The Texas Supreme Court has released a slew of 13 opinions with today's orders, exceeding last week's unexpectedly large total by five. These will take some time to review and digest. In the meantime, PDFs of all the new opinions are available here.
In Osborne v. Jauregui, Inc., a dispute over a defectively built home,a divided panel of the Third Court of Appeals has reversed and remanded the trial court's judgment declining to award the plaintiffs attorney's fees and denying an intervening insurer's subrogation claim.
Plaintiffs sued the architect/builder and several subcontractors, alleging DTPA violations and other causes of action. Their homeowners insurer (State Farm) intervened to assert subrogation rights for benefits previously paid. Plaintiffs settled with all defendants except the builder, against whom they proceeded to trial and obtained an $835,158 jury verdict. After applying a dollar-for-dollar credit for the $1,260,500 in settlement proceeds, the trial court refused to award attorney's fees under the DTPA, denied State Farm's subrogation claim, and rendered a take-nothing judgment. Plaintiffs and State Farm appealed.
The appellate court first concluded that plaintiffs were "prevailing parties" entitled to attorney's fees under the DTPA, even though the settlement credit negated the jury's damage award. Noting a split of authority on this issue, the court distinguished this case on the basis that it did not involve prior payments by the same defendant against whom plaintiffs had gone to trial. Because plaintiffs prevailed against the lone remaining defendant, who had not contributed to the settlement, they were entitled to fees. The court remanded for calculation of the appropriate amount.
Addressing State' Farm's issues, the court of appeals acknowledged the Texas Supreme Court's recent decision in Fortis Benefits v. Cantu, which held that contract-based subrogation rights trump equitable considerations. Although the court of appeals criticized the positions State Farm took in the litigation and noted that State Farm did not allocate the settlement proceeds to losses covered by insurance payments, it nevertheless reversed and remanded the subrogation issue so that the trial court could review the contractual subrogation language under Fortis Benefits and determine whether the policy or equitable principles control.
Justice Puryear dissented, citing his belief that plaintiffs were not prevailing parties in light of the one-satisfaction rule and thus are not entitled to attorney's fees. Applying Fortis Benefits, Justice Puryear further concluded that the insurance contract governed the subrogation issue and that State Farm was entitled to subrogation against the settlement funds.
This is a very interesting case. When the dust settles, I expect the supreme court will give it a close look.
Yesterday, the Texas Supreme Court issued an order increasing filing fees for proceedings in the supreme court and the courts of appeals. The increase takes effect September 1, 2007. Consult the order to avoid any glitches that might result from sending checks in the wrong amount.
(Thanks to Pam Baron for the tip.)
IN THE SUPREME COURT OF THE BLAWGOSPHERE
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No. 07-123
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In re Blawg Review
PER CURIAM:
This case presents issues involving patent infringement, trademark and copyright violations, defamation, free speech, arbitration, expert testimony, jury misconduct, cumulative error, attorney’s fees, and costs. The parties have provided extensive briefs, and we have received several amicus curiae submissions. Finding no error, we affirm.
BACKGROUND
Blawg Review is the blog carnival for everyone interested in law.[1] Each weekly issue consists of blog posts from lawyers, law professors, and law students. This week, the Editor of Blawg Review has designated theTexas Appellate Law Blog as pro tem Supreme Court of the Blawgosphere. As such, the Court has final discretion regarding the issues presented here.
DISCUSSION
I. Patent, Trademark, and Copyright
David Lat at Above the Law collects a number of links regarding Nixon Peabody's now-famous firm song, including some of his own prior posts. Denise Howell at Between Lawyers offers some suggestions for how the firm should have reacted instead of threatening legal action, while Frank Pasquale at Concurring Opinions discusses the fair use issues Lat's unapologetic approach raises.
Brett Trout at Blawg IT evaluates Lionsgate Entertainment's claim that T-shirts emblazoned with the phrase "Nobody Puts Baby in the Corner" from the movie Dirty Dancing violate the Lanham Act, even though no one has registered that slogan as a federal trademark and copyright protection does not apply. Ron Coleman offers another take on the subject at Likelihood of Confusion.
The Chicago IP Litigation Blog's R. David Donoghue informed us that movie critic Roger Ebert has withdrawn Disney's (and co-host Richard Roeper's) right to used his trademarked thumbs-up/thumbs-down rating system, which he co-owns with the late Gene Siskel's estate.
Finally, at Patent Baristas, guest blogger Bill Gallagher asks whether the tide of willful patent infringement litigation is receding.
II. Defamation and Free Speech
BeldarBlog extends an interesting invitation to Senator John Kerry, having noted that he permitted the statute of limitations to lapse for any defamation claim he may have had against the authors of Unfit for Command: Swift Boat Veterans Speak Out Against John Kerry.
J. Craig Williams of May It Please the Court identifies the law blogs judges most often read.
At LexBlog, Colin O'Keefe posts a detailed assessment of AmLaw 200 firms' participation in the blawgosphere, and Rob La Gatta passes on some do's and don'ts of judicial blogging. In another LexBlog post, Kevin O'Keefe mentions Texas District Judge Susan Criss, whose blog As the Island Floats has received national attention lately.
III. Arbitration
Disputing discusses In re Merrill Lynch Trust Co., the new Texas Supreme Court decision declining to adopt concerted-misconduct equitable estoppel as a means by which non-signatories to an arbitration agreement may nonetheless compel arbitration.
IV. Expert Witnesses
We learn what S. COTUS at Appellate Law and Practice really thinks about the Tax Court trial involving whether a sex change operation was deductible as medical treatment and the government's choice of expert witnesses.
V. Jury Misconduct
At Deliberations, Anne Reed discusses the Seventh Circuit opinions arising from the trial of former Illinois governor George Ryan and his aide, who were convicted of improperly steering state contracts for their own benefit. Decision of the Day describes the affirmance (or was it the conviction?) as close enough for government work.
VI. Cumulative Error
Scott Greenfield sets out the fallacy of "true believers" at Simple Justice.
The WSJ Law Blog reports that Merck's refusal to settle with any of the 45,000 people who have sued claiming that its Vioxx painkiller caused a heart attack or stroke appears to be paying off. Tort Deform presents another view of this story.
VII. Attorney's Fees and Costs
At Law.com's Legal Blog Watch, Carolyn Elefant ponders a new benchmark for legal services—the $1,000 hourly rate.
Greg May at the California Blog of Appeal adds to the discussion of alternative appellate attorney's fee agreements by focusing on flat fees, while Blawgletter—who, ironically, is partners with a member ofthe $1,000-an-hour club—goes so far as to suggest that the hourly fee must die.
The Permutter and Schuelke Blog ruminates on contingent fees as a form of value billing.
Over at Build a Solo Practice, LLC, Susan Cartier Liebel writes that lawyers who blog about what they love will get more clients (and thus earn more fees) and feel good at the same time.
Mary Minow of the LibraryLaw Blog revels that Justia.com is making full-text federal district court orders and opinions available online for free.
Daniel Solove at Concurring Opinions tells us about AltLaw, a free research tool that enables the user to search all federal appellate and U.S. Supreme Court decisions within the past 10 years using advanced queries. At Lawgarithms, Denise Howell mentions AltLaw in a post focusing on public.resource.org's efforts to create a comprehensive internet repository of federal and state case law and codes. Finally, Futurelawyer's Rick Georges reports on the National Archives and Records Administration's efforts to provide free access to the Electronic Code of Federal Regulations.CONCLUSION
For the foregoing reasons, the judgment below is affirmed.
Blawg Review has information about next week's host, and instructions how to get your blawg posts reviewed in upcoming issues.
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[1] The Court need not decide whether "blawg" or "law blog" is the correct descriptive term and thus reserves that question for another day.
The Texas Supreme Court ended its summer recess with a bang by issuing seven opinions today.
In In re H&R Block Financial Advisors, Inc., the per curiam Court conditionally granted mandamus relief from a trial court's order refusing to stay the plaintiffs' lawsuit in light of an arbitration clause. The Court rejected the plaintiffs' attempts to avoid arbitration with their investment advisor and his firm over Enron-related losses because the firm had changed its name and because the advisor did not sign the investment agreements in his personal capacity.
In In re Merrill Lynch Trust Co., the Court conditionally granted mandamus relief and compelled arbitration against employees of the entity with whom plaintiffs agreed to arbitrate, but not affiliates of that entity. With respect to the employee, the Court reasoned that the substance of plaintiffs' lawsuit was against the signatory, even though it was not named as a party, and that the signatory would be liable for the employee's torts. Regarding the affiliates, the Court rejected "an estoppel theory based on substantially interdependent and concerted misconduct" as a basis for imposing an obligation to arbitrate upon a nonsignatory, even though the case was governed by the Federal Arbitration Act and the Fifth Circuit has recognized such a theory. Justice Hecht (joined by Justice Medina and in part by Justice O'Neill) and Justice Johnson (joined by Justice Wainwright) each issued opinions concurring and dissenting.
In Energy Service Co. v. Superior Snubbing Services, Inc., the Court held that a Worker's Compensation-subscribing employer's agreement to indemnify a person and that person's contractors was an agreement with the contractors for purposes of the Worker's Compensation Act, as amended in 1989. Justice Johnson (joined by Justices Wainwright, Green, and Willet) dissented.
In Fort Worth Independent School District v. Service Employment Redevelopment, the per curiam Court continued the trend of remanding breach-of-contract cases against governmental entities to allow plaintiffs to argue that the legislature waived sovereign immunity under new Sections 271.151-.160 of the Local Government Code.
In Gaines v. Kelly, a no-evidence summary judgment case, the Court held that the borrower/plaintiff presented no evidence that a mortgage broker had apparent authority to bind a lender and therefore rendered judgment that the plaintiff take nothing on the borrower's claim against the lender based on the mortgage broker's alleged misrepresentations.
In In re Kaplan Higher Education Corp., the per curiam Court conditionally granted mandamus relief from a trial court's order refusing to compel arbitration under an agreement between a vocational college and 45 of its students, even though the students had dropped their direct claims against the college and were asserting claims against only the president and admissions director, because the substance of the action was fraudulent inducement and because the college would have been liable for the judgment under the Education Code and common law.
The following statement from Elledge v. Friberg-Cooper Water Supply Corp. (per curiam) says it all: "We reject the court of appeals' 'obiter dictum' label. Our statements that the two-year statute [of limitations, rather than the four-year statute] applies to unjust enrichment claims, though not essential to the outcomes in HECI [Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998)] and Wagner & Brown, [Ltd. v. Horwood, 58 S.W.3d 732 (Tex. 2001)], should have been followed."
Ouch!
In AXA Financial, Inc. v. Roberts, a consolidated interlocutory appeal and mandamus proceeding previously discussed here, the Third Court of Appeals has turned away efforts to compel arbitration under both the Texas and federal statutes. The court first held that it lacked jurisdiction over the interlocutory appeal because the notice of appeal was not filed timely (within 20 days of the district court's order denying the motion to compel arbitration) and because a "motion to reconsider" neither extended the appellate timetable nor qualified as an independently appealable order. Considering the mandamus petition, the court of appeals concluded that the relator failed to establish the existence of an arbitration agreement covering the dispute and that the district court acted within its discretion in refusing to consider "new" evidence submitted with the motion to reconsider.
This opinion contains a good summary of Texas arbitration law, particularly the procedure and burdens of proof relating to a motion to compel arbitration. The lessons learned are (1) remember that an appeal from an order denying a motion to compel arbitration is accelerated, making the notice of appeal due in 20 days rather than the usual 30; and (2) if you are the movant, gather and present your evidence on the first go-round because you might not get a second chance.
The State Bar Appellate Section and Texas Bar CLE are co-sponsoring the 21st Annual Advanced Civil Appellate Practice Course, which will take place September 6-7, 2007 at the Four Seasons in Austin. Related events are the ever-popular Appellate Boot Camp on September 5 and the Section's annual meeting on September 6, which will be followed by a cocktail reception with the judiciary. A registration brochure is available here.
I strongly encourage any lawyer interested in appellate practice to attend this program. The topics are always timely, and the speakers and written materials are always informative. And if you think this group is dull, you've got another thing coming. In connection with the annual meeting, the Appellate Section is holding its first Appellate Song Lyrics Contest, in which contestants are to alter the lyrics of a well known song to give it an "appellate" touch. You can find the contest rules here or in the Summer issue of The Appellate Advocate, which should be hitting mailboxes now. The submission deadline is 5:00 p.m. on Wednesday, August 29.
Per How Appealing:
The U.S. Supreme Court has issued a "Memorandum to Counsel" about the forthcoming revisions to that Court's rules: You can access the five-page memorandum at this link. Among other things. the memorandum suggests that the Court will begin making electronically-filed briefs available for access over the Court's own web site.
The number of RSS and e-mail subscriptions to the Texas Appellate Law Blog has more than doubled over the past month. This increase in readership has prompted me to solicit feedback from those of you who may be inclined to provide it.
What additional features would you like to see on this blog? What aspects do you find particularly useful? What could I do differently to make the blog a better resource for trial lawyers, in-house counsel, solo and small firm practitioners,and others who may have matters pending before the Texas appellate courts or the Fifth Circuit Court of Appeals?
Feel free to use the "comments" link or to e-mail me at todd@appealsplus.com. Thanks in advance.
Earlier this year, Jeffrey Kyle took over for Diane O'Neal as clerk of the Third Court of Appeals here in Austin. With that change came a significant revision to the Court's local practices. Before, an appellee could file its brief anytime up until the case was formally submitted to the Court, which could occur several months (or longer) after the filing of appellant's brief. Now, in conformity with Texas Rule of Appellate Procedure 38.6, appellee's brief is due 30 days after appellant's (20 days if the the appeal is accelerated), and appellant's reply brief is due 20 days later. The Court now requires a motion for extension of time to push these deadlines back.
The online version of the Court's local practice guide (¶57) reflects this change. The printed versions I have seen do not. Moral: Don't rely on memory when advising clients (or yourself) about impending deadlines. As stated here before, always check the rules.
A recent post from Susan Cartier Liebel over at Build a Solo Practice, LLC (entitled The Cockroach of the Legal Profession—The Billable Hour) has spurred me to comment on the continuing viability of the billable hour as it relates to appellate practice.
In my previous life as a big-firm lawyer, the billable hour was ingrained in the very fabric of my being. Every aspect of my days (and sometimes my nights) was measured in 6-minute increments. Since opening my own shop last year, I have come to believe that appellate law is particularly well suited to alternative fee structures and have offered some different fee alternatives to my clients.
Certain features of appellate practice make breaking away from the billable hour possible, depending on the point at which the appellate lawyer becomes involved. In a pure appeal situation—when the trial court has signed an appealable interlocutory order or final judgment—the universe of facts and information is limited by a finite record, sharply restricting the number of curve balls your opponent can legitimately throw your way. In this situation, based on the length of the trial, the volume of the underlying pleadings, and the issues involved, it is possible to estimate the time that will be required to handle the appeal and come up with a flat fee proposal that makes sense for both the lawyer and the client.
In the right situation, a contingent fee may be a possibility. This alternative makes the most sense when a client has obtained a significant judgment and the other side is taking an appeal. However, a reverse contingent fee may be suitable when appealing a large monetary judgment. In that instance, appellate counsel would be paid based on the savings obtained from the original judgment amount.
The billable hour is often criticized for encouraging lawyers to generate revenue by churning files and for providing little or no direct reward for good performance. Yet, we seem to have difficulty parting with the billable hour as the standard for measuring our worth. By offering other options (including hybrid billable-alternative structures), appellate counsel can assure clients that they are adding value to the case while (hopefully) increasing their own bottom line.
In this post, the Permutter and Schuelke Blog reports on a new article in the Baylor Law Review following a two-year survey of Texas district judges' views on the "litigation crisis." Of the 78 percent of all Texas district judges responding, more than 80 percent do not think further tort reform is necessary. Interestingly, more respondents thought that juries had awarded damages that were too low rather than too high.
UPDATE: Click on the "comments" link for electronic access to the article, courtesy of Brooks Schuelke and the Baylor Law Review.
In In re Katrina Canal Breaches Litigation, the Fifth Circuit has rejected several insurance policyholders' attempts to obtain coverage for water damage caused by Hurricane Katrina, despite exclusions for damages caused by "flood," based on allegations that the inundation of water into the City of New Orleans resulted from the negligent design, construction, and maintenance of the levees along three canals. The plaintiffs argued that the policies were ambiguous because the flood exclusions did not clearly exclude coverage for water inundation caused by negligence. The circuit court held that, aside from any negligence, the policy exclusions unambiguously precluded recovery.
Update: Here is a list of all counsel involved in the Fifth Circuit appeal. See the WSJ Law Blog for some interesting coverage and comments, as well as a YouTube video set to Led Zeppelin's When the Levee Breaks.
I recently received a motion from opposing counsel that relied on (and even block-quoted) an appellate procedural rule that was superseded nearly 10 years ago. The motion sought leave to supplement the appellate record, which is not required under the "new" rules. Instead, any party is authorized to direct the clerk or court reporter to prepare, certify, and file in the appellate court a supplemental record, which automatically become part of the appellate record. See Tex. R. App. P. 34.5(b), 34.6(b).
Every justice, staff attorney, or law clerk at the court of appeals will recognize this error and will know that the lawyer either (1) has not handled an appeal within the last 10 years, or (2) didn't bother to check the rules before filing this motion (or both). You can avoid wasting the Court's time and protect your credibility as an appellate advocate by reviewing the rules applicable to any motion you intend to file.
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