I spoke today, virtually, to the Texas Bar CLE’s 33rd “Advanced Evidence and Discovery Course,” which would have been in San Antonio. My topic was proving up damages in a commercial case, and I focused on ten specific issues identified in recent Texas and Fifth Circuit cases. I also showed off some smooth hand gestures, as you can see above. Here is a copy of my PowerPoint. The Bar staff did a terrific job with the A/V logistics and I look forward to doing another program with them soon.
Like the zombie to the right, the Rule Against Perpetuities never dies and always marches forward. Most recently, in Yowell v. Granite Operating Co, the Supreme Court found that a reserved overriding royalty interest was an interest in real property (as well as a contract right) and could thus be subject to the Rule. Fortunately for Ruleaphobes, the Court also held: “Reformation under [CPRC] section 5.043 is not an ‘action’ to which the residual statute of limitations would apply. Rather, the Legislature enacted a remedial mandate for courts to reform interests, like the one in this case, that violate the Rule.” No. 18-0841 (May 15, 2020).
A construction lawsuit about alleged cost overruns on a dam project led to a dispute about arbitrability, as to which the majority in San Antonio River Auth. v. Austin Bridge & Road held:
“Local Government Code Chapter 271 . . . authorizes local governments, like the River Authority, to agree to arbitrate claims brought under the chapter. Chapter 271 further provides that the final resolution of an arbitration proceeding is ‘enforceable’ insofar as immunity is waived. What is enforceable is authorized.”
“Immunity implicates subject-matter jurisdiction; it may be waived only by the legislature’s consent. And enforcement of a judgment against a local government requires the exercise of state judicial power. Courts are empowered to enforce such judgments only to the extent that immunity is waived. Accordingly, the judiciary retains the duty to decide whether a local government has waived its immunity, and the extent to which any arbitration award is recoverable against a local government—the parties’ agreement to arbitrate notwithstanding.” (emphasis added). Justice Bland wrote for the majority, joined by Justices Green, Lehrmann, Blacklock, and Busby.
A dissent saw the issue differently: “Austin Bridge and the River Authority indisputably “picked” binding arbitration as the method to resolve their contract dispute, but because the River Authority is a statutorily created local governmental entity, its “pick” does not ultimately matter. As a political subdivision of the State, the River Authority can only exercise powers that a statute expressly or impliedly confers. Ultimately, the State itself—acting through the legislature—must have authorized the River Authority to resolve this dispute through binding arbitration. If (as I conclude) it didn’t, the River Authority’s agreement to engage in binding arbitration is void and unenforceable.” (citations omitted) (emphasis added). Justice Boyd the dissent, joined by Chief Justice Hecht and Justices Guzman and Devine.
Despite unusual features of the State’s mandamus petition about mail-in ballots as to (1) the degree of discretion given county election officials, (2) the early stage of preparation for the 2020 election, and (3) ongoing litigation (as discussed briefly by me in this (Houston Chronicle interview), the Supreme Court has set the matter for oral argument on Wednesday of this week.
With the kids home from school because of the coronavirus, I’ve watched a lot of YouTube videos over their shoulders. In particular, this one tells the fascinating story about how post-production editing saved Star Wars, which was bloated and impossible to follow in its first rough versions. Among other changes, the start of the film was drastically simplified – from a series of back-and-forths between space and Tatooine, to a focus on the opening space battle and no shots of Tatooine until the droids landed there. This bit of editing is directly relevant to the tendency of legal writers to “define” (introduce) all characters and terms at the beginning of their work, without regard to the flow of the narrative that follows.
The reversal of a 9-figure damages award in Credit Suisse AG v. Claymore Holdings LLC focused, in part, on the specific issue submitted to the jury: “There is no question that ‘the value of what Plaintiff received in the 2007 Lake Las Vegas Financing’ is the key question in this case for purposes of calculating contract damages. Claymore argued it was also the key question for purposes of calculating fraud damages in this case. And it does not challenge the jury’s damages finding. When the question of an asset’s past value has already been proven to a jury under a damages model neither party challenges, any suggestion that it was really never possible to calculate that value faces a strong headwind.” No. 18-0403 (April 24, 2020).
It is hard to blog about the Texas state appellate courts when their website has been the victim of a ransomware attack! The unfortunate incident has been well-covered by the Texas Lawbook and Law360.
This is a cross-post from 600 Camp.
After recently addressing a party’s rights to oral argument in a dispute about enforcement of an arbitration award, the Fifth Circuit then returned to Sun Coast Resources v. Conrad to review the prevailing party’s motion for sanctions under Fed. R. App. 38 for a frivolous appeal.The Court observed:
“[T]he case for Rule 38 sanctions is strongest in matters involving malice, not incompetence. And our decision on Sun Coast’s appeal was careful not to assume the former. As to the merits of its appeal—including the company’s failure to disclose that it cited Opalinski II rather than Opalinski I to the arbitrator—we observed that ‘[t]he best that may be said for Sun Coast is that it badly misreads the record.’ As to its demand for oral argument, we stated that ‘Sun Coast’s motion misunderstands the federal appellate process in more ways than one.’ Perhaps Sun Coast earnestly (if mistakenly) believed it had a valid legal claim to press. Or perhaps it was bad faith—maximizing legal expense to drive a less-resourced adversary to drop the case or settle for less. Or perhaps its decisions were driven by counsel. But we must resolve the pending motion based on facts and evidence—not speculation. We sympathize with Conrad . . . [b]ut we conclude that this is a time for grace, not punishment.”
No. 19-20058 (May 7, 2020) (citations omitted).
While the timing is coincidental, the case is an instructive companion to the Texas Supreme Court’s recent opinion in Brewer v. Lennox Hearth Products LLC, which reversed a sanctions award. That Court noted that “while the absence of authoritative guidance is not a license to act with impunity, bad faith is required to impose sanctions under the court’s inherent authority,” and this held that “the sanctions order in this case cannot stand because evidence of bad faith is lacking.” No. 18-0426 (Tex. April 24, 2020) (footnotes omitted).
The “Salon a la Mode” litigation continues, with Ms. Luther temporarily released from custody while proceedings continue about the merits and her habeas petition.
The supreme court denied the high-profile mandamus petition in In re: Salon a la Mode, noting: “The relators’ claims, raised in an original action in this Court, should first be presented to the appropriate district court.” A concurrence by Justice Blacklock, joined by Justices Guzman, Boyd, and Devine, reminded: “At the same time, all of us—the judiciary, the other branches of government, and our fellow citizens—must insist that every action our governments take complies with the Constitution, especially now. If we tolerate unconstitutional government orders during an emergency, whether out of expediency or fear, we abandon the Constitution at the moment we need it most.”
