jurors your own experiences or other people's experiences. For example, you may have special knowledge of something in the case, such as business, technical, or professional information. You may even have expert knowledge or opinions, or you may know what happened in this case or another similar case. Do not tell the other jurors about it. Telling other jurors about it is wrong because it means the jury will be considering things that were not presented in court.

8. Do not consider attorneys' fees unless I tell you to. Do not guess about attorneys' fees.

9. Do not consider or guess whether any party is covered by insurance unless I tell you to.

10. During the trial, if taking notes will help focus your attention on the evidence, you may take notes using the materials the court has provided. Do not use any personal electronic devices to take notes. If taking notes will distract your attention from the evidence, you should not take notes. Your notes are for your own personal use. They are not evidence. Do not show or read your notes to anyone, including other jurors.

You must leave your notes in the jury room or with the bailiff. The bailiff is instructed not to read your notes and to give your notes to me promptly after collecting them from you. I will make sure your notes are kept in a safe, secure location and not disclosed to anyone.

[You may take your notes back into the jury room and consult them during deliberations. But keep in mind that your notes are not evidence. When you deliberate, each of you should rely on your independent recollection of the evidence and not be influenced by the fact that another juror has or has not taken notes. After you complete your deliberations, the bailiff will collect your notes.]

When you are released from jury duty, the bailiff will promptly destroy your notes so that nobody can read what you wrote.

11. It is your duty to listen to and consider the evidence and to determine fact issues that I may submit to you at the end of the trial. After you have heard all the evidence, I will give you instructions to follow as you make your decision. The instructions also will have questions for you to answer. You will not be asked and you should not consider which side will win. Instead, you will need to answer the specific questions I give you.

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33 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Every juror must obey my instructions. If you do not follow these instructions, you will be guilty ofjuror misconduct, and I may have to order a new trial and start this process over again. This would waste your time and the parties' money, and would require the taxpayers of this county to pay for another trial.

Do you understand these instructions? If you do not, please tell me now.

Please keep these instructions and review them as we go through this case. If anyone does not follow these instructions, tell me.

III. Court's Charge

Before closing arguments begin, the court must give to each member of the jury a copy of the charge, which must include the following written instructions, with such modifications as the circumstances of the particular case may require:

Members of the Jury [or Ladies & Gentlemen of the Jury]:

After the closing arguments, you will go to the jury room to decide the case, answer the questions that are attached, and reach a verdict. You may discuss the case with other jurors only when you are all together in the jury room.

Remember my previous instructions: Do not discuss the case with anyone else, either in person or by any other means. Do not do any independent investigation about the case or conduct any research. Do not look up any words in dictionaries or on the Internet. Do not post information about the case on the Internet. Do not share any special knowledge or experiences with the other jurors. Do not use your cell phone or any other electronic device during your deliberations for any reason. [I will give you a number where others may contact you in case of an emergency.]

[Any notes you have taken are for your own personal use. You may take your notes back into the jury room and consult them during deliberations, but do not show or read your notes to your fellow jurors during your deliberations. Your notes are not evidence. Each of you should rely on your independent recollection of the evidence and not be influenced by the fact that another juror has or has not taken notes.]

[You must leave your notes with the bailiff when you are not deliberating. The bailiff will give your notes to me promptly after collecting them from you. I will make sure your notes are kept

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34 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

in a safe, secure location and not disclosed to anyone. After you complete your deliberations, the bailiff will collect your notes. When you are released from jury duty, the bailiff will promptly destroy your notes so that nobody can read what you wrote.]

Here are the instructions for answering the questions:

1. Do not let bias, prejudice, or sympathy play any part in your decision.

2. Base your answers only on what was presented in court and on the law that is in these instructions and questions. Do not consider or discuss any evidence that was not presented in the

courtroom.

3. You are to make up your own minds about the facts. You are the sole judges of the credibility of the witnesses and the weight to give their testimony. But on matters of law, you must follow all of my instructions.

4. If my instructions use a word in a way that is different from its ordinary meaning, use the meaning I give you, which will be a proper legal definition.

5. All the questions and answers are important. No one should say that any question or answer is not important.

6. Answer "yes" or "no" to all questions unless you are told otherwise. A "yes" answer must be based on a preponderance of the evidence [unless you are told otherwise]. Whenever a question requires an answer other than "yes" or "no," your answer must be based on a preponderance of the evidence [unless you are told otherwise].

The term "preponderance of the evidence" means the greater weight of credible evidence presented in this case. If you do not find that a preponderance of the evidence supports a "yes" answer, then answer "no." A preponderance of the evidence is not measured by the number of witnesses or by the number of documents admitted in evidence. For a fact to be proved by a preponderance of the evidence, you must find that the fact is more likely true than not true.

7. Do not decide who you think should win before you answer the questions and then just answer the questions to match your decision. Answer each question carefully without considering who will win. Do not discuss or consider the effect your answers will have.

8. Do not answer questions by drawing straws or by any method of chance.

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35 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

9. Some questions might ask you for a dollar amount. Do not agree in advance to decide on a dollar amount by adding up each juror's amount and then figuring the average.

10. Do not trade your answers. For example, do not say, "I will answer this question your way if you answer another question my way."

11. [Unless otherwise instructed] The answers to the questions must be based on the decision of at least 10 of the 12 [5 of the 6] jurors. The same 10 [5] jurors must agree on every answer. Do not agree to be bound by a vote of anything less than 10 [5] jurors, even if it would be a majority.

As I have said before, if you do not follow these instructions, you will be guilty of juror misconduct, and I might have to order a new trial and start this process over again. This would waste your time and the parties' money, and would require the taxpayers of this county to pay for another trial. If a juror breaks any of these rules, tell that person to stop and report it to me immediately.

[Definitions, questions, and special instructions given to the jury will be transcribed here.]

Presiding Juror:

1. When you go into the jury room to answer the questions, the first thing you will need to do is choose a presiding juror.

2. The presiding juror has these duties:

a. Have the complete charge read aloud if it will be helpful to your deliberations. b. Preside over your deliberations. This means the presiding juror will manage the discussions, and see that you follow these instructions. c. Give written questions or comments to the bailiff who will give them to the judge. d. Write down the answers you agree on. e. Get the signatures for the verdict certificate. f. Notify the bailiff that you have reached a verdict.

Do you understand the duties of the presiding juror? If you do not, please tell me now.

Instructions for Signing the Verdict Certificate:

1. [Unless otherwise instructed] You may answer the questions on a vote of 10 [5] jurors. The same 10 [5] jurors must agree on every answer in the charge. This means you may not have one

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36 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

group of 10 [5] jurors agree on one answer and a different group of 10 [5] jurors agree on another

answer.

2. If 10 [5] jurors agree on every answer, those 10 [5] jurors sign the verdict.

If 11 jurors agree on every answer, those 11 jurors sign the verdict.

If all 12 [6] of you agree on every answer, you are unanimous and only the presiding juror signs the verdict.

3. All jurors should deliberate on every question. You may end up with all 12 [6] of you agreeing on some answers, while only 10 [5] or 11 of you agree on other answers. But when you sign the verdict, only those 10 [5] who agree on every answer will sign the verdict.

4. [Added if the charge requires some unanimity] There are some special instructions before Questions explaining how to answer those questions. Please follow the instructions. If all 12 [6] of you answer those questions, you will need to complete a second verdict certificate for those questions.

Do you understand these instructions? If you do not, please tell me now.

Judge Presiding

Verdict Certificate

Check one:

Our verdict is unanimous. All 12 [6] of us have agreed to each and every answer. The presiding juror has signed the certificate for all 12 [6] of us.

Signature of Presiding Juror Printed Name of Presiding Juror

Our verdict is not unanimous. Eleven of us have agreed to each and every answer and have signed the certificate below.

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37 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Our verdict is not unanimous. Ten [Five] of us have agreed to each and every answer and have signed the certificate below.

SIGNATURE NAME PRINTED

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

If you have answered Question No. [the exemplary damages amount], then you must sign this certificate also.

Additional Certificate [Used when some questions require unanimous answers]

I certify that the jury was unanimous in answering the following questions. All 12 [6] of us agreed to each of the answers. The presiding juror has signed the certificate for all 12 [6] of us.

[Judge to list questions that require a unanimous answer, including the predicate liability question.]

Signature of Presiding Juror Printed Name of Presiding Juror

IV.

That the following oral instructions shall be given by the court to the jury after the verdict has been accepted by the court and before the jurors are released from jury duty:

Thank you for your verdict.

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38 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

I have told you that the only time you may discuss the case is with the other jurors in the jury room. I now release you from jury duty. Now you may discuss the case with anyone. But you may also choose not to discuss the case; that is your right.

After you are released from jury duty, the lawyers and others may ask you questions to see if the jury followed the instructions, and they may ask you to give a sworn statement. You are free to discuss the case with them and to give a sworn statement. But you may choose not to discuss the case and not to give a sworn statement; that is your right.

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39 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

IN THE SUPREME COURT OF TEXAS

Misc. Docket No. 11- 9032

AMENDMENTS TO THE TEXAS RULES OF APPELLATE PROCEDURE AND TEMPLATES FOR LOCAL RULES GOVERNING ELECTRONIC COPIES AND ELECTRONIC FILINGS IN THE COURTS OF APPEALS

ORDERED that:

1. Pursuant to Section 22.004 of the Texas Government Code, the Supreme Court of Texas amends Rules 9.2 and 9.3 of the Texas Rules of Appellate Procedure, as follows.

9.2. Filing

(c) Electronic Filing. Documents may be permitted or required to be filed, signed, or verified by electronic means by order of the Supreme Court or the Court of Criminal Appeals, or by local rule of a court of appeals. A technical failure that precludes a party's compliance with electronic-filing procedures cannot be a basis for disposing of any case.

9.3. Number of Copies; Electronic Copies

(a) Courts ofAppeals.

(1) Paper Copies in General. A party must file:

(A) the original and three copies of all documents in an original proceeding; (B) the original and two copies of all motions in an appellate proceeding; and (C) the original and five copies of all other documents.

(2) Local Rules. A court of appeals may by local rule require:

40 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

(A) the filing of more or fewer paper copies of any document other than a petition for discretionary review; and (B) an electronic copy of a document filed in paper form.

(b) Supreme Court and Court of Criminal Appeals.

(1) Paper Copies of Document Filed in Paper Form. A party must file the original and 11 copies of any document addressed to either the Supreme Court or the Court of Criminal Appeals, except that in the Supreme Court, only an original and one copy must be filed of any motion, response to the motion, and reply in support of the motion, and in the Court of Criminal Appeals, only the original must be filed of a motion for extension of time or a response to the motion, or a pleading under Code of Criminal Procedure article 11.07.

(2) Electronic Copies of Document Filed in Paper Form. An electronic copy of a document filed in paper form may be required by order of the Supreme Court or the Court of Criminal Appeals.

(3) Paper Copies of Electronically Filed Document. Two paper copies of each document that is electronically filed with the Supreme Court or the Court of Criminal Appeals must be mailed or hand-delivered to the Supreme Court or the Court of Criminal Appeals, as appropriate, within one business day after the document is electronically filed.

(c) Exception for Record. Only the original record need be filed in any proceeding.

2. The Supreme Court also promulgates the attached templates for local rules governing electronic copies and electronic filings in the courts of appeals.

a. A court of appeals' local rule requiring electronic copies of documents must be in the form of Appendix A with modifications only as permitted by the Supreme Court. The local rule must be approved by Order of the Supreme Court.

b. A court of appeals' local rule permitting the electronic filing of documents must be in the form of Appendix B with modifications only as permitted by the Supreme Court. The local rule must be approved by Order of the Supreme Court.

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41 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

c. The procedures prescribed by the local rules apply in lieu of those prescribed by the Texas Rules of Appellate Procedure to the extent there are differences between the procedures; otherwise, the Rules of Appellate Procedure continue to apply with full force and effect.

3. Amended Rules 9.2 and 9.3 of the Texas Rules of Appellate Procedure, with any modifications made after public comments are received, take effect June 30, 2011. Comments regarding the amended rules may be submitted to the Supreme Court in writing on or before May 31,2011. Comments should be directed to Kennon L. Peterson, Rules Attorney, at P.O. Box 12248, Austin, TX 78711, or kennon.peterson(q)txcourts.gov.

4. Courts of appeals may proceed immediately with submitting proposed local rules in accordance with this Order for the Supreme Court's consideration.

5. The Clerk of the Supreme Court is directed to:

a. file a copy of this Order with the Secretary of State;

b. cause a copy of this Order to be mailed to each registered member of the State Bar of Texas by publication in the Texas Bar Journal;

c. send a copy of this Order to each elected member of the Legislature; and

d. submit a copy of the Order for publication in the Texas Register.

Dated: February ^_, 2011.

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42 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

n. Wallace B. Jefferson, Chief Just/c

Nathan L. Hecht, Justice

Dale Wainwright, Justice(

Davbd-W. Medina, Justice/

Paul W. Green, Justice

Phil Johnson, Justice

Don R. Wlett, Justice

at -n. Eva M. Guzman, Justi

Debra H. Lehrmann, Justice

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43 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

APPENDIX A

Local Rule . Electronic Copies of Documents Filed in Paper Form.

(a) Electronic copies of documents required. For the convenience of the court, attorneys, parties, and the public, an attorney for a party must email to the court an electronic copy of every document filed with the court, except a document under seal or subject to a motion to seal. A party who is not represented by an attorney is encouraged to email to the court an electronic copy of every document filed with the court, except a document under seal or subject to a motion to seal. [Courts may add exceptions for attorneys and unrepresented parties.]

(b) Filing required. An electronic copy does not constitute a filing. Documents must continue to be filed as provided by the Texas Rules of Appellate Procedure [, except that only the original and [insert number] copies must be filed of any document other than a petition for discretionary review. A party must file the original and 11 copies of a petition for discretionary review].

(c) Time to email electronic copy. The electronic copy must be emailed to the court at [insert applicable email address] on the same day the original document is filed. Also on that day, the electronic copy must be emailed to each other party's lead counsel for whom the filing attorney has an email address.

(d) Identification of document. The email subject line must identify the document by case number and by name. The electronic copy must be named as follows: [insert court's desired naming conventions here].

(e) Redaction of electronic copies. An electronic copy must be substantively identical to the original document filed with the court, except it must not contain a social security number; a birth date; a home address; the name of any person who was a minor when the underlying suit was filed; a driver's license number, passport number, tax identification number, or similar government- issued personal identification number; or a bank account number, credit card number, or other financial account number. The attorney emailing the electronic copy must redact all such information in accordance with the redaction guidelines posted by the Supreme Court's Clerk on the Supreme Court's website; however, the electronic copy may contain a reference to this information as long as the reference does not include any part of the actual information (e.g., "passport number"). For good cause, the court may order redaction of additional information.

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44 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

(f) Certification of counsel. The submission of an electronic copy constitutes a certification by all attorneys of record for the party filing the document that the electronic copy complies with paragraph (e).

(g) Posting of electronic copies. The clerk may post electronic copies of documents in a case on the court's website. By letter to the clerk, a party to the case may request that electronic copies posted on the court's website be redacted further or removed altogether. The request must identify with particularity the document(s) to be removed or the information to be redacted and state specific reasons for the request. If the request is for further redaction, the party must email a copy of the requested version of the document.

(h) Format of electronic copies. An electronic copy must be formatted as follows:

(1) An electronic copy must be in text-searchable portable document format (PDF) compatible with the latest version of Adobe Reader.

(2) Except as otherwise provided by this rule, an electronic copy of a document created by a word processing program must not be a scan of the original but must instead be converted from the original directly into a PDF file using Adobe Acrobat, a word processing program's PDF conversion utility, or another software program.

(3) Records filed in original proceedings and appendix materials may be scanned if necessary, but scanning creates larger file sizes with images of lesser quality and should be avoided when possible. An appendix must be combined into one computer file with the document it is associated with, unless the resulting computer file would exceed the size limits in paragraph (i). If a record filed in an original proceeding or an appendix contains more than one item, it should include a table of contents and either bookmarks to assist in locating each item or separator pages with the title of the item immediately following and any number or letter associated with the item in the table of contents.

(4) A scanned document must be made searchable using optical-character-recognition software, such as Adobe Acrobat, and have a resolution of 300 dots per inch (dpi).

(5) An electronic copy may contain hyperlinks to another part of the same document, an external source cited in the document, an appendix item associated with the document, an embedded case, or a record cite. Hyperlinks within an appendix item are also permitted.

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45 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

(6) An electronic copy must not contain a virus or malware. The submission of an electronic copy constitutes a certification by all attorneys of record for the party filing the document that the electronic copy has been checked for viruses and malware.

(7) An electronic copy need not be signed.

(i) Size of electronic copies. A electronic copy must not exceed 20 megabytes. Electronic copies larger than 20 megabytes must be divided into smaller files.

(j) Communications with the clerk. An attorney who emails an electronic copy of a document must supply the clerk with an email address to which the clerk may send notices or other communications about the case in lieu of mailing paper documents. If the attorney's email address changes, the attorney must provide the clerk with the new email address within one business day of the change. Lead counsel must register for Casemail and follow the instructions for receiving notices for cases in which they represent a party.

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46 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

APPENDIX B

Local Rule . Electronic Filings of Documents.

(a) Electronic filing permitted. A party may electronically file (e-file ) any document that may be filed with the court in paper form, except a document under seal or subject to a motion to seal.

(b) E-filing mechanism. E-filing must be done through Texas.gov, the portal established by the Texas Legislature. Directions for its use may be found on its website. This is a summary. A person must first register with an Electronic Filing Service Provider (EFSP). A list of approved EFSPs is on the Texas.gov website. The EFSP will provide the registrant with a confidential, secure username and password to use when e-filing a document. This username and password will also function as a signature on each e-filed document, and will authorize payment of all filing fees and service fees. A document to be e-filed must be transmitted to the EFSP, which will send the document to Texas.gov, which in turn will send the document to the clerk. The e-filer will receive by email an immediate acknowledgment of the e-filing, a confirmation of the clerk's acceptance of the filing, and a file-stamped copy of the document. Fees charged by Texas.gov for the e-filing of a document are in addition to any filing fees and are costs of court.

(c) Electronic service. A party who has registered to e-file documents through an EFSP may electronically serve (e-serve) documents through that EFSP on any other party who has consented to e-service by registering for the e-service option with an EFSP or by setting up a complimentary account with Texas.gov. Directions may be found on the Texas.gov website.

(1) Service through an EFSP is complete on transmission to the e-served person's EFSP or complimentary Texas.gov account. The e-filer's EFSP will send proof of service to the e-filer. Fees that an EFSP charges for e-service are not costs of court.

(2) If an e-filer must serve a copy of a document on a party who has not consented to e- service, the e-filer must comply with the service requirements in Texas Rule of Appellate Procedure 9.5 and, on the same day the document is e-filed, must send the document to:

(A) the party's lead counsel by email if the e-filer has an email address for the lead counsel; or (B) if the party is not represented by counsel, to the party by email if the e-filer has the party's email address.

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47 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

(d) Redaction of information in e-filed document.

(1) Unless the court orders otherwise, an e-filed document must not contain a social security number; a birth date; a home address; the name of any person who was a minor when the underlying suit was filed; a driver's license number, passport number, tax identification number, or similar government-issued personal identification number; or a bank account number, credit card number, or other financial account number. The e-filer must redact all of this information in accordance with the redaction guidelines posted by the Supreme Court's Clerk on the Supreme Court's website; however, the e-filed document may contain a reference to this information as long as the reference does not include any part of the actual information (e.g., "passport number"). For good cause, the court may order redaction of additional information.

(2) The e-filing of a document constitutes a certification by all attorneys of record for the party filing the document that the document complies with paragraph (1) of this rule.

(3) If an e-filer believes any information described in paragraph (1) of this rule is essential to an e-filed document or that the e-filed document would be confusing without the information, the e-filer may submit the information to the court in a reference list that is in paper form and under seal. The reference list must specify an appropriate identifier that corresponds uniquely to each item listed. Any reference in the e-filed document to a listed identifier will be construed to refer to the corresponding item of information. If the e-filer provides a reference list pursuant to this rule, the front page of the e-filed document must indicate that the reference list has been, or will be, provided.

(4) On its own initiative, the court may order a sealed reference list in any case. The court may also order that a document be filed under seal in paper form, without redaction. The court may later unseal the document or order the filer to provide a redacted version of the document for the public record.

(e) Format of e-filed document. An e-filed document must be formatted as follows:

(1) An e-filed document must be formatted in accordance with Texas Rule of Appellate Procedure 9.4(b)-(e). The "paper" requirements in Rule 9.4(b)-(c) apply equally to a "page" of the e-filed document.

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48 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

(2) An e-filed document must be in text-searchable portable document format (PDF) compatible with the latest version of Adobe Reader. An EFSP will convert each e-filed document from its original form into a PDF file that complies with this rule.

(3) Records filed in original proceedings and appendix materials may be scanned if necessary, but scanning creates larger file sizes with images of lesser quality and should be avoided when possible. An appendix must be combined into one computer file with the document it is associated with, unless the resulting computer file would exceed Texas.gov's size limits for the document. If a record filed in an original proceeding or an appendix contains more than one item, it should include a table of contents and either bookmarks to assist in locating each item or separator pages with the title of the item immediately following and any number or letter associated with the item in the table of contents.

(4) A scanned document must be made searchable using optical-character-recognition software, such as Adobe Acrobat, and have a resolution of 300 dots per inch (dpi).

(5) An e-filed document may contain hyperlinks to another part of the same document, an external source cited in the document, an appendix item associated with the document, an embedded case, or a record cite. Hyperlinks within an appendix item are also permitted.

(6) An e-filed document must not contain a virus or malware. The e-filing of a document constitutes a certification by the e-filer that the document has been checked for viruses and malware.

(7) The court may strike an e-filed document for nonconformance with this rule.

(f) Signatures on e-filed documents.

(1) Except as otherwise provided by this rule, the confidential, secure username and password that the e-filer must use to e-file a document constitute the e-filer's signature on the document, in compliance with signature requirements in the Texas Rules of Appellate Procedure. When a signature is provided in this manner, the e-filer must also include either an "/s/" and the e-filer's name typed in the space where the e-filer's signature would otherwise appear or an electronic image of the e-filer's signature, which may take the form of a public key-based digital signature or a scanned image of the e-filer's signature. The e- filer must not allow the e-filer's username or password to be used by anyone other than an agent who is authorized by the e-filer.

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49 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

(2) If a document must be notarized, sworn to, or made under oath, the e-filer must e-file the document as a scanned image containing the necessary signature(s).

(3) If a document requires the signature of an opposing party, the e-filer must e-file the document as a scanned image containing the opposing party's signature.

(4) When an e-filer e-files a scanned image of a document pursuant to paragraph (2) or (3) of this rule, the e-filer must retain the original document from which the scanned image was made until the case in which the document was filed is resolved. If the original document is in another party's possession, that party must retain the original document until the case in which the document was filed is resolved.

(5) If an e-served document was also e-filed and the person who completes a certificate of service under Texas Rule of Appellate Procedure 9.5(e) is different from the person who e-filed the document, the person who completes the certificate of service must sign the certificate by including either an'Vs/" and his or her name typed in the space where his or her signature would otherwise appear or an electronic image of his or her signature.

(g) Time of e-filing. A document will be considered filed timely if it is e-filed at any time before midnight (in the court's time zone) on the date on which the document is due.

(1) An e-filed document is deemed filed when the e-filer transmits the document to the e-filer's EFSP, unless the document is transmitted on a Saturday, Sunday, or legal holiday or requires a motion and an order allowing its filing.

(2) If a document is transmitted on a Saturday, Sunday, or legal holiday, it will be deemed filed on the next day that is not a Saturday, Sunday, or legal holiday.

(3) If a document requires a motion and an order allowing its filing, it will be deemed filed on the date the motion is granted.

(4) If an e-filed document is untimely due to a technical failure or a system outage, the e-filer may seek appropriate relief from the court.

Misc. Docket No. 11 - * ^ ** *~ Page 11

50 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

(h) Paper copies.

OPTION 1: An e-filer is not required to file any paper copies of an e-filed document, except that paper copies of a petition for discretionary review must still be filed in accordance with Rule 9 of the Texas Rules of Appellate Procedure within one business day after the petition is e-filed.

OPTION 2: An e-filer must file 11 paper copies of an e-filed petition for discretionary review and [insert number] paper copies of any other e-filed document in accordance with Rule 9 of the Texas Rules of Appellate Procedure within one business day after the document is e-filed.

(i) Email address requirements and communications with the clerk. An e-filed document must include the e-filer's email address, in addition to any other information required by the Texas Rules of Appellate Procedure. If the e-filer's email address changes, the e-filer must provide the clerk and the e-filer's EFSP with the new email address within one business day of the change. If there is a change in the email address of a party who has consented to receive e-service, the party must provide Texas.gov or, if applicable, the party's EFSP with the new email address within one business day of the change. The clerk may send notices or other communications about a case to an attorney's email address in lieu of mailing paper documents.

(j) Casemail registration. Lead counsel must register for Casemail and follow the instructions for receiving notices for cases in which they represent a party.

(k) Construction of rules. This rule must be liberally construed so as to avoid undue prejudice to any person who makes a good-faith effort to comply with requirements in this rule.

Misc. Docket No. 11- ^UJfc Page 12

51 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

IN THE SUPREME COURT OF TEXAS

Misc. Docket No 11-9 0 3 3

ELECTRONIC-COPY AND ELECTRONIC-FILING RULES FOR THE SUPREME COURT OF TEXAS

It is hereby ORDERED:

1. Part I of this Order governs electronic copies of original documents filed in paper form with the Supreme Court of Texas and supersedes and vacates the Order dated November 9,2010, in Misc. Docket No. 10-9189. An attorney who files an original document in paper form must submit an electronic copy of that document, as required by Part I of this Order.

2. Part II of this Order governs the electronic filing (e-filing) of documents with the Supreme Court of Texas. E-filing is voluntary for all parties until the Supreme Court orders otherwise.

3. The procedures prescribed by this Order apply in lieu of those prescribed by the Texas Rules of Appellate Procedure to the extent there are differences between the procedures; otherwise, the Rules of Appellate Procedure continue to apply with full force and effect.

4. This Order takes effect March 14,2011.

52 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Dated: March 1,2011.

Nimtjcn. Wallace B. Jefferson, ChiefJi^ttce

Nathan L. Hecht, Justice &4 it. Dale Wainwright, Justice,

^ ^^\^ T 111* ^1 fc < '— § David M. Medina, Justice/ ?

Paul W. Green, Justice

Phil Johnson, Justice

Don R..WiJlett,.. Justice

! f. ma M. Guzman, Justice/

Debra H. Lehrmann, Justice

Misc. Docket No. 11- Page2 of 9

53 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

PART I. ELECTRONIC-COPY RULES

1. Electronic copies of documents required. For the convenience of the Court, attorneys, parties, and the public, an attorney for a party who files a document in paper form must email an electronic copy of the document to the Court if the document is: (1) a petition; (2) a response to a petition; (3) a reply to a response to a petition; (4) a brief on the merits, including respondent's brief on the merits and petitioner's reply brief on the merits; (5) an amicus brief; (6) a post-submission brief; or (7) a motion, response to the motion, or reply in support of the motion, except for a motion for extension of time. This electronic-copy requirement applies to both petition-for-review proceedings under Texas Rule of Appellate Procedure 53 and original proceedings under Texas Rule of Appellate Procedure 52. But copies of documents that are filed under seal or that are the subject of a pending motion to seal should not be submitted electronically.

2. Filing required. An electronic copy does not constitute a filing. Documents must continue to be filed as provided by the Texas Rules of Appellate Procedure. A party must still file an original and 11 copies of any document addressed to the Court, except that only an original and one copy must be filed of any motion, response to the motion, and reply in support of the motion.

3. Time to email electronic copy. The electronic copy must be emailed to the Court at [email protected] on the same day the original document is filed. Also on that day, the electronic copy must be emailed to each other party's lead counsel for whom the filing attorney has an email address.

4. Identification of document. The name of the document being transmitted must appear in the subject line of the email. An electronic copy must be named as follows:

Case No. 11-0182 (if no Court case number is available yet, use the court of appeals' case number)

Document Type pfr (petition for review) mandamus (petition for writ of mandamus) habeas (petition for writ of habeas corpus) response (response to petition) reply (reply to response to petition) petbom (petitioner's brief on the merits) resbom (respondent's brief on the merits) replybom (reply brief on the merits) amicus (amicus brief) postsub (post-submission) moreh (motion for rehearing) mo stay (motion for stay)

Name of Party Parties' names need not be included unless there are multiple parties on the same side filing separate briefs; if so, the last

Misc. Docket No .11- bO33 Page 3 of 9

54 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

name of the first-named party should be included if the first- named party is a person (e.g., Jane Smith would be abbreviated as "Smith"). If the first-named party is an entity, abbreviate the name of the party in a manner that allows for easy identification (e.g., United Insurance Company of North America would be abbreviated as "United"). Amicus briefs shall include the last name of the first-named amicus if amici are individuals or an abbreviation if amici are entities.

For example, assuming case No. 11-0182 involves one petitioner, an amicus, and two respondents filing separate briefs, the documents would be named as follows:

ll-0182.pfr.pdf 11-0182.response.nameofrespondentl .pdf 11-0182.response.nameofrespondent2.pdf ll-0182.reply.pdf ll-0182.petbom.pdf 11-0182.resbom.nameofrespondentl .pdf 11-0182.resbom.nameofrespondent2.pdf ll-0182.replybom.pdf ll-0182.amicus.pdf

5. Redaction of electronic copies. An electronic copy must be substantively identical to the original document filed with the Court, except it must not contain a social security number; a birth date; a home address; the name of any person who was a minor when the underlying suit was filed; a driver's license number, passport number, tax identification number, or similar government-issued personal identification number; or a bank account number, credit card number, or other financial account number. The attorney emailing the electronic copy must redact all such information in accordance with the redaction guidelines posted by the Court's Clerk on the Court's website; however, the electronic copy may contain a reference to this information as long as the reference does not include any part of the actual information (e.g., "passport number"). For good cause, the Court may order redaction of additional information.

6. Certification of counsel. The submission of an electronic copy constitutes a certification by all attorneys of record for the party filing the document that the electronic copy complies with paragraph 5.

7. Posting of electronic copies. The Clerk may post electronic copies of documents in a case on the Court's website. By letter to the Clerk, a party to the case may request that electronic copies posted on the Court's website be redacted further or removed altogether. The request must identify with particularity the document(s) to be removed or the information to be redacted and state specific reasons for the request. -If the request is for further redaction, the party must email a copy of the requested version of the document.

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55 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

8. Format of electronic copies. An electronic copy must be formatted as follows:

(a) An electronic copy must be in text-searchable portable document format (PDF) compatible with the latest version of Adobe Reader.

(b) Except as otherwise provided by this rule, an electronic copy of a document created by a word processing program must not be a scan of the original but must instead be converted from the original directly into a PDF file using Adobe Acrobat, a word processing program's PDF conversion utility, or another software program.

(c) Records filed in original proceedings and appendix materials may be scanned if necessary, but scanning creates larger file sizes with images of lesser quality and should be avoided when possible. An appendix must be combined into one computer file with the document it is associated with, unless the resulting computer file would exceed the size limits in Rule 9 below. If a record filed in an original proceeding or an appendix contains more than one item, it should include a table of contents and either bookmarks to assist in locating each item or separator pages with the title of the item immediately following and any number or letter associated with the item in the table of contents.

(d) A scanned document must be made searchable using optical-character-recognition software, such as Adobe Acrobat, and have a resolution of 300 dots per inch (dpi).

(e) An electronic copy may contain hyperlinks to another part of the same document, an external source cited in the document, an appendix item associated with the document, an embedded case, or a record cite. Hyperlinks within an appendix item are also permitted.

(f) An electronic copy must not contain a virus or malware. The submission of an electronic copy constitutes a certification by all attorneys of record for the party filing the document that the electronic copy has been checked for viruses and malware.

(g) An electronic copy need not be signed.

9. Size of electronic copies. A electronic copy must not exceed 20 megabytes. Electronic copies larger than 20 megabytes must be divided into smaller files.

10. Communications with the clerk. An attorney who emails an electronic copy of a document must supply the Clerk with an email address to which the Clerk may send notices or other communications about the case in lieu of mailing paper documents. If the attorney's email address changes, the attorney must provide the clerk with the new email address within one business day of the change. Lead counsel must register for Casemail and follow the instructions for receiving notices for cases in which they represent a party.

Misc. Docket No. 11- v U J J page 5 of 9

56 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

PART II. E-FILING RULES

1. Electronic filing permitted. A party may electronically file (e-file) any document that may be filed with the Court in paper form, except a document under seal or subject to a motion to seal.

2. E-filing mechanism. E-filing must be done through Texas.gov, the portal established by the Texas Legislature. Directions for its use may be found on its website. This is a summary. A person must first register with an Electronic Filing Service Provider (EFSP). A list of approved EFSPs is on the Texas.gov website. The EFSP will provide the registrant with a confidential, secure username and password to use when e-filing a document. This username and password will also function as a signature on each e-filed document, and will authorize payment of all filing fees and service fees. A document to be e-filed must be transmitted to the EFSP, which will send the document to Texas.gov, which in turn will send the document to the Clerk of the Court. The e-filer will receive by email an immediate acknowledgment of the e-filing, a confirmation of the Clerk's acceptance of the filing, and a file-stamped copy of the document. Fees charged by Texas.gov for the e-filing of a document are in addition to any filing fees and are costs of court.

3. Electronic service. A party who has registered to e-file documents through an EFSP may electronically serve (e-serve) documents through that EFSP on any other party who has consented to e-service by registering for the e-service option with an EFSP or by setting up a complimentary account with Texas.gov. Directions may be found on the Texas.gov website.

(a) Service through an EFSP is complete on transmission to the e-served person's EFSP or complimentary Texas.gov account. The e-filer's EFSP will send proof of service to the e-filer. Fees that an EFSP charges for e-service are not costs of court.

(b) If an e-filer must serve a copy of a document on a party who has not consented to e- service, the e-filer must comply with the service requirements in Texas Rule of Appellate Procedure 9.5 and, on the same day the document is e-filed, must send the document to:

(1) the party's lead counsel by email if the e-filer has an email address for the lead counsel; or

(2) if the party is not represented by counsel, to the party by email if the e-filer has the party's email address.

4. Redaction of information in e-filed document.

(a) Unless the Court orders otherwise, an e-filed document must not contain a social security number; a birth date; a home address; the name of any person who was a minor when the underlying suit was filed; a driver's license number, passport number, tax identification number, or similar government-issued personal identification number; or a bank account number, credit card number, or other financial account number. The e-filer must redact all of this information in accordance with the redaction guidelines posted by the Court's Clerk

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57 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

on the Court's website; however, the e-filed document may contain a reference to this information as long as the reference does not include any part of the actual information (e.g., "passport number"). For good cause, the Court may order redaction of additional information.

(b) The e-filing of a document constitutes a certification by all attorneys of record for the party filing the document that the document complies with paragraph (a) of this rule.

(c) If an e-filer believes any information described in paragraph (a) of this rule is essential to an e-filed document or that the e-filed document would be confusing without the information, the e-filer may submit the information to the Court in a reference list that is in paper form and under seal. The reference list must specify an appropriate identifier that corresponds uniquely to each item listed. Any reference in the e-filed document to a listed identifier will be construed to refer to the corresponding item of information. If the e-filer provides a reference list pursuant to this rule, the front page of the e-filed document must indicate that the reference list has been, or will be, provided.

(d) On its own initiative, the Court may order a sealed reference list in any case. The Court may also order that a document be filed under seal in paper form, without redaction. The Court may later unseal the document or order the filer to provide a redacted version of the document for the public record.

5. Format of e-filed document. An e-filed document must be formatted as follows:

(a) An e-filed document must be formatted in accordance with Texas Rule of Appellate Procedure 9.4(b)-(e). The "paper" requirements in Rule 9.4(b)-(c) apply equally to a "page" of the e-filed document.

(b) An e-filed document must be in text-searchable portable document format (PDF) compatible with the latest version of Adobe Reader. An EFSP will convert each e-filed document from its original form into a PDF file that complies with this rule.

(c) Records filed in original proceedings and appendix materials may be scanned if necessary, but scanning creates larger file sizes with images of lesser quality and should be avoided when possible. An appendix must be combined into one computer file with the document it is associated with, unless the resulting computer file would exceed Texas.gov's size limits for the document. If a record filed in an original proceeding or an appendix contains more than one item, it should include a table of contents and either bookmarks to assist in locating each item or separator pages with the title of the item immediately following and any number or letter associated with the item in the table of contents.

(d) A scanned document must be made searchable using optical-character-recognition software, such as Adobe Acrobat, and have a resolution of 300 dots per inch (dpi).

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58 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

(e) An e-filed document may contain hyperlinks to another part of the same document, an external source cited in the document, an appendix item associated with the document, an embedded case, or a record cite. Hyperlinks within an appendix item are also permitted.

(f) An e-filed document must not contain a virus or malware. The e-filing of a document constitutes a certification by the e-filer that the document has been checked for viruses and malware.

(g) The Court may strike an e-filed document for nonconformance with this rule.

6. Signatures on e-filed documents.

(a) Except as otherwise provided by this rule, the confidential, secure username and password that the e-filer must use to e-file a document constitute the e-filer's signature on the document, in compliance with signature requirements in the Texas Rules of Appellate Procedure. When a signature is provided in this manner, the e-filer must also include either an "/s/" and the e-filer's name typed in the space where the e-filer's signature would otherwise appear or an electronic image of the e-filer's signature, which may take the form of a public key-based digital signature or a scanned image of the e-filer's signature. The e- filer must not allow the e-filer's username or password to be used by anyone other than an agent who is authorized by the e-filer.

(b) If a document must be notarized, sworn to, or made under oath, the e-filer must e-file the document as a scanned image containing the necessary signature(s).

(c) If a document requires the signature of an opposing party, the e-filer must e-file the document as a scanned image containing the opposing party's signature.

(d) When an e-filer e-files a scanned image of a document pursuant to paragraph (b) or (c) of this rule, the e-filer must retain the original document from which the scanned image was made until the case in which the document was filed is resolved. If the original document is in another party's possession, that party must retain the original document until the case in which the document was filed is resolved.

(e) If an e-served document was also e-filed and the person who completes a certificate of service under Texas Rule of Appellate Procedure 9.5(e) is different from the person who e-filed the document, the person who completes the certificate of service must sign the certificate by including either an'Vs/" and his or her name typed in the space where his or her signature would otherwise appear or an electronic image of his or her signature.

7. Time of e-filing. A document will be considered filed timely if it is e-filed at any time before midnight (in the Court's time zone) on the date on which the document is due.

(a) An e-filed document is deemed filed when the e-filer transmits the document to the

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59 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

e-filer's EFSP, unless the document is transmitted on a Saturday, Sunday, or legal holiday or requires a motion and an order allowing its filing.

(b) If a document is transmitted on a Saturday, Sunday, or legal holiday, it will be deemed filed on the next day that is not a Saturday, Sunday, or legal holiday.

(c) If a document requires a motion and an order allowing its filing, it will be deemed filed on the date the motion is granted.

(d) If an e-filed document is untimely due to a technical failure or a system outage, the e-filer may seek appropriate relief from the Court.

8. Paper copies. One paper copy of a record in an original proceeding and two paper copies of any other document must be filed within one business day after the document is e-filed. All paper copies must be filed in accordance with Texas Rule of Appellate Procedure 9.

9. Email address requirements and communications with the clerk. An e-filed document must include the e-filer's email address, in addition to any other information required by the Texas Rules of Appellate Procedure. If the e-filer's email address changes, the e-filer must provide the Clerk and the e-filer's EFSP with the new email address within one business day of the change. If there is a change in the email address of a party who has consented to receive e-service, the party must provide Texas.gov or, if applicable, the party's EFSP with the new email address within one business day of the change. The Clerk may send notices or other communications about a case to an attorney's email address in lieu of mailing paper documents.

10. Casemail registration. Lead counsel must register for Casemail and follow the instructions for receiving notices for cases in which they represent a party.

11. Construction of rules. These rules must be liberally construed so as to avoid undue prejudice to any person who makes a good-faith effort to comply with requirements in these rules.

Misc. Docket No. 11 -8033 Page 9 of 9

60 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

IN THE SUPREME COURT OF TEXAS

Misc. Docket No. 11-9064

ORDER AMENDING RULES 18a AND 18b OF THE TEXAS RULES OF CIVIL PROCEDURE

ORDERED that:

1. Pursuant to section 22.004 of the Texas Government Code, the Supreme Court of Texas amends Rules 18a and 18b of the Texas Rules of Civil Procedure as follows.

2. Amended Rules 18a and 18b, with any modifications made after public comments are received, take effect August 1, 2011. Comments may be submitted to the Supreme Court of Texas in writing on or before July 1, 2011. Comments should be directed to Kennon L. Peterson, Rules Attorney, at P.O. Box 12248, Austin, TX 78711, or [email protected].

3. The Clerk is directed to:

a. file a copy of this Order with the Secretary of State;

b. cause a copy of this Order to be mailed to each registered member of the State Bar of Texas by publication in the Texas Bar Journal;

c. send a copy of this Order to each elected member of the Legislature; and

d. submit a copy of the Order for publication in the Texas Register.

Misc. Docket No. 11-9064

61 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Dated: April 11^2011.

Wallace B. Jefferson, Chief Jusrci

Nathan L. Hecht, Justice

Dale Wainwright, Justice

David M. Medina, Justice

Paul W. Green, Justice

Phil Johnson, Justice

Don RQWillett, Justic

Eva M. Guzman, Justi

Debra H. Lehrmann, Justice

9064 Misc. Docket No. 11- Page 2 of 1

62 Supreme Court Update February 1, 2011 – April 30, 2011 Chapter 3

Rule 18. Recusal and Disqualification of Judges

18.1. Procedure

(a) Motion; Form and Contents. A party in a case in any trial court other than a statutory probate court or justice court may seek to recuse or disqualify a judge who is sitting in the case by filing a motion with the clerk of the court in which the case is pending. The motion:

(1) must be verified;

(2) must assert one or more of the grounds listed in Rule 18.2;

(3) must not be based solely on the judge's rulings in the case; and

(4) must state with detail and particularity facts that:

(A) are within the affiant's personal knowledge, except that facts may be stated on information and belief if the basis for that belief is specifically stated;

(B) would be admissible in evidence; and

(C) if proven, would be sufficient to justify recusal or disqualification.

(b) Time for Filing Motion.

(1) Motion to Recuse. A motion to recuse:

(A) must be filed as soon as practicable after the movant knows of the ground stated in the motion; and

(B) must not be filed after the tenth day before the date set for trial or other hearing unless, before that day, the movant neither knew nor reasonably should have known:

(i) that the judge whose recusal is sought would preside at the trial or hearing; or

(ii) that the ground stated in the motion existed.

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(2) Motion to Disqualify. A motion to disqualify should be filed as soon as practicable after the movant knows of the ground stated in the motion.

(c) Response to Motion.

(1) By Another Party. Any other party in the case may, but need not, file a response to the motion. Any response must be filed before the motion is heard.

(2) By the Respondent Judge. The judge whose recusal or disqualification is sought should not file a response to the motion.

(d) Service ofMotion or Response. A party who files a motion or response must serve a copy on every other party. The method of service must be the same as the method of filing, if possible.

(e) Duties of Clerk.

(1) Delivery of Motion or Response. When a motion or response is filed, the clerk of the court must immediately deliver a copy to the respondent judge and to the presiding judge of the administrative judicial region in which the court is located ("the regional presiding judge"). :

(2) Delivery of Order of Recusal or Referral. When a respondent judge signs and files an order of recusal or referral, the clerk of the court must immediately deliver a copy to the regional presiding judge.

(f) Duties ofRespondent Judge; Failure to Comply.

(1) Responding to Motion. Regardless of whether the motion complies with this rule, the respondent judge, within three business days after the motion is filed, must either:

(A) sign and file with the clerk an order of recusal; or

(B) sign and file with the clerk an order referring the motion to the regional presiding judge.

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(2) Restrictions on Further Action.

(A) Motion Filed Before Evidence Offered at Trial. If a motion is filed before evidence has been offered at trial, the respondent judge must take no further action in the case until the motion has been decided, except for good cause stated in writing or on the record.

(B) Motion Filed After Evidence Offered at Trial. If a motion is filed after evidence has been offered at trial, the respondent judge may proceed, subject to stay by the regional presiding judge.

(3) Failure to Comply. If the respondent judge fails to comply with a duty imposed by this rule, the movant may notify the regional presiding judge.

(g) Duties ofRegional Presiding Judge.

(1) Motion. The regional presiding judge must rule on a referred motion or assign a judge to rule. If a party files a motion to recuse or disqualify the regional presiding judge, the regional presiding judge may still assign a judge to rule on the original, referred motion. Alternatively, the regional presiding judge may sign and file with the clerk an order referring the second motion to the Chief Justice of the Supreme Court of Texas for consideration.

(2) Order. The ruling must be by written order.

(3) Summary Denial for Noncompliance.

(A) Motion to Recuse. A motion to recuse that does not comply with this rule may be denied without an oral hearing. The order must state the nature of the noncompliance. Even if the motion is amended to correct the stated noncompliance, the motion will count for purposes of determining whether a tertiary recusal motion has been filed under the Civil Practice and Remedies Code.

(B) Motion to Disqualify. A motion to disqualify may not be denied on the ground that it was not filed or served in compliance with this rule.

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(4) Interim Orders. The regional presiding judge or judge assigned to decide the motion may issue interim or ancillary orders in the pending case as justice may require.

(5) Discovery. Except by order of the regional presiding judge or the judge assigned to decide the motion, a subpoena or discovery request may not issue to the respondent judge and may be disregarded unless accompanied by the order.

(6) Hearing.

(A) Time. The motion must be heard as soon as practicable and may be heard immediately after it is referred to the regional presiding judge or an assigned judge.

(B) Notice. Notice of the hearing must be given to all parties in the case.

(C) By Telephone. The hearing may be conducted by telephone on the record. Documents submitted by facsimile or email, otherwise admissible under the rules of evidence, may be considered.

(7) Reassignment of Case if Motion Granted. If the motion is granted, the regional presiding judge must transfer the case to another court or assign another judge to the

case.

(h) Sanctions. After notice and hearing, the judge who hears the motion may order the party or attorney who filed the motion, or both, to pay the reasonable attorney fees and expenses incurred by other parties if the judge determines that the motion was:

(1) groundless and filed in bad faith or for the purpose of harassment; or

(2) clearly brought for unnecessary delay and without sufficient cause.

(i) ChiefJustice. The Chief Justice of the Supreme Court of Texas may assign judges and issue any orders permitted by this rule or pursuant to statute.

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(j) Appellate Review.

(1) Order on Motion to Recuse.

(A) Denying Motion. An order denying a motion to recuse may be reviewed only for abuse of discretion on appeal from the final judgment.

(B) Granting Motion. An order granting a motion to recuse is final and cannot be reviewed by appeal, mandamus, or otherwise.

(2) Order on Motion to Disqualify. An order granting or denying a motion to disqualify may be reviewed by mandamus and may be appealed in accordance with other law.

Rule 18.2. Grounds

(a) Grounds for Disqualification. A judge must disqualify in any proceeding in which:

(1) the j udge has served as a lawyer in the matter in controversy, or a lawyer with whom the judge previously practiced law served during such association as a lawyer concerning the matter;

(2) the judge knows that, individually or as a fiduciary, the judge has an interest in the subject matter in controversy; or

(3) either of the parties may be related to the judge by affinity or consanguinity within the third degree.

(b) Grounds for Recusal. A judge must recuse in any proceeding in which:

(1) the judge's impartiality might reasonably be questioned;

(2) the judge has a personal bias or prejudice concerning the subject matter or a party;

(3) the judge has personal knowledge of disputed evidentiary facts concerning the proceeding;

(4) the judge or a lawyer with whom the judge previously practiced law has been a material witness concerning the proceeding;

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(5) the judge participated as counsel, adviser, or material witness in the matter in controversy, or expressed an opinion concerning the merits of it, while acting as an attorney in government service;

(6) the judge knows that the judge, individually or as a fiduciary, or the judge's spouse or minor child residing in the judge's household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding;

(7) the judge or the judge's spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person:

(A) is a party to the proceeding or an officer, director, or trustee of a party;

(B) is known by the judge to have an interest that could be substantially affected by the outcome of the proceeding; or

(C) is to the judge's knowledge likely to be a material witness in the proceeding;

or

(8) the judge or the judge's spouse, or a person within the first degree of relationship to either of them, or the spouse of such a person, is acting as a lawyer in the proceeding.

(c) Financial Interests. A judge should inform himself or herself about personal and fiduciary financial interests, and make a reasonable effort to inform himself or herself about the personal financial interests of his or her spouse and minor children residing in the household.

(d) Terminology and Standards. In this rule:

(1) "proceeding" includes pretrial, trial; or other stages of litigation;

(2) the degree of relationship is calculated according to the civil law system;

(3) "fiduciary" includes such relationships as executor, administrator, trustee, and guardian;

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(4) "financial interest" means ownership of a legal or equitable interest, however small, or a relationship as director, adviser, or other active participant in the affairs of a party, except that:

(A) ownership in a mutual or common investment fund that holds securities is not a "financial interest" in such securities unless the judge participates in the management of the fund;

(B) an office in an educational, religious, charitable, fraternal, or civic organization is not a "financial interest" in securities held by the organization;

(C) the proprietary interest of a policyholder in a mutual insurance company, of a depositor in a mutual savings association, or a similar proprietary interest, is a "financial interest" in the organization only if the outcome of the proceeding could substantially affect the value of the interest;

(D) ownership of government securities is a "financial interest" in the issuer only if the outcome of the proceeding could substantially affect the value of the securities; and

(E) an interest as a taxpayer or utility ratepayer, or any similar interest, is not a "financial interest" unless the outcome of the proceeding could substantially affect the liability of the judge or a person related to the judge within the third degree more than other judges.

(e) Waiving Groundfor Recusal. The parties to a proceeding may waive any ground for recusal after it is fully disclosed on the record.

(f) Discovery and Divestiture. If a judge does not discover that the judge is recused under subparagraph (b)(6) or (b)(7)(C) until after the judge has devoted substantial time to the matter, the judge is not required to recuse himself or herself if the judge or the person related to the judge divests himself or herself of the interest that would otherwise require recusal.

Comment to 2011 Change: Rule 18.1 — an amended version of former Rule 18a — governs the procedure for recusing or disqualifying a judge sitting in any trial court other than a statutory probate court or justice court. Chapter 25 of the Government Code governs statutory probate courts,

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and Rule 528 governs justice courts. Under Rule 18.1, a judge's rulings may not be the sole basis for a motion to recuse or disqualify the judge. But when one or more sufficient other bases are raised, the judge hearing the motion may consider evidence of rulings when considering whether to grant the motion. For purposes of this rule, the term "rulings" is not meant to encompass a judge's statements or remarks about a case.

Rule 18.2 is former Rule 18b. The amendments are not intended to be substantive.

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