This is a cross-post from 600Commerce about a Dallas case recently reviewed by the Texas Supreme Court:
After a split decision from the Fifth Court declined to send a personal-injury case to arbitration, the Texas Supreme Court ruled otherwise in Baby Dolls v. Sotero: “The Family’s argument, and the court of appeals’ holding, that Hernandez and the Club never had a meeting of the minds on the contract blinks the reality that they operated under it for almost two years, week after week, before Hernandez’s tragic death. We hold that the parties formed the agreement reflected in the contract they signed.” No. 20-0782 (Tex. March 18, 2022).
In an 8-1 decision, the Texas Supreme Court reversed the Fifth Court’s judgment in Fifth Court’s judgment in Aerotek v. Boyd, a dispute about whether employees agreed to arbitration via their employer’s electronic system. The court observed:
“It may be that the use of electronic contracts already exceeds the use of paper contracts or that it will soon. The [Texas Uniform Electronic Transactions Act] does not limit the ways in which electronic contracts may be proved valid, but it specifically states that proof of the efficacy of the security procedures used in generating a contract can prove that an electronic signature is attributable to an alleged signatory. An opposing party may, of course, offer evidence that security procedures lack integrity or effectiveness and therefore cannot reliably be used to connect a computer record to a particular person. But that attribution cannot be cast into doubt merely by denying the result that reliable procedures generate.”
(footnote omitted). A dissent would have evaluated the record differently. No. 20-0290 (Tex. May 28, 2021).
In In re Copart, the supreme court granted mandamus relief as to discovery connected with a motion to compel arbitration: “In sum, Ordaz’s motion and affidavit demonstrate no colorable basis or reason to believe that the requested discovery would be material in establishing the agreement’s existence and enforceability. Ordaz thus failed to provide the trial court with a reasonable basis to conclude that it lacks sufficient information to determine whether her claims against Copart are arbitrable.” No. 19-1078 (March 12, 2021).
Last Friday, the supreme court stayed proceedings in the Aerotek litigation from Dallas, in which a Fifth Court panel split 2-1 about the evidence needed to prove up the plaintiff’s assent to an arbitration agreement. The matter will be orally argued in February.
Justice Busby wrote for the majority in Bonsmara Natural Beef Co. v. Hart of Texas Cattle Feeder: “[A] person ‘may appeal from’ certain types of interlocutory orders, including an order denying a motion to compel arbitration. Does this language mean that if the losing party chooses not to take an interlocutory appeal from such an order, it forfeits the ability to challenge that order on appeal from a final judgment? According to the [plaintiff] cattle owner, the mere availability of an interlocutory appeal demonstrates that the losing party must appeal the order within twenty days of its issuance. Because the [defendant] cattle feeder failed to appeal the order denying its motion to compel arbitration within that period, the owner contends the appellate court lacked jurisdiction to overturn the trial court’s denial postjudgment. This argument is incorrect: our rule has long been that ‘a party against whom an interlocutory [order] has been rendered will have his right of appeal when . . . the same is merged in a final judgment disposing of the whole case.'” He was joined by Justices Guzman, Lehrmann, Boyd, Blacklock, and Bland.
Justice Green dissented in no uncertain terms: “[B]y applying a myopically permissive interpretation of the interlocutory appeal statute, the Court concludes—in defiance of all common sense—that an interlocutory appeal of a trial court’s denial of a motion to compel arbitration is not required, and a challenge to such an order can wait until after a trial on the merits.” He was joined by Chief Justice Hecht and Justice Devine.
“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.
Silence may be golden, but it does not clearly compel the arbitration of class claims. In Robinson v. Home Owners Management Enterprises, the Texas Supreme Court held that: “(1) arbitrability of class claims is a ‘gateway’ issue for the court unless the arbitration agreement ‘clearly and unmistakably’ expresses a contrary intent; (2) ‘[a] contract that is silent on a matter cannot speak to that matter with unmistakable clarity’; and (3) an agreement to arbitrate class claims cannot be inferred from silence or ambiguity—an express contractual basis is required.” No. 18-0504 (Nov. 22, 2019) (footnotes omitted).
