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Hot Topics in Constitutional, Civil Rights and Local Government Law

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Medicare Secondary Payer Procedural Guidance

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MedicareSubrogation

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PremisesLiabilityUpdate

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How to Get the Most Out of Your Relationship with Your Law Firm

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Product Liability Update

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Supreme Court: Texas Tort Law Update

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Supreme Court Update: Texas Insurance Law Update

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Claims Handlers Checklist — Third Party Liability Claims

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Social Media Legal Issues — Virtual Friends/Real Problems

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The Twenty-Year Kerfuffle: The Texas Religious Freedom Restoration Act

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WindsweptHalls

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Opinion from Court of Appeals (00345566)

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Paper

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Exhibits

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Insurance Law Update - Texas Supreme Court

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Hot Topics in Constitutional and Employment Law

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First Party Property and Premises Update

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Tort Reform and Construction Law and Exhibits

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Clauses, Agreements, and Rules to Beat the Construction Litigation Frenzy

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Clauses, Agreements, and Rules to Beat the Construction Litigation Frenzy

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Insurance Law Update—Texas Supreme Court

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Paper

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Exhibits

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Hot Topics in Constitutional, Civil Rights and Local Government Law

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Hot Topics in Employment Law: Changes and Pending Legislation

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Home

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We aren’t your ordinary law firm.

At Fanning Harper Martinson Brandt & Kutchin, P.C., we are dedicated to helping the insurance industry, businesses, governmental entities, educational organizations and individuals facing a variety of legal issues. We bring our clients unmatched expertise rooted in 50 years of experience handling trials and appeals in state and federal courts across Texas. And our goal is always the same: solving our clients’ problems by providing aggressive, effective representation while consistently maintaining the highest ethical standards. Why does that make us so extraordinary? Because for us this is not just an abstract "mission statement," it's the way we practice law each and every day. For additional information about Fanning Harper Martinson Brandt & Kutchin, P.C., please contact us via email at dmartinson@fhmbk.com or call 214.369.1300.

News & Legal Updates

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Contact Us

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Fanning Harper Martinson Brandt & Kutchin, P.C. Attorneys & Counselors at Law Two Energy Square 4849 Greenville Avenue, Suite 1300 Dallas, Texas 75206 Telephone: 214.369.1300 Fax: 214.987.9649 Map/Directions [contact-form 1 "Contact form 1"]

About Us

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Our firm began more than fifty years ago with a focus on helping insurance companies, working alongside businesses and individuals across various industries. Today the depth and breadth of our experience allows us to provide exceptional legal services not only to the insurance industry, but also to businesses, governmental entities, educational organizations and individuals facing legal challenges. However, all the experience in the world means very little unless it is rooted in the highest professional and personal ethics. By maintaining a higher standard for ourselves, we make sure our clients receive aggressive, effective representation delivered with the highest levels of personal and professional integrity. Over the past 50 years we have built strong relationships with clients based on our ability to understand and solve their problems quickly and efficiently. We work side-by-side with our clients and believe in absolute availability and responsiveness. Experience, integrity and relationships. A successful law firm can be measured by these three factors. And when you combine all three an exceptional law firm emerges. There simply is no other law firm like ours. We know what we’re doing. We do what’s right. We get the job done.

Practice Areas

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Fanning Harper Martinson Brandt & Kutchin, P.C. is more than a group of highly-skilled attorneys. The trial experience and expertise within our firm enable us to create strategic teams devoted to serving your exact legal needs.

Toxic Tort Defense

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We began defending toxic tort cases in the 1980s, beginning with asbestos and silica lawsuits. Over the years we have been called on by insurers and other companies to assist in the defense of mass tort lawsuits involving mixed dust, chemical soup, benzene, pharmaceutical products, nutritional supplements, mold and a variety of other alleged toxic substances. With the advent of tort reform we have defended clients in asbestos and silica lawsuits assigned to the two multi-district litigation (MDL) courts created to manage all asbestos and silica lawsuits filed in the Texas state courts. From the filling of the complaint until the lawsuit is returned to the original court, we are there to defend our clients. As a result, our firm has gained invaluable knowledge about the MDL courts, the administrative management of the lawsuits in those courts and rulings by the MDL judges that directly impact our clients.

Medicare Secondary Payer and Reporting

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Prompt Payment of Claims Update

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The Role of Arbitration in Litigation Today

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Designation of Responsible Third Parties "It’s his fault; not mine."

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Supreme Court Update-- Insurance and Tort Law

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Insuring Contractual Risk Transfers in Texas

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Premises Liability Law in Texas

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TexasLawyer

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CE/CLE

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Fanning Harper Martinson Brandt & Kutchin, P.C. is proud to be recognized by the Texas Department of Insurance, the State Bar of Texas and the Texas Education Agency as an authorized provider of CE, CLE and CPE, respectively. We often furnish complimentary programs for clients and industry-related groups in order to provide information and education about issues affecting their profession, as well as much-needed continuing education credit. Additionally, our attorneys are frequently invited to speak at special functions and training programs hosted by professional and civic organizations. If your company or association is interested in reserving a speaker for your next meeting, please feel free to contact our attorneys directly. Or contact our Director of Continuing Education, Josh Kutchin, to learn more about our programs. Phone, 972-860-0350. E-mail, jkutchin@fhmbk.com.

Attorneys

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At Fanning Harper Martinson Brandt & Kutchin, P.C., the difference is our attorneys. We are seasoned trial lawyers with an unwavering desire to understand our clients and solve their legal issues.

Robert Fanning

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Bar Admissions: Texas, 1959 U.S. Court of Appeals 5th Circuit U.S. Court of Appeals 11th Circuit U.S. District Court Northern District of Texas U.S. District Court Southern District of Texas U.S. District Court Western District of Texas U.S. District Court Eastern District of Texas U.S. Supreme Court Education: Southern Methodist University School of Law, Dallas, Texas, 1959 J.D. Honors: Delta Theta Phi Dallas Baptist University, 1997 Doctor of Humanities Baylor University, Waco, Texas, 1953 B.B.A. Published Works: Bad Faith and Other Extra-Contractual Actions Against Insurers For The Defense, November, 1985 Honors and Awards: Recipient, Exemplary Service Medal, San Marcos Academy, 2003 Recipient, Distinguished Service Medal, San Marcos Academy, 1970 Outstanding Young Texan, 1975 Who's Who In America Who's Who in American Law Who's Who in the Southwest Who's Who in Religion Fellow, Dallas Bar Foundation Fellow, State Bar Foundation Professional Associations and Memberships: Dallas Bar Association Member State Bar of Texas Member American Bar Association Member American Judicature Society Member Texas Association of Defense Counsel Member Southern Methodist University Law School, 1969 - 1972 Board of Visitors Southern Methodist University Law School, 1967 - 1969 Alumni Board Southern Baptist Convention, 1970 - 1978 Vice Chairman, Board of Trustees, Annuity Board San Marcos Baptist Academy, Board of Trustees, 1961 Member and Chairman National Board of Fellowship of Christian Athletes, 1974 - 1978 Trustee Council for Institutional Development, Baylor University, 1972 - Present Member Dallas Baptist University Foundation, 1988 - Present Member, Board of Directors Park City Club, 1991 - 1993 Presiding Officer, Board of Governors Defense Research Institute Member Southern Methodist University Law School, 1999 - Present Executive Board Russell H. Perry Free Enterprise Award Dinner, 1996 Chairman, Dinner Committee Annuity Board of Trustees, Southern Baptist Convention, 1970 - 1978 Vice Chairman of the Board National Board of Fellowship of Christian Athletes, 1960 - 1970 Board Member Dallas Board of Fellowship of Christian Athletes, 2001 - 2003 Board Member Fanning, Harper & Martinson Founding Shareholder Past Employment Positions: Judge Advcate General's Office, Fifth Air Force, Tokyo, Japan, Prosecutor Birth Information: 1931, Dallas, Texas, United States of America

Appellate Advocacy

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Our appellate practice section strives to ensure that each client's rights to a fair trial are protected, and that their interests are aggressively promoted through all stages of the case. Our appellate attorneys often are involved at trial in order to maximize the success of any appeal. And if the trial was handled by another firm, we work with the original attorneys to identify appealable issues, write the brief and argue the appeal.

Bad Faith Litigation

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Our attorneys have represented insurance companies and related entities in litigation since the firm was founded fifty years ago. Our experience includes prosecuting declaratory judgment actions, defending against coverage and extracontractual claims in state and federal court, and handling any mandamus or appeal issues that may arise. Our collective knowledge and our years of experience allow us to mount aggressive defenses against virtually any allegations of bad faith.

Commercial Litigation

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Through our work with insurance companies and their policyholders, we are extremely familiar with general liability issues and ideally suited to represent businesses in all of their commercial disputes. Our attorneys have a keen understanding of the real-world litigation exposure confronting businesses on a daily basis, and our trial skills are honed to provide each business with a results-oriented approach. We have represented small and large businesses in matters ranging from employment disputes, contract disputes, dissolutions, RICO claims, fiduciary disputes, libel and slander and general liability issues.

Construction Litigation

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We understand the complicated relationships that arise during the course of design and construction. Our attorneys regularly defend owners, architects, general contractors, subcontractors, and material suppliers against construction-related claims involving both commercial and residential construction.

Employment Law

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We defend a wide variety of employment-related claims made against our corporate, business and local governmental clients, representing them from the pre-suit stages all the way through appeal. We also counsel client management and supervisors regarding employment issues, guiding them away from actions that may give rise to a claim.

Estate Litigation And Will Preparation

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Estate planning and litigation is a staple of our firm, handling all stages from will and trust drafting to probate to contested heir litigation. We aggressively litigate disputes regarding the distribution of assets, the transfer of real estate and the payment of outstanding debts in order to achieve the best possible results for our clients.

General Liability Litigation

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We represent insurance companies, third party claims administrators, private businesses and governmental entities in all aspects of general liability litigation. With 50 years of experience in a defense-oriented practice, we’re able to quickly and accurately analyze issues, risks, and exposures. Our clients rely on our ability to rapidly identify the most effective strategies and vigorously defend claims for damages.

Insurance Litigation And Coverage

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For 50 years, our firm has built its name representing insurance companies. Our attorneys are nationally recognized experts in the insurance industry, and we are well versed in all aspects of insurance litigation and law. We understand the unique challenges faced by today’s insurance professionals, and our goal is to help clients manage and meet those challenges in and out of the courtroom. Knowing the law and the intricacies of this specialized practice allows us to represent our clients with seasoned judgment, common sense and accomplished advocacy skills. Our extensive experience includes claims and lawsuits involving:

Commercial property
Commercial general liability
Surplus lines
Business interruption
Boiler and machinery
Ocean and inland marine
Builder’s risk
Employer’s liability
Commercial and personal vehicles
Homeowners
Personal liability
Umbrella and excess liability

Insurance Professional Liability Litigation

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We regularly defend insurance adjusters, agents and brokers against allegations of professional negligence, breach of a heightened duty of care or violations of various insurance codes. We approach insurance professional liability defense by making sure we thoroughly understand both how the professional works and the intricacies of the subject matter at issue.

Local Government Defense Law

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We represent all levels of local governments and public officials. Our attorneys have a defense-oriented litigation focus with a wealth of experience aggressively defending local government entities such as counties, cities, appraisal districts, school districts and community college districts. Our experience includes representing local governmental entities in a wide variety of matters, including:

Civil rights
Class action discrimination
Discrimination under Title VII
Fair housing
False arrest
Personal injury and wrongful death
Whistleblower claims
Wrongful discharge/termination
Equal Employment Opportunity Commission (EEOC) and the Texas Commission on Human Rights claims
Americans with Disabilities Act (ADA) claims and compliance
Discrimination on the basis of race, sex, age, religion, or national origin under state and federal law

Premises Liability Litigation

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Our attorneys represent businesses and governmental entities in premises liability claims involving falls and other injuries sustained on property, as well as allegations of inadequate security or negligent maintenance of premises.

Products Liability Litigation

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We have handled numerous product liability cases, ranging from catastrophic injuries to wrongful death. Our experience includes defending against claims involving multiple parties and class actions arising from a number of different products, including allegations of defective design, defective manufacture, and failure to warn.

Professional Negligence Litigation

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With solid experience defending liability claims brought against professionals in health care facilities, our attorneys also represent nursing homes and assisted living facilities either directly or under comprehensive general liability or errors and omissions insurance policies.

School Law

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Our school law experience covers a wide variety of legal matters including civil rights cases, employment disputes, teacher/employee sexual misconduct, school discipline controversies, personal injury, contract matters and school boundary disputes.

Sexual Abuse Litigation

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As litigation has expanded in response to the increased volume of sexual abuse claims, we have handled numerous cases involving clergy misconduct and allegations against day-care centers and non-profit organizations.

Toxic Tort Litigation

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Trucking Emergency Response

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Our firm represents carriers and trucking companies in the defense of owners and operators of all types of commercial vehicles, with a thorough understanding of the state and federal regulations which control interstate and intrastate commerce. Our experienced team of attorneys and accident reconstructionists respond quickly and conduct thorough investigations, allowing us to gather important information, preserve evidence and protect our clients’ interests. By responding quickly and aggressively we are better able to maximize our defensive position and minimize the impact that a serious accident can have on an operator and its carrier.

Don D. Martinson

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Don Martinson joined the firm in 1973. His practice at Fanning Harper Martinson Brandt & Kutchin, P.C. is concentrated on mass tort and related products liability litigation, health care liability litigation, bad faith litigation, insurance coverage analysis and related insurance coverage litigation, and appellate advocacy. He also devotes much of his practice to insurance coverage disputes arising out of commercial construction defect lawsuits being filed by real estate property developers and owners against general contractors and their subcontractors, and on disputes between primary, umbrella and excess carriers resulting from catastrophic bodily injury and property damage claims. Throughout the late 1970s and early 1980s, Don’s practice focused on the defense of property insurance companies in first-party property damage lawsuits, mostly arising out of commercial and residential arson fires. When the Texas Supreme Court recognized a new tort in the mid-1980s, the “duty of good faith and fair dealing” owed by insurers to insureds, Don’s practice shifted to the defense of the new “bad faith” lawsuits filed primarily against property and worker’s compensation insurers. By the late 1980s he was involved in the defense of declaratory judgment / bad faith lawsuits filed in Texas by Fortune 500 corporations against their CGL insurers seeking coverage for the corporation’s mass toxic tort and pollution clean-up liability exposures. Don received his B.A. from The University of St. Thomas and went on to the Baylor University School of Law where he received his J.D. cum laude in 1973. As a law student, he served on the Baylor Law Review and was selected as a member of the Harris Honor Society. A member of the State Bar of Texas and the Texas Association of Defense Counsel, Don is also a Life Fellow of the Texas Bar Foundation and Fellow of the Dallas Bar Foundation.

Barry H. Fanning

admin — Fri, 01 Apr 2011 18:00:53 +0000

Barry Fanning joined Fanning Harper Martinson Brandt & Kutchin, P.C. in 1973. He has nearly four decades of experience handling many large loss construction cases for a variety of different subcontractors, home builders and professionals. His practice also includes a wide range of complex insurance-related controversies, from products liability, trucking liability, premises liability and sexual abuse coverage, to commercial and construction litigation matters. Other areas of expertise include estate planning, wills and probate work. A native Texan, Barry grew up in Dallas and received his B.B.A. from Baylor University. He earned his J.D. from the Baylor Law School in 1973. Barry serves on numerous church and community boards and organizations. He served as Chairman of the Young Life Dallas Region Fund Drive through 2009 and the Advanced Gifts Chairman of the Community Services Fund Drive of the Downtown YMCA from 2007 through 2009. Barry enjoys boating, handball, golf, snow skiing and rollerblading.

Marc H. Fanning

admin — Fri, 01 Apr 2011 18:26:32 +0000

Marc Fanning serves as the Chairman of the Board of the law firm of Fanning Harper Martinson Brandt & Kutchin, P.C. His practice is focused on general casualty claims with a particular emphasis on property issues, including commercial and residential claims, first-party claims and construction defect and premises liability cases. He additionally is involved in trucking defense and developed the firm's "Emergency Response Team" that is available 24/7 to respond to truck accidents. After earning his B.B.A from Baylor University in 1976, Marc graduated from the Baylor School of Law in 1977. He served as the past co-chair of the Dallas Bar Association Unauthorized Practice of Law Committee and was a member of the "Minority Participants Committee" of the Dallas Bar Association. An avid motorcyclist, Marc also enjoys church and community activities. He and his wife have four children and are proud grandparents as well.

Thomas P. Brandt

admin — Fri, 01 Apr 2011 18:30:18 +0000

Thomas Brandt serves as head of the local government and employment law section at Fanning Harper Martinson Brandt & Kutchin, P.C. One of the firm's members since 1992, Tom is an “AV” rated lawyer – the highest rating awarded by Martindale Hubbell – and has been named one of the state’s “Super Lawyers” by Texas Monthly magazine. Tom's practice includes representation of cities, counties, school districts, public officials and private sector clients in the areas of civil rights and employment law and has included significant cases at every level of the state and federal courts, including numerous cases before the appellate courts, the Texas Supreme Court, and even the United States Supreme Court. In addition to his active litigation practice, Tom also performs general counsel services for several local government entities and private businesses and has been chosen to perform high-profile public integrity investigations. On two separate occasions, Tom was hired by a major city in the Metroplex to investigate allegations of wrongdoing by that city’s police chief. His legal career started as a Dallas prosecutor handling hundreds of cases. Quickly promoted to the federal litigation section of the Dallas City Attorney’s office, Tom handled numerous trials and appeals in federal court involving a wide variety of civil rights cases, including excessive force, false arrest, race discrimination, class actions and constitutional challenges to the City’s sexually-oriented business ordinance. He assisted in the preparation of briefs and the presentation of oral argument before the United States Supreme Court in the landmark case of FW/PBS, Inc. v. City of Dallas, 493 U.S. 215 (1990). Tom has been a leader in the legal profession for many years. He has served in every leadership post in the Dallas Chapter of the Federal Bar Association, including that of President from 1997-1998. Under his guidance, the Dallas Chapter received national recognition for its outstanding programs and activities. An active leader in the St. Thomas More Society, Tom has served as a board member since the late 1990s and as President from 1999-2001. A 1985 graduate with a joint degree (J.D./M.P.A.) from the University of Texas Law School and the Lyndon B. Johnson School of Public Affairs, Tom was awarded a prestigious Rotary Foundation Scholarship in 1988 to study international and comparative law in New Zealand. Married since 1986, Tom and his wife Mary have six children, whose activites keep them experts at scheduling and logistics

Joshua T. Kutchin

admin — Fri, 01 Apr 2011 18:23:09 +0000

Joshua Kutchin is a member of the Board of Directors at Fanning Harper Martinson Brandt & Kutchin, P.C. and has practiced with the firm since 1984. He is licensed in all Texas State Courts and all four Federal Districts in Texas, and is certified in personal injury trial law by the Texas Board of Legal Specialization. Joshua has been awarded an “AV” rating by Martindale Hubbell, the highest rating available, and has been named one of the state’s “Super Lawyers” by Texas Monthly magazine. Joshua’s practice includes representation of general contractors, subcontractors, and material suppliers, relative to both residential and commercial construction disputes. His clients range from “sole proprietorship” contractors to Fortune 500 companies who are engaged in disputes involving design deficiencies, soil engineering issues, EIFS, materials defects, and a wide variety of similar matters. Joshua also defends personal and commercial auto claims, premises liability suits, and other general liability claims. After receiving his undergraduate degree with honors from Rice University in Houston, Joshua graduated from the University of Texas School of Law. He speaks frequently to claims groups and trade associations, and often presents programs specially tailored to meet the needs of the firm’s clients. Josh and his wife Heidi have been married since 1984. They have two sons, neither of whom has ever expressed the slightest interest in pursuing the practice of law.

Gerald B. Lotzer

admin — Fri, 01 Apr 2011 18:11:13 +0000

Gerald Lotzer is an experienced trial attorney who joined Fanning Harper Martinson Brandt & Kutchin, P.C. in 1988. His practice involves a variety of litigation areas, including automobile, construction, premises, products, medical malpractice and employment law matters. Before graduating from Baylor Law School in 1988, Gerald worked in the insurance industry as a litigation supervisor, assistant claims manager and home office claims supervisor in the property, casualty and worker’s compensation areas. He enjoys spending time with his wife and two sons, both UT-Dallas graduates, and tinkering with classic cars.

Ron M. Ihle

admin — Mon, 28 Mar 2011 21:20:26 +0000

Ron Ihle is a member at Fanning Harper Martinson Brandt & Kutchin, P.C. and has been practicing law since 1989. His practice focuses on toxic tort litigation, general litigation, product liability and premises liability. Originally from Oklahoma, Ron moved to Texas after graduating from Oklahoma City University Law School in 1988. While in law school, he was a member of the Law Review for three years and staff editor for one year. Prior to practicing law, Ron was a claims adjuster with American Fidelity Insurance and USF&G. Ron is married, with three children, and is involved in the children’s ministries at his church.

John F. Roehm III

admin — Fri, 01 Apr 2011 18:31:48 +0000

John Roehm joined Fanning Harper Martinson Brandt & Kutchin, P.C. in 2002 and is licensed to practice in all courts in the state of Texas, the Federal District Courts for the Northern, Eastern and Western Districts of Texas, the Fifth Circuit Court of Appeals and the United States Supreme Court. John’s practice includes representation of government entities and public officials in the areas of civil rights, school law, municipal law and employment law, and private sector clients in the areas of real estate, construction defect cases, personal injury litigation and ad valorem taxation in state and federal court. John began his legal career with the City of Dallas, has over twenty years of legal experience representing government entities and public officials, and has extensive trial and appellate experience. After receiving his undergraduate degree with honors from the University of Texas at Austin, John earned his J.D. from St. Mary’s University School of Law. While at St. Mary’s, he served on the Legal Research Board. His memberships include the State Bar of Texas, the Dallas Bar Association, the Texas City Attorneys Association and the Federal Bar Association. John has also served as President of the Dallas Chapter of the Federal Bar Association. A self-professed “'army brat”' growing up, he calls Texas home and is active in many civic organizations. John also enjoys traveling, snow skiing, tennis and golf.

Rocky Little

admin — Fri, 01 Apr 2011 18:28:28 +0000

Rocky Little has been a member of Fanning Harper Martinson Brandt & Kutchin since 2004. He is board certified in the field of Personal Injury Trial Law by the Texas Board of Legal Specialization, and has extensive jury trial experience. Rocky's practice focuses on many types of personal injury cases including general negligence, medical negligence, products liability, vehicular accidents, premises liability, Deceptive Trade Practices Act claims and wrongful death claims. He has also litigated a broad range of non-personal injury civil suits, including construction defect, professional negligence, mold damage and commercial disputes. A 1977 cum laude graduate of North Texas State University, Rocky went on to earn an M.B.A. in Finance at the University of Houston in 1978 and his J.D. from the University of Texas in 1986. He was admitted to the State Bar of Texas and the U.S. District Court, Northern District of Texas in 1987. Before law school, Rocky worked for five years in hospital finance management and accounting.

Dean Foster

admin — Fri, 01 Apr 2011 18:07:32 +0000

Dean Foster is a member of Fanning Harper Martinson Brandt & Kutchin, P.C. and has been with the firm since 2003. Admitted to the State Bar of Texas in 2001, he is licensed to practice in all four federal districts in Texas. Dean’s practice focuses mainly on insurance defense and litigation. A native Texan, Dean earned his undergraduate degree from the University of Texas at Austin. He was awarded his law degree from South Texas College of Law, where he was a member of the Law Review. Dean and his wife stay busy raising a young family. He also enjoys hunting, fishing and UT football.

Joshua A. Skinner

admin — Fri, 01 Apr 2011 18:21:15 +0000

Joshua Skinner is a member of Fanning Harper Martinson Brandt & Kutchin, P.C. and is an experienced trial and appellate attorney. Since joining the firm in 2003, Joshua’s practice has focused on school litigation, employment litigation, local government defense and appellate advocacy. He also serves as assistant general counsel and employment law counsel to various public and private entities, and has served as counsel on a wide range of civil rights and employment cases and appeals. Joshua received his undergraduate degree in English from the University of Dallas and his law degree at Ave Maria School of Law. He has been recognized as a “Rising Star” by Texas Monthly magazine and is a frequent speaker at on civil rights and employment law issues. Joshua is licensed in all Texas state courts, all United States District Courts in Texas, the U.S. Court of Appeals for the Fifth Circuit, and the U.S. Supreme Court.

Francisco Valenzuela

admin — Fri, 01 Apr 2011 18:08:46 +0000

Frank Valenzuela joined Fanning Harper Martinson Brandt & Kutchin, P.C. in 2007 and is a member whose practice focuses on school litigation, employment litigation, local government defense and serving as an assistant city attorney. Admitted to The Florida Bar in 2003 and State Bar of Texas in 2006, Frank is licensed to practice in all Texas and Florida state courts and the U.S. District Courts for the Northern District of Texas and Northern and Southern Districts of Florida. Prior to joining FHMB&K, Frank worked as Associate Corporate Counsel for the Morgan Management Corporation, which operates Morgan Buildings and Spas, Inc. and related Morgan companies. Originally from Miami, Frank received his undergraduate degree in Politics from the University of Dallas and his law degree from Notre Dame Law School, where he was on the Moot Court Team. He and his wife moved back to Dallas from Miami in late 2005 and are raising four sons. Frank enjoys spending time with his family and friends, including coaching soccer and playing sports.

John D. Husted

admin — Fri, 01 Apr 2011 18:19:16 +0000

John Husted is an associate at Fanning Harper Martinson Brandt & Kutchin, P.C. and is licensed in all Texas state courts and the U.S. District Court's Northern and Eastern District of Texas. Since joining the firm in 2007, his practice has focused on employment litigation, representation of public entities in general areas and in litigation, school litigation, and appellate advocacy. Originally from Indiana, John earned an undergraduate degree in History from the University of Dallas. Before becoming an attorney, he was a high school teacher and coach. While earning his law degree at Ave Maria School of Law, John was an Executive Officer of the Moot Court Board and competed as part of the School’s Trial Team. Today, he enjoys spending time with his wife and two sons, and visiting with family and friends.

Jennifer L. Kelley

admin — Fri, 01 Apr 2011 18:12:35 +0000

Jennifer joined Fanning Harper Martinson Brandt & Kutchin, P.C. in 2010. Her practice areas include insurance coverage advice and litigation and appellate advocacy. She worked as a briefing attorney for Justice Robert McCoy of the Second Court of Appeals in Fort Worth for two years before joining the firm. Jennifer received her B.A. from the University of North Texas, completing a double major in Finance and Marketing. She then went on to graduate from the Texas Wesleyan School of Law, where she served as a notes and comments editor for the Texas Wesleyan Law Review and as a Teacher’s Assistant for a Legal Research and Writing class. In addition to being a member of the State Bar of Texas, Jennifer is also a member of the Dallas Bar and the Tarrant County Bar Associations. Jennifer enjoys spending time with her family and traveling. She is also active in her church and in the community, volunteering for organizations such as The Family Shadetree and the ChildCareGroup.

Laura D. O'Leary

admin — Fri, 01 Apr 2011 18:24:57 +0000

Laura O’Leary joined Fanning Harper Martinson Brandt & Kutchin, P.C. in 2010. Her practice areas include local government law, school law, employment law, civil rights and appellate law. Admitted to the State Bars of Virginia in 1992, Connecticut in 1994, and Texas in 2010, Laura is currently licensed to practice in all Texas state courts. Laura previously worked in the litigation department of a mid-sized Washington, D.C. law firm. Born and raised in Rochester, NY, Laura received her undergraduate degree in psychology from the University of Pennsylvania and her law degree from the College of William and Mary where she was a member of the Law Review. Laura enjoys sailing, skiing, hiking, and spending time with her husband and teenaged children.

David R. Upham

admin — Thu, 31 Mar 2011 21:08:29 +0000

David Upham is of counsel at Fanning Harper Martinson Brandt & Kutchin, P.C., and is licensed to practice in the state of Texas. David is currently an assistant professor of Politics at the University of Dallas, where he regularly teaches undergraduate and graduate courses in constitutional law, administrative law, and American political thought. He has researched and published extensively in the field of constitutional history, and the history of the Fourteenth Amendment in particular. David holds a Ph.D. in Politics from the University of Dallas, and a law degree from the University of Texas, where he was an associate editor of the Texas Law Review. After receiving his law degree, he practiced for three years in the litigation section of a large international law firm. The focus of David's practice has been in administrative adjudication, the defense of governmental entities, and constitutional litigation.

The Seventh Annual Texas Legal Update

admin — Fri, 22 Jan 2010 01:54:01 +0000

5.5 hours of General CE Hot Topics in Constitutional and Employment Law; Post-Traumatic Stress or Dramatic Mess; First Party Property and Premises Update; Tort Reform and Construction Law; Clauses Agreements, and Rules to Beat the Construction Litigation Frenzy; Litigation Trends: Judicial Tort Reform; Insurance Law Update—Texas Supreme Court; Suits Against the Claim Professional “Or, Welcome to the Party!”; Common Law Marriage; Apportionment of Damages Based on Insured/Paid Expenses and Settlement Credit

Environmental Tort Defense

admin — Tue, 05 Apr 2011 01:08:32 +0000

Our attorneys boast extensive experience in a wide range of environmental and toxic tort litigation, including claims of personal injury, property damage and contamination. From individual lawsuits to large class actions and multi-district litigation, we have the experience and expertise to successfully defend companies against environmental tort claims.

Pharmaceutical Tort Defense

admin — Tue, 05 Apr 2011 01:11:06 +0000

With years of experience handling pharmaceutical cases, our firm has significant experience representing insurance companies, medical device manufacturers and drug makers against claims of products liability, failure to warn, drug and device liability, personal injury and more. Our attorneys have the expertise, trial skills and resources to effectively defend pharmaceutical tort cases of any size.

Mass Tort Defense

admin — Tue, 05 Apr 2011 01:12:29 +0000

Our firm has extensive experience handling mass tort litigation and related insurance coverage issues, as well as environmental litigation, pharmaceutical liability, toxic tort, and multiple-party tort litigation. Our commitment to preparation and our team approach in these matters allow us to efficiently and effectively handle complex disputes and class actions. Regardless of the size of the case or the number of parties, we have the ability, experience and resources to properly manage and defend these complex cases.

Texas Legal Update for Adjusters

admin — Mon, 04 Apr 2011 17:49:26 +0000

2.0 hours of General CE First Party Property and Premises Update; Insurance Law Update—Texas Supreme Court; Suits Against the Claim Professional; Apportionment of Damages

Legal and Legislative Update for Claim Professionals

admin — Mon, 04 Apr 2011 17:51:18 +0000

2.0 hours of General CE Medicare/Medicaid Liens, Medicare Set-Asides, Hospital Liens, Insurance Law Update – Texas Supreme Court, Litigation Trends: Judicial Tort Reform

Legal Update for Claims Professionals

admin — Mon, 04 Apr 2011 17:52:32 +0000

1.0 hours of General CE Insurance Law Update – Texas Supreme Court; Litigation Trends: Judicial Tort Reform; Suits Against the Claim Professional

SPRING 2008 NEWSLETTER FIRST AMENDMENT LAW UPDATE

admin — Tue, 01 Apr 2008 12:00:26 +0000

by Joshua Skinner and John Husted

UNITED STATES SUPREME COURT

* Davenport v. Wash. Educ. Ass’n, __ U.S. __, 127 S. Ct. 2372, 168 L. Ed. 2d 71 (June 14, 2007) A Washington law that required that public-sector unions receive authorization from nonmembers before spending their agency fees for election-related purposes was a reasonable, viewpoint-neutral limitation on public-sector unions acquiring and spending the money of government employees. It did not violate the First Amendment. Washington law prohibits labor unions from using the agency-shop fees of a nonmember for election-related purposes unless the nonmember affirmatively consents. An agency-shop agreement between a union and a government employer entitles the union to levy a fee on employees who are not union members but who are nevertheless represented by the union in collective bargaining, preventing free-riding by non-union employees. The law in question is a condition on the union’s exercise of the power, in essence, to tax government employees, by prohibiting expenditure of nonmember’s agency fees for election-related purposes without affirmative consent. The Supreme Court stated that the Washington law is not a restriction on how the union can spend “its” money; rather, it is a condition placed upon the union’s extraordinary state entitlement to acquire and spend other people’s money. Though content based, it does not violate the First Amendment for a state to require that unions receive affirmative authorization from a nonmember before spending that nonmember’s fees for election purposes.

FIFTH CIRCUIT

Reliable Consultants, Inc. v. Earle, __ F.3d __, 2008 U.S. App. Lexis 3102 (5th Cir. February 12, 2008) In a decision that is likely to be reheard en banc, a Fifth Circuit panel held that a Texas statute making it a crime to promote or sell sexual devices is an unconstitutional invasion of the privacy rights of consenting adults under the standard set forth by the United States Supreme Court in Lawrence v. Texas, 539 U.S. 558 (2003), the case that struck down Texas’ statute criminalizing sodomy between members of the same sex. Texas statute prohibits the promotion (which includes selling, giving, lending, distributing or advertising) of obscene devices. Obscene devices are defined as any device designed or marketed as useful primarily for the stimulation of human genital organs. The plaintiffs are retailers of sexual devices who sell sexual devices in Texas, but apparently market them as novelties. The plaintiffs filed suit claiming that that the Texas statute violated the Fourteenth Amendment substantive due process right of their patrons to engage in private intimate conduct free from government intrusion. Citing Lawrence, the panel held that adult sexual intimacy in the home is violated by Texas’ sexual devices statute because its primary justification is the upholding of “public morality” and Lawrence specifically held that public morality is an insufficient basis for placing a burden on adult sexual intimacy. There was a strong dissent from Judge Barksdale and the Fifth Circuit is currently considering whether to hear the case en banc. There is currently a split in the circuits and state supreme courts on the application of Lawrence to anti-obscenity laws in other states. * Jordan v. Ector County, __ F.3d __, 2008 U.S. App. Lexis 2333 (5th Cir. February 1, 2008) In order to establish a First Amendment retaliation claim, a plaintiff-employee must show that he or she engaged in speech on a matter of public concern. An employee can prove that he or she engaged in speech on a matter of public concern by establishing that he or she made “outward signs” of political affiliation that was in conflict with the interests of the decision-maker involved in the adverse employment action against the employee. When the longtime Ector County District Clerk decided against seeking reelection in 2002, two employees in the Clerk’s office, Jordan and Morgan, ran for the office. Morgan won. Jordan did not quit her job but continued to give some indications that she would run against Morgan in 2006. Morgan fired her in 2005. Jordan brought suit alleging that she was terminated in retaliation for her 2002 candidacy or her expected 2006 candidacy. The Fifth Circuit held that her anticipate 2006 candidacy, standing alone, was insufficient to establish that she had engaged in protected speech because she had not actually said that she would be a candidate in 2006. However, because Jordan ran for office in 2002 and, thereafter, gave vague indications that she might run in 2006, there was a continuity of speech sufficient to establish that her termination in 2005 could be connected to her candidacy in 2002. Moreover, Jordan’s efforts to run for office in 2002 was a matter of public concern protected by the First Amendment. The Fifth Circuit did not, however, state whether Jordan had a right to run for office that was protected by the First Amendment – just that her speech in connection with her 2002 candidacy was protected as outward signs of political affiliation. * Pruett v. Harris County Bail Bond Bd., 499 F.3d 403 (5th Cir. August 28, 2007), cert. denied, __ U.S. __, __ S. Ct. __, 170 L. Ed. 2d 62 (2008) A Texas statute, prohibiting bail bondsmen from soliciting individuals with outstanding warrants violated the First Amendment, because, since the county already routinely notified some arrestees of outstanding warrants by letter, solicitation by bondsmen did not increase the risk of flight, retribution, or destruction of evidence. It had been common practice for bondsmen to send solicitations to individuals subject to arrest warrants. Similarly, law enforcement officials frequently send letters to petty defendants giving them notice of open warrants against them, hoping they will turn themselves in. Two bail bondsmen challenged a new Texas statute that restricted bondsmen from sending solicitations to potential customers. They alleged that the statute’s prohibition of any solicitation regarding an outstanding warrant was a denial of their First Amendment rights. The district court granted the bondsmen’s motion for summary judgment, holding the statute unconstitutional, and the County appealed. The government may ban commercial speech related to illegal activity. The court considered the County’s asserted substantial interests, which included the diminishment of flight risk, harm to potential arresting officers, harm to bystanders of a potential arrest, and the potential for destruction of evidence. Though the statute advanced the state’s substantial interests, other, less-restrictive and more-tailored means existed. Furthermore, the County cannot give such notice itself and then claim that restricting notice by others is necessary to advance the stated interests. Thus, the statute was not narrowly tailored to comply with the First Amendment, and was declared unconstitutional. * Baranowski v. Hart, 486 F.3d 112 (5th Cir. May 4, 2007), cert. denied, __ U.S. __, 128 S. Ct. 707, 169 L. Ed. 2d 553 (2007) A Texas prisoner was not denied free exercise rights under the First Amendment and the Religious Land Use and Institutionalized Persons Act (RLUIPA) when the prisoner retained the ability to participate in alternative means of exercising his religious beliefs, even though the prison failed to provide weekly Sabbath and other holy day services, failed to allow Jewish prisoners to use the chapel for their religious services, and failed to provide him with a kosher diet. Baranowski, a Jewish inmate in a Texas state penitentiary, filed a civil rights complaint against prison officials, alleging that they denied Jewish prisoners, among other things, access to holy day services and kosher meals, and that they discriminated against them by favoring other faiths for chapel services, worship, and rehabilitation. The defendants moved for summary judgment, noting that offenders are allowed to worship in their cells and use devotional items and texts, that of the 145,000 offenders in TDCJ, only 70 to 75 actually practice the Jewish faith, and that there is a geographical restraint on the availability of rabbis. Further, the prison recognizes 21 Jewish holy days, compared with two for Christians. Providing kosher meals would put a strain on an already strained food services system. Also, religious freedom and opportunity is allowed as much as possible consistent with security, safety, order, and rehabilitation concerns. A prison regulation that impinges on an inmate’s free exercise of religion is valid if it is reasonably related to legitimate penological interests. The Court found that the prison official’s actions were logically connected to legitimate penological concerns of security, staff and space limitations. It also found that there were no easy alternatives. Further, prisoners may practice their faith in alternative ways. Considering the threshold inquiry under RLUIPA, the Court found that the acts of the defendants regarding religious services had not placed a substantial burden on the prisoner’s free exercise of his Jewish faith. Though the unavailability of kosher meals might be a substantial burden, the prison’s actions, directed at maintaining good order and controlling costs, involve compelling governmental interests.

TEXAS SUPREME COURT

* HEB Ministries, Inc. v. Texas Higher Educ. Coordinating Board, 235 S.W.3d 627 (Tex. August 31, 2007) The State of Texas impermissibly intruded upon religious freedom rights protected by the United States and Texas Constitutions when it required private, religious post-secondary schools to meet prescribed standards before using the term “seminary” to describe itself or using terms such as “degree,” “associate,” “bachelor,” “master,” “doctor” or their equivalents to recognize attainment in religious education training. Texas law restricts the use of academic terminology to prevent deception and fraud resulting in substandard degrees. For instance, Texas law restricts the use of the title “seminary,” as well as the various types of terms of academic achievement – “diploma,” “degree,” etc. Academic institutions must be accredited before using these terms. HEB Ministries, a church in Fort Worth, operates a school, Tyndale Theological Seminary and Bible Institute, founded to offer a biblical education in preparation for ministry in churches and missions. It was not accredited. HEB Ministries was notified that it was in violation of Texas law and it brought suit under the United States and Texas Constitutions. The Texas Supreme Court held that the Act violated the Establishment Clause and the Texas Constitution as applied to a religious institution’s programs of religious instruction. The State’s restrictions imposed on religious training constituted an active involvement in religious activity. The Court also concluded that the restriction on the use of the name “seminary” by schools offering only religious programs of study, and the restriction on the words that such institutions may use to refer to completion of religious programs violate the Free Exercise guarantees of the First Amendment and the Texas Constitution.

SPRING 2008 NEWSLETTER - SCHOOL LAW UPDATE

admin — Tue, 01 Apr 2008 12:01:45 +0000

by Joshua Skinner and John Husted

UNITED STATES SUPREME COURT

Parents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1, __ U.S. __, 127 S. Ct. 2738, 168 L. Ed. 2d 508 (June 28, 2007) Students were denied equal protection under the U.S. Constitution, since school districts, which did not operate legally segregated schools, improperly classified students by race and relied upon the classification in making school assignments in a non-individualized, mechanical way as a decisive factor. The school districts in these cases voluntarily adopted student assignment plans that rely upon race to determine which public schools certain children may attend. The school districts classify children as white or nonwhite, black or “other,” and use this classification when assigning and transferring students so that the racial balance at the school falls within a predetermined range. Incoming ninth graders could choose among the district’s high schools. If too many students list the same schools, the district employs tie-breakers: first, if the student already has siblings there, the second depends on the racial composition, and the third is geographical proximity. Parents of students denied assignment to particular schools under these plans because of race contended that allocating children to different public schools based on race violated the Fourteenth Amendment guarantee of equal protection. The courts of appeals upheld the plans, and the Supreme Court reversed. After determining that the parents’ group had standing, the Supreme Court reviewed the action under strict scrutiny, and found the action was not narrowly tailored to achieve a compelling government interest. Defendants’ plans merely sought racial balance, an illegitimate objective. The facts in this case were distinguished from Grutter v. Bollinger, 539 U.S. 306 (2003), where race was only part of a highly individualized, holistic review of general diversity for law school admissions. Morse v. Frederick, __ U.S. __, 127 S. Ct. 2618, 168 L. Ed. 2d 290 (June 25, 2007) School officials did not violate the First Amendment by suspending a student who refused to take down a pro-drug banner at a school-sponsored event. School officials were entitled to take steps to safeguard those entrusted to their care from speech that could reasonably be regarded as encouraging illegal drug use. At a school-sanctioned and school-supervised event, a high school principal saw some of her students unfurl a banner bearing the phrase “BONG HiTS 4 JESUS”. The principal directed the students to take down the banner. This was consistent with school policy. One student, Frederick, refused. The principal confiscated the banner and suspended Frederick for 10 days. The Ninth Circuit held that the principal’s actions violated the First Amendment, finding that the school did not demonstrate that Frederick’s speech gave rise to a risk of substantial disruption. Though students do not shed their constitutional rights at the schoolhouse gate, constitutional rights of students in public school are not automatically coextensive with the rights of adults in other settings. Furthermore, deterring drug use by schoolchildren is an important, perhaps compelling interest, and Frederick’s speech was reasonably viewed as promoting illegal drug use. The Supreme Court reversed the decision of the Ninth Circuit and held that schools may take steps to safeguard those entrusted to their care from speech that encourages illegal drug use. Tenn. Secondary Sch. Ath. Ass’n v. Brentwood Acad., __ U.S. __, 127 S. Ct. 2489, 168 L. Ed. 2d 166 (June 21, 2007) Enforcing a rule prohibiting high school coaches from recruiting middle school athletes does not violate the First Amendment. The Tennessee Secondary School Athletic Association (TSSAA) regulates interscholastic sports among its member public and private schools, which includes the private school, Brentwood Academy. The TSSAA prohibits schools from using undue influence to recruit students for their athletic programs. Brentwood’s football coach violated the recruiting regulations. TSSAA accordingly sanctioned Brentwood. Though the First Amendment protects the right to publish truthful information about the school and its athletics, and though it protects the school’s right to persuade prospective students to enroll, Brentwood’s speech rights are not absolute. It chose to join the TSSAA, a state actor with interests in the well-being of student athletes and fair competition. The First Amendment does not excuse a school from abiding by the same anti-recruiting rule that governed the conduct of its sister schools as the athletic association’s rule discouraged the sort of conduct that might lead to a variety of harms, any one of which would detract from a high school sports league’s ability to operate efficiently and effectively. Winkelman v. Parma City Sch. Dist., __ U.S. __, 127 S. Ct. 1994, 167 L. Ed. 2d 904 (May 21, 2007) Parents enjoy rights under the Individuals with Disabilities Education Act (“IDEA”), and, as a result, they can prosecute IDEA claims on their own behalf without the assistance of counsel. The parents of Jacob Winkelman, an autistic student, challenged the school district’s proposed Independent Education Plan (IEP) for Jacob that would have put him in the public elementary school. They availed themselves of the administrative review provided by the IDEA. They filed a complaint without an attorney alleging, among other things, that the school district failed to provide Jacob with a free appropriate public education. The court of appeals dismissed their claim stating that, under the IDEA, they needed to obtain counsel for their son. The Winkelman’s appealed. The Supreme Court held that the IDEA gives parents an individual right to administrative action. Since the parents bring the claim in their own right, they are permitted to act without counsel and dismissal was improper.

FIFTH CIRCUIT

Ponce v. Socorro Indep. Sch. Dist., 508 F.3d 765 (5th Cir. November 20, 2007 Student speech that threatens a Columbine-style attack on a school is not protected by the First Amendment because such speech poses a direct threat to the physical safety of the school population. The administrators at a public school learned that one of their students was keeping a journal in which he recounted engaging in a wide variety of violent neo-Nazi activities against other individuals and in which he indicated that he would commit a Columbine-style attack on the school, probably at graduation. The student was suspended and the administrators recommending placing him in alternative education. The student’s parents transferred him to a private school and brought suit on his behalf alleging a violation of his rights under the First Amendment. The district court held that the school district’s conduct violated the student’s First Amendment rights under the standard enunciated in Tinker v. Des Moines Indep. Sch. Dist., 393 U.S. 503 (1969). The Fifth Circuit reversed the decision of the district court and held that the appropriate standard in this case was enunciated by the Supreme Court in Morse v. Frederick, 127 S. Ct. 2618 (2007), not Tinker. Whereas the Tinker requirement that the district prove a material and substantial disruption in order to regulate protected speech remains the norm, speech advocating a harm that is demonstrably grave and that derives that gravity from the “special danger” to the physical safety of students arising from the school environment is unprotected by the First Amendment. Alvin Indep. Sch. Dist. v. A.D., 503 F.3d 378 (5th Cir. October 4, 2007) To qualify for special education services under the Individuals with Disabilities Education Act (IDEA), a student must both (1) have a qualifying disability and (2) “by reason thereof, need special education and related services.” In evaluating whether a student meets the second requirement, the school district does not look to whether the student’s qualifying disability affects his educational performance, but whether, under the unique facts and circumstances of the case, the student needs special education services by reason of the qualifying disability. A.D., a student in Alvin ISD, suffered from Attention Deficit Hyperactivity Disorder (ADHD) and began having behavioral problems in seventh and eighth grade. During that time, A.D. was experiencing various familial circumstances of a stressful nature and began to abuse alcohol. A.D.’s mother requested that Alvin ISD provide A.D. with special education services. Throughout this time period, A.D.’s academic performance was average or above average. Alvin ISD denied the request for special education services. The district court granted Alvin ISD’s motion for summary judgment, holding that A.D. did not qualify for special education services because it was not by reason of his ADHD that he needed special education and related services. On appeal, A.D. contended that the district court erred and should have looked to whether or not his ADHD adversely affected his educational performance. The Fifth Circuit rejected A.D.’s argument, noting that the IDEA provides a “basic floor” of educational opportunities to disabled children and does not require school districts to “maximize the potential of each handicapped child.” Instead, the district court properly considered the unique facts and circumstances of the case in finding that A.D. was not entitled to special education services under the IDEA.

SPRING 2008 NEWSLETTER MUNICIPAL LAW UPDATE

admin — Tue, 01 Apr 2008 12:02:45 +0000

by Joshua Skinner and John Husted

UNITED STATES SUPREME COURT

Brendlin v. California, __ U.S. __, 127 S. Ct. 2400, 168 L. Ed. 2d 132 (June 18, 2007) A passenger in a car stopped by police without adequate justification has standing to challenge the constitutionality of the stop. Without any legitimate basis for his actions, a sheriff pulled over a car in which Brendlin was a passenger. The sheriff recognized Brendlin as a parole violator with an outstanding warrant for his arrest. The sheriff arrested Brendlin, and found drug paraphernalia. Brendlin was charged with possession and manufacture of methamphetamine, and he moved to suppress the evidence obtained in the search as fruit of an unconstitutional seizure, arguing that the sheriff lacked probable cause or reasonable suspicion to stop the car. The trial court denied the suppression motion, finding that Brendlin was not seized until he was ordered out of the car and arrested. He pled guilty, subject to appeal of the suppression issue, and was sentenced to four years in prison. For Fourth Amendment purposes, a seizure occurs, in view of all the circumstances, when a reasonable person would have believed he was not free to leave. The Court held that when a police officer makes a traffic stop, a passenger, as well as the driver, is seized and may challenge the constitutionality of the stop. The Supreme Court held that the evidence should have been suppressed. Sole v. Wyner, __ U.S. __, 127 S. Ct. 2188, 167 L. Ed. 2d 1069 (June 4, 2007) A plaintiff is not entitled to an award of attorneys fees in a civil rights claim for obtaining a preliminary injunction where the plaintiff was ultimately unsuccessful on the merits of the claim and a permanent injunction was denied. For §1983 private actions, Congress has established an exception to the general rule that prevailing parties ordinarily are not entitled to collect attorneys fees from the loser. Federal courts are authorized, in their discretion, to allow the prevailing party a reasonable attorneys fee as part of the costs. But a plaintiff who gains a preliminary injunction after an abbreviated hearing, but is denied a permanent injunction after a dispositive adjudication on the merits, does not qualify as a prevailing party. Even when there is a preliminary injunction, the case is regarded as a unit, not two stages of litigation. Los Angeles County v. Rettele, __ U.S. __, 127 S. Ct. 1989, 167 L. Ed. 2d 974 (May 21, 2007) Police officers did not violate the Fourth Amendment prohibition on unreasonable searches and seizures when they, pursuant to a valid search warrant for the house formerly occupied by the suspects, ordered the current residents from their bed and required them to remain standing unclothed for a brief period, even though the current residents were of a different race. After obtaining a valid search warrant for two houses where he believed four African-American suspects of a fraud and identity-theft crime ring could be found, Deputy Dennis Watters and six other deputies went to the house at 7 a.m. They knew one of the suspects owned a handgun. The deputies knocked and announced, were let in by minor Chase Hall, entered the bedroom of Rettele and Sadler, and ordered them to get out of their bed and to show their hands. They were undressed. The deputies did not allow them to cover themselves, and held Rettele and Sadler at gunpoint for one to two minutes before permitting them to dress. The deputies realized their mistake, apologized, thanked Rettele and Sadler and left within five minutes. They proceeded to the other house and found the suspects who were arrested and convicted. Rettele and Sadlery alleged that the deputies violated their Fourth Amendment rights by obtaining a warrant in a reckless fashion and conducting an unreasonable search and detention. The district court concluded that the deputies were entitled to qualified immunity and the Ninth Circuit reversed. Recognizing that the warrant was valid, that people of different race live together and might engage in joint criminal activity, and that Rettele and Sadler were not forced to stand for any longer than was necessary, the Supreme Court determined that the search was objectively reasonable. The Court acknowledged respondents’ frustration, embarrassment, and humiliation, but when officers execute a valid warrant in a reasonable manner in order to protect themselves from harm, the Fourth Amendment is not violated. Therefore, the Supreme Court reversed and remanded. United Haulers Ass’n., Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., __ U.S. __, 127 S. Ct. 1786, 167 L. Ed. 2d 655 (April 30, 2007) Flow control ordinances that required delivery of all solid waste to facilities operated by a public entity, and that imposed certain fees in excess of what would be charged in the open market, did not violate the Commerce Clause. Generally, a “flow control” ordinance requires trash haulers to deliver solid waste to a particular waste processing facility. The counties of Oneida and Herkimer in New York, which suffered from excess waste and corrupt business practices, created a Solid Waste Management Authority (Authority) to effectively combat the counties’ waste disposal crisis. The counties enacted ordinances that required haulers to deliver waste to particular Authority-managed facilities. The facilities collected “tipping fees” to cover costs. The tipping fees exceeded those charged in the open market. The plaintiff, a trade association made up of solid waste management companies and six haulers that operated in the counties of Oneida and Herkimer when the counties passed flow control laws, alleged that the laws discriminated against interstate commerce, violating the Commerce Clause. The Supreme Court affirmed the Second Circuit’s decision that the ordinances are constitutional. Though the Court had previously struck down a very similar flow control ordinance, it distinguished the ordinances here, since they required haulers to bring waste to facilities owned and operated by a state-created public benefit corporation instead of a private processing facility. Applying the test for facially nondiscriminatory statutes, the Court weighed the burdens imposed on interstate commerce against the benefits, and found that the burden imposed was not clearly excessive. Noting that waste disposal has been a traditional government activity, the Court held that laws that favor the government in such areas, but treat every private business, whether in-state or out-of-state, exactly the same, do not discriminate against interstate commerce. Any incidental burden imposed on interstate commerce here did not outweigh the benefits. Scott v. Harris, __ U.S. __, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (April 30, 2007) A police video recording of a highway chase can be dispositive of any material issues of fact as to the reasonableness of the police officers’ conduct, despite contradictory evidence submitted by the plaintiff. When a Georgia deputy indicated that plaintiff should pull over because he was speeding, the plaintiff sped away and a chase ensued. After the chase had continued for at least ten miles, one of the officers applied his bumper to the rear of the plaintiff’s vehicle, causing the plaintiff to lose control and crash. The plaintiff brought suit alleging that his Fourth Amendment rights were violated by an alleged use of excessive force. The officer filed for summary judgment based on the police videotape of the incident. The district court and Eleventh Circuit denied his motion. The Supreme Court reversed the lower courts, holding that the videotape is dispositive of the question regarding the degree to which the chase was a dangerous situation. The Supreme Court concluded that a court should not adopt a version of the facts that is blatantly contradicted by the record. Based on the videotape, the high likelihood of serious injury or death to the plaintiff was outweighed by the prevention of the actual and imminent threat to the lives of pedestrians, motorists, and police officers. The Court held that when considering the certainty of harm the officer’s action might inflict, it is appropriate to consider the number of lives at risk and the culpability of those involved.

FIFTH CIRCUIT

Brown v. Miller, __ F.3d __, 2008 U.S. App. Lexis 4169 (5th Cir. February 27, 2008) Suppression of exculpatory evidence, either by providing a misleading laboratory report or by suppressing exculpatory test results, by a state medical expert in a criminal prosecution is a clearly established violation of the criminal defendant’s rights to due process of law and a fair trial. Brown was convicted of rape and sentenced to life in prison. Twenty years later, DNA testing proved him innocent, and he was released. He sued the city of Covington, Louisiana, and several of its officers (including Miller) for their alleged misconduct in the investigation and prosecution of his case. Brown alleged that Miller, who conducted comparison tests on Brown’s blood and samples from the crime, either failed to conduct tests necessary to a conclusive result and that would have proven Brown’s innocence or suppressed the exculpatory evidence of those tests. Brown alleged, pursuant to 42 U.S.C. § 1983, that Miller violated his rights to due process of law and a fair trial. Miller filed a motion to dismiss, arguing that he was entitled to qualified immunity from Brown’s federal causes of action and official immunity from the state causes of action. The district court denied Miller’s motion. The Fifth Circuit held that it was clearly established in 1984 that a reasonable laboratory technician would have understood that the deliberate or knowing creation of a misleading and scientifically inaccurate serology report amounts to a violation of a criminal defendant’s due process rights. In addition, a reasonable technician would also have understood that the suppression of exculpatory blood tests would violate a criminal defendant’s right to a fair trial. The Fifth Circuit affirmed the district court’s denial of Miller’s motion to dismiss based on qualified immunity. Hutchins v. McDaniels, 512 F.3d 193 (5th Cir. December 21, 2007) The Prison Litigation Reform Act (PLRA) requires prisoners bringing any federal civil action to have suffered physical injury. The physical injury requirement does not apply, however, to a prisoner’s ability to pursue nominal and punitive damages based on alleged civil rights violations. Hutchins, a Texas prisoner, alleged that McDaniels, a prison officer, violated his Fourth Amendment rights when he conducted a strip and cavity search of Hutchins. The district court dismissed Hutchins’ claim as frivolous and for failure to state a claim under the PLRA and for not meeting the physical injury requirement under the PLRA (42 U.S.C. § 1997e(e)). On appeal, Hutchins argued that (1) the district court erred in dismissing his Fourth Amendment claim, (2) the physical injury requirement of Section 1997e(e) does not apply to Fourth Amendment claims and (3) even if Section 1997e(e) does apply, it does not limit a prisoner’s ability to pursue nominal and punitive damages based on violations of the Fourth Amendment. The Fifth Circuit reversed the district court’s dismissal. The Fifth Circuit explained that the district court erroneously considered Hutchins’ illegal search claim under the Eighth Amendment (cruel and unusual punishment) rather than the Fourth Amendment. The Fifth Circuit previously held in Moore v. Carwell, 168 F.3d 234 (5th Cir. 1999), that the strip and cavity search of a prisoner can rise to the level of a Fourth Amendment violation. While the Fifth Circuit rejected Hutchins’ claim that Section 1997e(e) does not apply to Fourth Amendment claims, the Fifth Circuit held that Section 1997e(e)’s requirement of physical injury does not limit a prisoner’s ability to pursue nominal and punitive damages based civil rights violations. Hathaway v. Bazany, 507 F.3d 312 (5th Cir. November 1, 2007) A police officer was entitled to qualified immunity from a Fourth Amendment excessive force claim because his actions were objectively reasonable when he shot at and killed a teenage driver who he had ordered to stop just as or while the officer was being struck by the vehicle that the teenager was driving. The plaintiffs had the burden of disproving entitlement to qualified immunity. Officer Bazany ordered Hathaway to stop the vehicle he was driving because it was acting erratically and was suspected of involvement in a gang-related altercation. Hathaway sped up, heading straight for Bazany. The vehicle struck Bazany. Either just before, during, or just after the vehicle struck Bazany, Bazany shot at Hathaway and killed him. The autopsy report could not establish whether Bazany shot before, during, or after being struck by the vehicle and the only admissible testimony was Bazany’s – who stated that he shot before or while being struck by the vehicle. The district court granted summary judgment to Bazany and the Hathaways, on behalf of their deceased son, appealed. The Fifth Circuit affirmed the decision of the district court, explaining that the burden of disproving Bazany’s entitlement to qualified immunity was on the Hathaways. Alice L. v. Dusek, 492 F.3d 563 (5th Cir. July 12, 2007) A motion to stay discovery proceedings pending an interlocutory appeal of a denial of qualified immunity was denied when the appellant was subject to discovery requests on claims not protected by qualified immunity. Jennifer Dusek sought to stay all district court proceedings pending her interlocutory appeal of the district court’s denial of qualified immunity. The district court denied her request to stay Title IX discovery proceedings against Dusek’s co-defendant, Eanes ISD, and ordered her to comply with certain interrogatories and requests for production in the Title IX matter. A notice of appeal from an interlocutory order does not produce a complete divestiture of the district court’s jurisdiction over the case, but only over those aspects of the case on appeal. Where an appeal is allowed from an interlocutory order, the district court may proceed with matters not involved in the appeal. Though qualified immunity is an entitlement to be free from the burdens of time-consuming pre-trial matters and the trial itself, it is a right to immunity from certain claims, not from litigation in general. Even though the factual basis of the Title IX claims and the §1983 claim overlap, such discovery requests do not implicate her right to qualified immunity since Dusek cannot assert qualified immunity from the Title IX claim. The district court may compel discovery related to those claims, because they do not interfere with any aspect of her appeal. Disraeli v. Rotunda, 489 F.3d 628 (5th Cir. June 13, 2007) Three employees of a state securities board who helped execute an emergency cease and desist order against an unlicensed investment adviser who was advertising unregistered securities enjoyed absolute immunity from civil liability, because their actions were quasi-judicial or prosecutorial in nature. Rotunda, an enforcement attorney noticed an advertisement placed by Disraeli that indicated possible violations of Texas’s securities laws. She then investigated Disraeli, and found several violations and misrepresentations. Rotunda brought her findings to the other two employees, and they drafted and executed an Emergency Cease and Desist Order ordering Disraeli to stop offering the securities until the securities could be registered, using misleading offers, and rendering services as an investment advisor without a license. Disraeli filed suit alleging that the three officials violated his right to due process by issuing the emergency order, and the defendants asserted absolute immunity. Judges and prosecutors are generally entitled to absolute immunity. Absolute immunity is also available to certain quasi-judicial or prosecutorial officers and agencies. The Fifth Circuit applied a non-exhaustive list of factors to determine whether an administrative employee is entitled to absolute immunity, which includes: the need to assure that one can perform his duty without harassment, the presence of safeguards that reduce the need for private damages to enforce the constitution, insulation from political influence, the importance of precedent, the adversary nature of the process, and the correctability of error on appeal. In light of these, the court held that the officials were entitled to absolute immunity. DeLeon v. City of Corpus Christi, 488 F.3d 649 (5th Cir. May 31, 2007 A plaintiff is barred from bringing a civil action against his arresting officers if the plaintiff has been convicted or sentence. Under Texas law, a deferred adjudication qualifies as a conviction and thus bars a plaintiff from bringing suit. Christopher DeLeon’s brought suit against the City of Corpus Christi and a police officer for false arrest, false imprisonment, malicious prosecution, illegal search and seizure, and use of excessive force. The district court dismissed his complaint as barred under Heck v. Humphrey, 512 U.S. 477 (1994), because he pleaded guilty and received deferred adjudication in his charge of aggravated assault of a police officer. Pursuant to Heck, a civil action is inappropriate to challenge the validity of outstanding criminal judgments. If a judgment in favor of a plaintiff against his arresting officers would imply the invalidity of his conviction or sentence, the claim is barred unless the conviction has been reversed, expunged, declared invalid, or called into question by issuance of a writ of habeas corpus. Under Texas law, DeLeon’s deferred adjudication was a “conviction” for purposes of Heck. DeLeon’s claims are dismissed with prejudice to their being asserted again until the Heck conditions are met. Houston Chronicle Publ. Co. v. City of League City, 488 F.3d 613 (5th Cir. May 30, 2007) A city’s repeal of an unconstitutional ordinance does not moot a plaintiff’s claim as a “prevailing party” for attorneys fees after the district court has entered judgment and an injunction against the city. The City enacted an ordinance regulating solicitation on its streets. Citations were issued to The Houston Chronicle’s vendors. The Chronicle and Daily News filed actions against the City claiming that the ordinance governing street vendors violated the First and Fourteenth Amendments by enforcing content-based discrimination. The district court found for the newspapers and issued an injunction against the City from enforcing the ordinance. The City legislature subsequently repealed the unconstitutional parts of the Ordinance, though the injunction remained. It then challenged the injunction. The Fifth Circuit concluded that the amended ordinance was constitutional. Regardless, the Fifth Circuit declined to vacate the injunction because it was entered after final judgment. Moreover, the newspapers were entitled to attorney’s fees as “prevailing parties.” Breen v. Texas A&M Univ., 485 F.3d 325 (5th Cir. April 24, 2007), modified, 494 F.3d 516 (5th Cir. July 26, 2007), cert. denied, __ U.S. __, 128 S. Ct. 377, 169 L. Ed. 2d 260 (2007) It remains uncertain whether the Fifth Circuit has or will recognize a substantive due process claim under the state-created danger theory, i.e., that the state created a dangerous environment and was deliberately indifferent to the safety of known persons. If there is a state-created danger theory of liability in the Fifth Circuit, a plaintiff must show that the state actors increased the danger to him from a third-party and that the state actors acted with deliberate indifference. This is the second appeal from the Texas A&M bonfire disaster. In the earlier decision, Scanlan v. Tex. A&M Univ., 343 F.3d 533 (5th Cir. 2003), the Fifth Circuit reversed dismissal of state-created danger claim against Texas A&M University, holding that the facts as alleged by the plaintiffs “stated a section 1983 claim under the state-created danger theory.” Prior to Scanlan, the Fifth Circuit had not recognized the state-created danger theory. Subsequent to Scanlan, however, various Fifth Circuit panels held that Scanlan did not recognize the state-created danger theory. In this appeal, the Fifth Circuit held on April 24, 2007, that Scanlan did recognize the state-created danger theory because it was a necessary component of its holding. Nevertheless, the panel granted qualified immunity because the state-created danger theory was not clearly established. On July 26, 2007, the panel in Breen revised its opinion sua sponte and, without explanation or comment, withdrew those parts of its April 24th opinion that stated Scanlan recognized the state-created danger theory. Meadours v. Ermel, 483 F.3d 417 (5th Cir. April 2, 2007) The reasonableness of police officers’ conduct in an excessive force claim should be considered individually, even if they acted in unison. The Defendants, four City of La Porte police officers shot and killed mentally ill Bob Meadours with a bean bag gun and eventually, their service weapons, when he “flipped out” with a threatening screw driver. His parents brought a claim for use of excessive force. Though the Fifth Circuit Court ultimately denied summary judgment, it stated that district court was imprudent in fashioning a rule that if the defendants act in unison, their conduct should be considered collectively. The court held that the district court erred in considering the officers’ actions collectively. The Court stated that the actions of officers should be considered separately, and instructed the district court to do so on remand. Teague v. Quarterman, 482 F.3d 769 (5th Cir. March 21, 2007) An inmate’s 30-day loss of previously earned good-time credit was not de minimis, so as to forgo procedural due process, and habeas relief was ordered when no evidence supported the disciplinary action. A prison must accord an inmate due process before depriving him of any previously earned good-time credits, however slight. Teague, an inmate in the Texas Department of Criminal Justice, Correctional Institutions Division (TDCJ-CID) was found guilty of having violated an anti-trafficking and trading provision of the rules of prisoner conduct. No evidence regarding Teague’s knowledge was presented. Part of his punishment included forfeiting thirty days of his earned good-time credit. Teague exhausted the internal grievance procedures, and then filed a petition in the district court seeking a writ of habeas corpus. When due process is required, the standard in prison disciplinary hearings requires that there be “some evidence” to support the disciplinary decision. The court noted that a prisoner has a liberty interest in a constitutionally established expectancy to an early release based on earned credits, so he is entitled to due process in an action to deprive him of such credits. There is no de minimis exception to a prisoner’s entitlement to minimum procedures of due process.

TEXAS SUPREME COURT

Nueces County v. San Patricio County, __ S.W.3d __, 51 Tex. Sup. J. 378 (Tex. January 25, 2008) (per curiam) (publication status pending) Counties are entitled to governmental immunity (including in suits by another county) unless there has been a specific waiver of immunity by the legislature. Counties, unlike municipalities, have no proprietary functions. All of their functions are governmental in nature and therefore entitled to immunity, even if the action goes beyond the limits of the authority given to the county. San Patricio County sued Nueces County to establish their common boundary line and to recover taxes on the disputed land. The trial court ruled in favor of San Patricio County on the boundary dispute, but held that Nueces County was entitled to governmental immunity from the claim for past taxes. The court of appeals affirmed on the boundary dispute, but reversed on the question of governmental immunity. The court of appeals reasoned that a county is only authorized to collect taxes on the land within its boundaries. As a result, Nueces County’s actions were not governmental in nature, but proprietary and therefore not entitled to governmental immunity. The Supreme Court held that Nueces County was entitled to governmental immunity because counties only perform governmental functions, not proprietary functions. That a county is going beyond its authority does not change the fact that it is engaging in a governmental function. City of Rockwall v. Hughes, __ S.W.3d __, 51 Tex. Sup. J. 349 (Tex. January 25, 2008) (publication status pending) A municipality generally must annex land pursuant to a plan giving three years’ notice of its intent to annex. If an area is exempt from the three-year notice requirement, then annexation can take place by use of abbreviated procedures with less notice of a city’s intent to annex. If a landowner believes his property should be part of the three-year annexation plan, the landowner may request inclusion and, if the municipality fails to take action, the landowner may request arbitration. If the City denies that request, however, the landowner is not entitled to arbitration. The City of Rockwall gave notice to a landowner that it intended to annex the landowner’s property in accordance with the abbreviated annexation procedures. The landowner sought inclusion in the City’s three-year annexation plan, but the City denied the request, claiming that the proposed annexation was statutorily exempt from the three-year requirement. The landowner requested arbitration pursuant to Texas Local Government Code § 43.052(i) and the City refused. The landowner sough a court order compelling arbitration. The trial court refused to compel arbitration and dismissed the case for lack of jurisdiction. The court of appeals reversed and held that the City must arbitrate. The Texas Supreme Court reversed the decision of the court of appeals and affirmed the decision of the trial court dismissing the suit. Stephen F. Austin State Univ. v. Flynn, 228 S.W.3d 653 (Tex. June 29, 2007) A landowner who dedicates a public easement for recreational purposes is entitled to the protection of the recreational use statute. The court of appeals erred in rejecting SFA’s plea under the recreational use statute because no material factual dispute exists regarding its application in this case. The Lanana Creek Trail is a community trail open to the public. Part of the trail crosses SFA’s campus. SFA granted an easement to the City of Nacogdoches for it. Diane Flynn was crossing the SFA portion on her bike when a stream of water from a sprinkler forced her offer her bike, causing her injury. Flynn sued SFA for damages under the Tort Claims Act, alleging that her injuries were proximately cause by its negligence. SFA filed a plea to the jurisdiction and motion to dismiss arguing that sovereign immunity had not been waived under the Tort Claims Act and that it was entitled to protection under the recreational use statute, because the public had permission to use the property for recreational purposes. Though SFA’s acts fell within the Tort Claims Act waiver of immunity for claims involving the use of property, its actions were protected by the recreational use statute. Even though SFA dedicated a public easement over the campus for use as a recreational trail, it retained ownership, and as the owner, SFA retained its status as a member of the class protected by the recreational use statute. The statute protects the landowner who permits use of its land by the public for recreational purposes. Under the statute, one does not assume responsibility for the actions of those admitted to the property. For this reason, the court dismissed the case. City of San Antonio v. Ytuarte, 229 S.W.3d 318 (Tex. May 4, 2007) Police officers act in good faith in police pursuit cases, and are thus entitled to official immunity, if a reasonably prudent officer under similar circumstances could have believed that the need to immediately apprehend the suspect outweighed a clear risk of harm to the public in continuing (rather than terminating) the pursuit. The police began pursuing a suspect in a stolen Suburban shortly after an aggravated robbery and car jacking were reported. The police pursuit included five police cars and a helicopter. The officers were directed to back off to make the suspect believe he had evaded the officers. Shortly thereafter, the suspect lost control of the Suburban and crashed, injuring a bystander, Dolores Ytuarte. Ytuarte filed suit and the defendant responded by asserting immunity and moving for summary judgment. The court determined that the relevant test is whether no reasonably prudent officer could have assessed the need and risks as the police officers did in this case. The test is one of objective legal reasonableness where immunity protects all but the plainly incompetent or those who knowingly violate the law. The court found that there was good faith in the officers’ beliefs under the circumstances, and a good faith weighing of the need to apprehend and the risk factors; thus, the court reversed the court of appeals judgment and rendered judgment dismissing the case.

SPRING 2008 NEWSLETTER EMPLOYMENT LAW UPDATE

admin — Tue, 01 Apr 2008 12:03:22 +0000

by Joshua Skinner and John Husted

UNITED STATES SUPREME COURT

Federal Express Corp. v. Holowecki, __ U.S. __, 128 S. Ct. 1147, 170 L. Ed. 2d 10 (February 27, 2008) The proper test for determining whether a filing with the Equal Employment Opportunity Commission (EEOC) is a charge of discrimination under the Age Discrimination in Employment Act of 1967 (ADEA) is whether the filing, taken as a whole, should be construed as a request by the employee for the agency to take whatever action is necessary to vindicate his or her rights. This is referred to as the “request-to-act requirement.” The plaintiff filled out an intake questionnaire with the EEOC, but the EEOC did not interpret the questionnaire as a charge under the ADEA. The defendant moved for dismissal of the case arguing that the intake questionnaire was not a charge under the ADEA because the EEOC did not treat it as a charge. The plaintiff contended that it was a charge because it listed the name of the employer and generally identified the alleged discrimination. The EEOC contended that the EEOC should have treated the intake questionnaire in this case as a charge because it contained a “request-to-act” by the plaintiff. Contrary to the plaintiff, however, the EEOC contended that merely listing the name of the employer and generally identifying the alleged discrimination would not be sufficient. The Supreme Court held that an employee must provide more than the minimal information mentioned by the plaintiff, but that the central question was whether the document submitted contained a “request-to-act.” Sprint/United Management Co. v. Mendelsohn, __ U.S. __, 128 S. Ct. 1140, 170 L. Ed. 2d 1 (February 26, 2008) Evidence by nonparties alleging discrimination at the hands of supervisors of the defendant company who played no role in the adverse employment decision challenged by the plaintiff is neither per se admissible nor per se inadmissible. In this age discrimination case, the district court excluded testimony by nonparties alleging discrimination at the hands of supervisors of the defendant company who played no role in the adverse employment decision challenged by the plaintiff. The court of appeals interpreted the district’s decision as a per se exclusion of such evidence. The Supreme Court granted certiorari on the question of whether the Federal Rules of Evidence require admission of the testimony. The Supreme Court held that there is no per se rule of admissibility or inadmissibility and that the appropriate standard is fact-based and depends on many factors, including how closely related the evidence is to the plaintiff’s circumstances and theory of the case. Because it was not entirely clear that the district court applied a per se rule, the Supreme Court remanded the case for further consideration. LaRue v. DeWolff, Boberg & Assoc., Inc., __ U.S. __, 128 S. Ct. 1020, 169 L. Ed. 2d 847 (February 20, 2008) Section 502(a)(2) of the Employee Retirement Income Security Act of 1974 (ERISA) authorizes a participant in a defined contribution pension plan to sue a fiduciary whose alleged misconduct impaired the value of plan assets in the participant’s individual account. The plaintiff alleged that, pursuant to the terms of his ERISA-regulated 401k, he directed the plan administrator to make certain changes to the investments in his individual account, but those changes were not made. The plaintiff alleged that the failure to make those changes lost him approximately $150,000. Section 502(a) identifies six types of civil actions that may be brought by various parties. The one at issue in this case is the second, which authorizes the Secretary of Labor, as well as plan participants, beneficiaries, and fiduciaries, to bring actions on behalf of a plan to recover for violations of the obligations defined by Section 409(a). The principal statutory duties imposed on fiduciaries by Section 409(a) relate to the proper management, administration, and investment of fund assets, with an eye towards ensuring that the benefits authorized by the plan are ultimately paid to participants and beneficiaries. As a result, while Section 502(a)(2) does not provide a remedy for individual injuries distinct from plan injuries (e.g., consequential damages), that provision does authorize recovery for fiduciary breaches that impair the value of plan assets in a participant’s individual account.

FIFTH CIRCUIT

McClain v. Lufkin Indus., Inc., __ F.3d __, 2008 U.S. App. Lexis 4451 (5th Cir. February 29, 2008, as revised March 10, 2008) A Title VII lawsuit may include allegations like or related to allegations contained in the EEOC charge and growing out of such allegations during the pendency of the case before the EEOC. An employee fails to exhaust a disparate-impact claim when the EEOC charge alleges only individual disparate treatment and identifies no neutral employment policy. McClain and Thomas brought suit against their employer Lufkin for race discrimination in employment practices. The district court certified their disparate-impact claims as a class action. The district court declined to certify their disparate-treatment claims as a class action. The case went to trial and the district court awarded $3.4 million to the class, as well as attorney’s fees and an injunction. McClain’s and Thomas’ disparate-impact claims relate to Lufkin’s practice of delegating subjective decision-making authority to its white managers with respect to initial assignments and promotions. McClain’s EEOC charge only alleged individual disparate treatment and did not identify a neutral employment policy. The district court held that the plaintiffs exhausted their disparate-impact claim through a vague letter from McClain to the EEOC and a concurrent investigation by the Office of Federal Contract Compliance Programs (OFCCP). The Fifth Circuit rejected both of the district court’s arguments, but held that the plaintiffs had exhausted their disparate-impact claim through Thomas’ EEOC charge, which states that he was constructively discharged, denied promotional and training opportunities, and overloaded with work because of his race. More specifically, Thomas stated that Lufkin “has similarly discriminated against other black African Americans.” The Fifth Circuit ultimately remanded, however, because the scope of the class certification was overly broad by allowing long-time employees to represent disparate-impact claims of new hires. Davis v. McKinney, __ F.3d __, 2008 U.S. App. Lexis 3705 (5th Cir. February 21, 2008) While speech made by an employee pursuant to the employee’s official duties is not protected by the First Amendment, speech made by an employee that does not relate to the employee’s official duties is entitled to further consideration under the First Amendment – even if it is made in conjunction with speech that is not protected. That the employee’s speech is made to someone outside the employee’s chain of command or to third-parties is evidence that it does not relate to the employee’s official duties. Davis was an internal auditor with the UT System. Her supervisor requested that she conduct an investigation into the possibility that other employees were intentionally accessing pornography on UT computers. Davis’ investigation concluded that other employees were intentionally accessing pornography, some of which was probably child pornography. Davis alleged that as a result of her discoveries, her supervisors and other employees caused her working conditions to deteriorate and she was constructively discharged. Davis alleged that the conditions became markedly worse after she sent a complaint letter to various administrators in the UT System stating that she had filed complaints with the FBI concerning the child pornography evidence and with the EEOC regarding disparate treatment of African-American and female employees. Davis brought suit against two supervisors for allegedly retaliating against her for engaging in protected speech in violation of the First Amendment. The supervisors moved for dismissal of Davis’ claims, alleging that Davis’ alleged speech was made pursuant to her official duties, and therefore not protected by the First Amendment. See Garcetti v. Ceballos, 547 U.S. 410 (2006). The Fifth Circuit held that the inquiry into whether the employee’s speech is constitutionally protected involves three considerations: First it must be determined whether the employee’s speech is pursuant to his or her official duties. If it is, then the speech is not protected by the First Amendment. Second, if the speech is not pursuant to official duties, then it must be determined whether the speech is on a matter of public concern. Third, if the speech is on a matter of public concern, the Pickering test must be applied to balance the employee’s interest in expressing such a concern with the employer’s interest in promoting the efficiency of the public services it performs through its employees. In a case involving a statement that includes speech, some of which is pursuant to official duties and some of which is not, the court must separate out the various aspects of the speech and proceed with the analysis on a section by section basis. In this case, the Fifth Circuit held that portions of Davis’ complaint letter not relating to her official duties, as well as her complaints to the FBI and EEOC are entitled to proceed to the second stage of analysis (viz., whether the speech is on a matter of public concern). McAteer v. Silverleaf Resorts, Inc., 514 F.3d 411 (5th Cir. January 15, 2008) State law negligence claims for failing to maintain a safe workplace are not preempted by ERISA, even if the employee signed a waiver of such claims in order to participate in an ERISA plan. Silverleaf is a non-subscriber to Texas workers’ compensation insurance, choosing instead to provide benefits to its employees through an ERISA-governed plan. The plan gives no-fault benefits to employees in the event of a job-related injury and requires arbitration of any disputes regarding benefits. McAteer enrolled in the plan and signed an agreement that the plan would provide the exclusive avenue of relief for on-the-job injuries. After termination, McAteer filed a claim for a job-related injury. The claim was denied and McAteer brought suit in state court alleging negligence on the part of Silverleaf in connection with McAteer’s alleged injury. Silverleaf removed the case claiming ERISA preemption. The Fifth Circuit’s decision in Hook v. Morrison Milling Co., 38 F.3d 776 (5th Cir. 1994), held that ERISA does not preempt state law negligence claims. Silverleaf contended that Hooks was no longer good law in light of the Supreme Court’s decision in Aetna Health Inc. v. Davila, 542 U.S. 200 (2004). The Fifth Circuit rejected Silverleaf’s argument, noting that Davila related to claims to enforce the terms of an ERISA plan through a state law cause of action, whereas the duty to maintain a safe work environment is independent of Silverleaf’s ERISA plan. Abner v. Kansas City S. Ry. Co., 513 F.3d 154 (5th Cir. January 2, 2008) Punitive damages can be awarded under Title VII absent an award of compensatory or nominal damages. An award of punitive damages under Title VII is not so excessive that it violates the defendant’s due process rights if it is within the statutory caps imposed by Title VII. Eight African American employees of Kansas City Southern Railway Company (KCSR) sued the company in district court for creating an environment hostile to race. A jury found the company liable and awarded no compensatory damages, but awarded each plaintiff $ 125,000 in punitive damages. The district court entered judgment on the verdict, adding $ 1 in nominal damages. KCSR appealed. The Fifth Circuit held that punitive damages may be awarded under Title VII, even if there is no award of compensatory or nominal damages. So long as the punitive damages award does not exceed the damages caps imposed by Title VII, the Court will not hold that it violates the defendant’s due process rights. As the result, the district court’s judgment was affirmed. Lauderdale v. Tex. Dep’t of Crim. Justice, 512 F.3d 157 (5th Cir. December 21, 2007) In establishing a hostile work environment claim against a supervisor, the employee must show that the harassment was sufficiently severe or pervasive to alter the conditions of the victim’s employment. If the harassment in sufficiently pervasive, it need not be as severe. A public official cannot receive qualified immunity on a sexual harassment claim if a constitutional violation has been alleged because sexual harassment is defined as being objectively offensive and therefore cannot be objectively reasonable. Lauderdale alleged she was sexually harassed by her ultimate supervisor, Arthur, over the period of almost four months during which she worked as a correctional officer for the Texas Department of Criminal Justice (TDCJ). Lauderdale made a complaint with her immediate supervisor, but did not pursue any other options for redress under TDCJ policy when her immediate supervisor would not act. Lauderdale sued the TDCJ under Title VII and sued Arthur under 42 U.S.C. § 1983. The district court granted summary judgment for both defendants. The Fifth Circuit affirmed as to the TDCJ and reversed as to Arthur. Where the claim of harassment is against a supervisor, there are four elements of a hostile work environment claim: (1) that the employee belongs to a protected class; (2) that the employee was subject to unwelcome sexual harassment; (3) that the harassment was based on sex; and (4) that the harassment affected a “term, condition, or privilege” of employment. To satisfy the fourth element, the harassment must be sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment. If the harassment is sufficiently pervasive, it does not need to be as severe. If an employee establishes that a supervisor created a hostile work environment, however, the employer is entitled to an affirmative defense if the employee did not take reasonable steps to rectify the problem under the employer’s policies or procedures. When a first complaint is not acted upon, a reasonable employee would file a second complaint if it is permitted by the employer. Finally, if the alleged behavior is sexual harassment, a public official is foreclosed from qualified immunity because the conduct is, by definition, objectively reasonable. Sexual harassment is defined as being objectively offensive. Nixon v. City of Houston, 511 F.3d 494 (5th Cir. December 19, 2007), petition for cert. filed (March 18, 2008) When a police officer speaks to the media about an accident while in uniform, on-duty and working at the scene of an accident, the officer’s speech is not protected by the First Amendment. It is not protected by the First Amendment even if speaking with the press is not part of the regular duties of the officer and if speaking with the press was unauthorized. Statements made subsequently regarding the same event while the officer is off-duty to other media outlets (including talk shows) are also not protected by the First Amendment because they are a continuation of the earlier unprotected speech. Nixon made critical remarks to the media about the police handling of a high-speed chase while he was in uniform, on-duty and working at the scene of the accident that resulted from the chase. Nixon also made subsequent, off-duty statements on radio talk shows about the incident. Nixon was not authorized to make statements to the media. The Fifth Circuit held that Nixon’s speech was not protected by the First Amendment because it was made pursuant to his official duties. In addition, it did not matter whether Nixon was authorized to speak to the media and his subsequent, off-duty statements were merely a continuation of his on-duty statements. Finally, even if the subsequent statements were protected speech, Nixon’s First Amendment rights were not violated because the harm resulting from his statements outweighed his right to make them. Stotter v. Univ. of Texas at San Antonio, 508 F.3d 812 (5th Cir. November 27, 2007) A governmental entity or public official cannot cure a procedural due process deprivation of personal property by a post-deprivation hearing unless the deprivation was unauthorized. Stotter was a tenured professor at the University of Texas at San Antonio (UTSA). He received a series of reprimands regarding the dangerous condition of his laboratory, and, despite repeated promises to rectify the problems, failed to do so. Stotter was sent a letter notifying him that UTSA was going to do the clean-up and that he needed to notify them if there were any personal belongings that he needed to get from the lab. Stotter did not get the notice until two days after UTSA cleaned the lab. Also, during the course of these events, Stotter submitted a grievance that was primarily about personal issues, but also included a minor reference to a matter of public concern. Stotter brough suit alleging, among other things, that his procedural due process rights were violated by the deprivation of his property without a pre-deprivation hearing and that his employment was terminated in retaliation for the exercise of his free speech rights under the First Amendment. The Fifth Circuit held that Stotter had stated a valid procedural due process claim because he was not provided an adequate pre-deprivation hearing. Moreover, the defendants could not cure the lack of a pre-deprivation hearing by providing a post-deprivation hearing because the deprivation of Stotter’s personal property was authorized and UTSA could have permitted an adequate pre-deprivation hearing. The Fifth Circuit also held that Stotter had stated a valid First Amendment claim, even though his grievance contained only a “mere scintilla of speech regarding a matter of public concern.” Berquist v. Washington Mutual Bank, 500 F.3d 344 (5th Cir. August 31, 2007), cert. denied, __ U.S. __, 128 S. Ct. 1124, 169 L. Ed. 2d 950 (2008) For a wrongful termination claim under the ADEA, a plaintiff fails to establish a prima facie case when the proffered evidence that he was “otherwise discharged because of his age” is no more than vague, remote comments, and when he cannot show “nearly identical” situated employees being treated more favorably. Washington Mutual undertook a major reorganization that eliminated Berquist’s position, and Berquist failed to raise a genuine issue of material fact regarding this legitimate, non-discriminatory reason for termination. Berquist appealed the grant of summary judgment in favor of his employer Washington Mutual for his wrongful termination claim under the Age Discrimination in Employment Act (ADEA). Though Berquist, a credit review officer, showed that he was discharged, qualified for the position, and was within the protected class at the time of discharge, he did not show that he was “otherwise discharged because of his age,” and thus failed to establish a prima facie case. His employer’s comments regarding a desire to “attract younger talent,” and referencing other credit review officers as “younger” did not evince unlawful discrimination. The comments were too vague, remote, not directed to any particular employee, and unrelated to any unlawful discriminatory animus. Berquist’s example of other employees being treated more favorably failed because he did not show “nearly identical” circumstances for employees to be considered similarly situated. Also, Berquist admitted that he lacked the skills necessary to perform the work assigned to the younger employees and that he refused to cooperate with his employer in helping him find a position that better suited his skills. Alvarado v. Texas Rangers, 492 F.3d 605 (5th Cir. July 16, 2007) The denial of a transfer may qualify as an adverse employment action under Title VII, even if the new position would not have entailed an increase in pay or other tangible benefits. If the position sought was objectively better, then the failure to award the position may be an adverse employment action. Alvarado, a Sergeant in the Special Crimes Service of the Texas Department of Public Safety (DPS), applied for a position with the Texas Rangers, the most prestigious division within the DPS. She was one of 146 applicants for ten positions. The Court held that the district court erred when it found that Alvarado could not establish a prima facie case of discrimination based on the fact that the move was a lateral move and not a promotion. The court concluded that “the denial of a transfer may be the objective equivalent of the denial of a promotion, and thus qualify as an adverse employment action, even if the new position would not have entailed an increase in pay or other tangible benefits.” The court gave a non-exhaustive list of factors of the job transfer, including greater responsibility, greater opportunities for advancement, greater hiring requirements, a competitive selection process; or otherwise objectively more prestigious, that may be relevant in determining whether the job is objectively better. Considering the Texas Ranger position in light of these factors, the court found that, in this case, there was evidence sufficient to raise a genuine issue of material fact. Therefore, the district court erred in holding that Alvarado failed to show an adverse employment action for purposes of her Title VII gender discrimination claim where she was denied transfer to the Texas Rangers position. Nasti v. CIBA Specialty Chems., 492 F.3d 589 (5th Cir. July 12, 2007) For a Title VII discrimination claim, a plausible argument in the plaintiff’s brief showing pretext is not enough to sustain a denial of the defendant’s motion for summary judgment if the facts in the record do not support the argument in the brief. A plaintiff’s prima facie case, combined with sufficient evidence to find that the employer’s asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated. While the plaintiff’s version of the facts in the briefing reveals a plausible argument, the record must actually reflect this version of the facts to deny summary judgment. Here, the Court found that, in spite of plaintiff’s plausible argument, the record actually demonstrated that the defendant thought the plaintiff turned in a false report and that the defendant terminated the plaintiff for that reason, not for a discriminatory reason. Therefore, the employer was entitled to summary judgment on former employee’s gender discrimination claim under Title VII, because, though she asserted a prima facie case, she failed to raise a genuine issue of material fact as to whether the employer’s explanation for termination due to falsification of reports was merely pretext. Jenkins v. Cleco Power, LLC, 487 F.3d 309 (5th Cir. May 18, 2007) The offer of a desk job to a company lineman who fractured his leg while working was a reasonable accommodation under the Americans with Disabilities Act (ADA), even though the worker was unable to sit for extended periods. Jenkins worked for Cleco, a power company, as a lineman for fourteen years until a pole that he was climbing broke and he fell and broke his leg. This injury limited his physical capacity to perform several job-related tasks, including the ability to sit for extended periods. Jenkins remained employed with Cleco for seven more years, in various office-type positions with periods of disability leave. Jenkins was offered a call center position that required extensive periods of sitting at a desk. Jenkins declined stating that he could not meet the physical job requirements because of the sitting. He was terminated a few months later and the insurance company denied his claim for continuing disability benefits soon thereafter. Jenkins brought suit asserting among other things, a claim under the ADA. Though the Court determined that sitting qualified as a major life activity under the ADA and that Jenkins was substantially limited in this major life activity, the Court found that Cleco did not fail to accommodate Jenkins. First, Cleco engaged in an “interactive process” with Jenkins to find a reasonable accommodation. Second, it had placed him in several different positions in an effort to find an optimal accommodation. Also, though Cleco was aware of Jenkins’ limitation when it offered him the call center position, it was a sufficient accommodation. McCoy v. City of Shreveport, 492 F.3d 551 (5th Cir. May 18, 2007) Placement on paid administrative leave does not necessarily constitute an adverse employment action in a Title VII retaliation claim. In addition, an employee cannot prove that an employer’s stated reason for an adverse employment action is pretext by merely showing that the employer was aware of the employee’s protected activity. McCoy, a black female, was a lieutenant with the City’s police department. She filed a grievance with her employer alleging that a subordinate officer, who is white, harassed her twice. Her employer concluded that the conduct did not constitute harassment, and that the two officers be counseled about workplace “horseplay.” Distressed, McCoy complained and eventually asked to be relieved to see a doctor about emotional distress. Considering her comments and a concern for safety, her employer concluded that her gun should be retrieved before she was placed on administrative leave. Months later, Plaintiff informed her employer that she had decided to retire. The Supreme Court’s standard for Title VII retaliation claims defines an adverse employment action as any action that “might well have dissuaded a reasonable worker from making or supporting a charge of discrimination.” Placing plaintiff on administrative leave might not be an adverse employment action, particularly under the circumstances of this case. Regardless, McCoy could not prove that the City’s proffered legitimate, non-retaliatory reasons for collecting her gun and badge and placing her on administrative leave were pretextual. One cannot prove pretext simply by showing that the defendant knew of the plaintiff’s complaints and that it took adverse employment action shortly thereafter. Strong v. Univ. Health Care Sys., L.L.C., 482 F.3d 802 (5th Cir. March 26, 2007) In order to succeed on a Title VII retaliation claim, an employee must prove that “but for” the employee’s protected conduct, the employee would not have suffered an adverse employment action. Close temporal proximity between an employee’s complaint and an adverse employment action is insufficient, on its own, to prove the requisite “but for” causation. On December 15, 2003, Strong, a nurse at UHS, complained to her supervisor that Dr. Douglas Slakey, a surgeon at the hospital, discriminated against her because she was a woman. Before and after Strong made this complaint, numerous reports against her were filed by fellow employees, patients and her supervisors, most pertaining to the disruptiveness of her negative attitude. These led to Strong’s eventual suspension with pay on March 11, 2004. Strong alleged that she was being retaliated against. After further investigation and consideration, UHS fired Strong on March 31, 2004, citing numerous incidents. The decision was made collectively by her many supervisors. On November 24, 2004, Strong filed a complaint against UHS based on Title VII retaliation. The district court granted summary judgment for UHS and Strong appealed. To survive summary judgment, Strong had to prove that UHS’s stated reason for the adverse action was merely a pretext for the real, retaliatory purpose. After a discussion about whether the Fifth Circuit used a “but for” or “causal connection” standard, the court determined that Strong was required to put forth a legally sufficient showing that she would not have been fired but for her complaint against Dr. Slakey. Strong argued that the three and a half month time between her complaint and termination was solid evidence of retaliation. The Court held that temporal proximity standing alone is insufficient to prove but for causation, noting that such a rule would tie the hands of employers. The court affirmed the district court’s grant of summary judgment in favor of UHS dismissing Strong’s retaliation claims. Burrell v. Dr. Pepper, 482 F.3d 408 (5th Cir. March 20, 2007, as revised March 22, 2007) In a Title VII race discrimination case, summary judgment is inappropriate when the facts reveal that a defendant may be acting dishonestly when giving its proposed justification for the adverse employment action. The fact finder is entitled to consider a party’s dishonesty about a material fact as affirmative evidence of guilt. Burrell was a black employee of Dr. Pepper who applied for a better position within the company. The evidence showed that Burrell’s qualifications may have exceeded those of Taszarek, the Caucasian male who was hired for the position. Furthermore, Dr. Pepper’s rationale for its hiring decision was suspect, because it had not remained consistent. The reason offered to the EEOC for promoting the Caucasian over Burrell was “purchasing experience”, but the one offered to the courts was “purchasing experience in the bottling industry.” From the evidence, a reasonable jury could conclude that Taszarek’s experience did not exceed Burrell’s and that Dr. Pepper was aware of this fact, so a reasonable fact finder could conclude that Dr. Pepper’s justification for hiring was pretext for intentional discrimination. The Fifth Circuit Court held that on the record presented, a jury could conclude that Dr. Pepper’s proffered reason for failing to promote Burrell is false, and that intentional discrimination was the real motive. Therefore, summary judgment was inappropriate.

TEXAS SUPREME COURT

Fairfield v. Stephens Martin Paving, 51 Tex. Sup. J. 491 (Tex. February 15, 2008) (publication status pending) On a certified question from the United States Court of Appeals for the Fifth Circuit, the Texas Supreme Court held that Texas public policy does not prohibit a liability insurance provider from indemnifying an award for punitive damages imposed on its insured because of gross negligence in the workers’ compensation context. Morales v. Liberty Mut. Ins. Co., 241 S.W.3d 514 (Tex. December 7, 2007) The Texas Workers’ Compensation Act provides alternative avenues for judicial review of a Texas Workers’ Compensation Commission appeals panel decision depending upon whether the nature of the dispute regards “compensability or eligibility for … benefits” or something else. The question of a workers’ employment status is one of compensability and is therefore entitled to modified de novo review. Morales suffered an on-the-job injury. In the administrative dispute over his claim, the question arose whether Morales was an employee or an independent contractor. The TWC Commission appeals panel held that Morales was an independent contractor. On appeal in the courts, Morales argued that the TWC’s determination is subject to modified-de novo review as a dispute regarding “compensability or eligibility for … benefits.” The defendants contended that it was a dispute regarding coverage and only entitled to substantial evidence review. The Supreme Court held that the question of a workers’ employment status is one of compensability. It explained that the existence of a compensable injury is the threshold requirement for payment of benefits under the Act. There are various elements that affect whether an injury is compensable, including the worker’s employment status as an employee or independent contractor at the time of injury, whether the worker was injured in the course and scope of employment, who controlled the employee’s work when the injury occurred, and whether a particular employer has an insurance policy in effect. All of these issues are issues of compensability entitled to modified-de novo review. Igal v. Brightstar Info. Tech. Group, Inc., __ S.W.3d __, 51 Tex. Sup. J. 184 (Tex. December 7, 2007) In 1989, the Legislature amended the Texas Payday Law to create an administrative procedure for a claimant to file a wage claim with the Texas Workforce Commission (TWC). The administrative procedure provided by the Texas Payday Law is not the exclusive remedy for claimants. Claimants are still permitted to bring common law claims for unpaid wages. However, when a claimant pursues a wage claim to a final adjudication before the TWC, res judicata bars the claimant from later filing a lawsuit for the same damages in a Texas court of law. Res judicata bars the timely common law claim even when the TWC made its final determination on the basis that the claimant failed to file a timely claim under the Texas Payday Law. Montgomery County v. Park, 51 Tex. Sup. J. 160 (Tex. November 30, 2007) (publication status pending) Under the Texas Whistleblower Act, an employee can establish that his or her employer took an adverse personnel action against the employee if the personnel action is material, and thus likely to deter a reasonable, similarly situated employee from reporting a violation of the law. See Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006).

SPRING 2008 NEWSLETTER INSURANCE LAW UPDATE

admin — Tue, 01 Apr 2008 12:05:03 +0000

by Leslie Echols Pitts and Rebecca Raper

TEXAS SUPREME COURT - RECENT OPINIONS

Unauthorized Practice of Law Committee v. American Home Assurance Co., Inc., ___ Tex. Sup. Ct. J.___ (Tex. March 28, 2008). An insurer may use captive counsel or staff attorneys to defend a claim against an insured if the insurer’s interest and the insured’s interest are congruent and if the affiliation is fully disclosed to the insured. In reaching this decision, the Court recognized that: “Liability insurance policies commonly provide that the insurer must indemnify the insured from liability for covered claims and give the insurer the duty, and also the right, to defend such claims. The right to defend in many policies gives the insurer complete, exclusive control of the defense. Insurance companies retain attorneys in private practice to represent insureds in defending claims against them, but for decades, in Texas and other states, insurers have also used staff attorneys – salaried company employees – to save costs.” Nationwide Ins. Co. v. Elchemimi, ___ Tex. Sup. Ct. J.___ (Tex. March 28, 2008). For purposes of a UM policy, a collision between the covered vehicle and an axle-wheel assembly separated from an unidentified semi-trailer truck did not involve the requisite “actual physical contact” with a “motor vehicle” to invoke coverage. In Elchemimi, the insured claimants sought coverage under the UM portion of their personal auto policy after their vehicle was struck by an axle-wheel assembly and attached tandem wheels that separated from a semi-trailer. The semi-trailer did not stop. The court determined that for purposes of the UM statute and related coverage, the axle-wheel assembly did not constitute a “motor vehicle” National Union Fire Insurance Company v. Crocker, 51 Tex. Sup. Ct. J. 518 (Tex. February 15, 2008). There is no duty to provide a defense absent a request for coverage. In Crocker, the Texas Supreme Court was asked to answer certified questions from the Fifth Circuit Court of Appeals regarding a carrier’s obligations when it knows that one who qualifies as an insured under its policy has been sued and served but has not requested a defense. The Court held that the purpose of the “delivery-of-suit-papers provisions in insurance policies” is twofold: (1) to facilitate a timely and effective defense of the claim and (2) to trigger the insurer’s duty to defend. The Court went on to say that mere awareness by the carrier that an additional insured has been sued and/or served does not trigger a defense obligation, that “there is no unilateral duty to act unless and until the additional insured first requests a defense.” Finally, the Court explained that the carrier had no duty to notify the additional insured of coverage, though doing so may be wise from a business perspective. Fairfield Insurance Company v. Stephens Martin Paving, LP., 51 Tex. Sup. Ct. J.. 491 (Tex. February 15, 2008). There is no public-policy prohibition for coverage for a punitive damages award based on a gross negligence finding in the context of a workers’ compensation claim. In Fairfield, the Texas Supreme Court responded to another certified question from the Fifth Circuit, namely whether Texas public policy prohibits a liability insurer from indemnifying an award of punitive damages imposed on its insured for gross negligence. The Fairfield case involved the claims of the estate of an employee who was killed while in the course and scope of his employment. The carrier argued that it was not obligated to pay any punitive damages award against the insured employer under the theory that Texas public policy prohibits coverage for punitive damages. The Fairfield Court first addressed the question in a very limited manner, under the terms of the relevant policy before it, which contained two kinds of coverage: worker’s compensation and employer’s liability. Noting that the policy form was promulgated by the Texas Department of Insurance and is the only form approved to comply with the Texas Workers’ Compensation statute, the Court determined that the statutory scheme and TDI’s promulgation of that form “reveal an intent to provide additional insurance coverage – coverage for an employer’s gross negligence.” The court further concluded that the “Legislature’s expressed intent is that Texas public policy does not prohibit insurance coverage for claims of gross negligence in this context.” Having determined that there is no public-policy prohibition for coverage for a punitive damages award based on a gross negligence finding in the context of workers’ compensations claims, the Court turned to the broader question of coverage for punitive damages outside the context of the policy before it. The Fairfield Court engaged in a thorough review of other jurisdictions’ views on the question, then outlined a potential tension between the public policy favoring the preservation of the freedom to contract and the underlying purpose of punitive damages, i.e., to punish the wrongdoer. After a very lengthy discussion of considerations it deemed critical to the question, the Fairfield Court refused to make a bright-line finding, suggesting instead that the public policy questions must be weighed as to the particular circumstances of each claim. Evanston Insurance Company v. Atofina Petrochemicals, Inc., 51 Tex. Sup. Ct. J. 460 (Tex. February 15, 2008). (1) The language of the additional insured endorsement and not the agreement between the insured and additional insured determine the extent of coverage afforded to the additional insured. (2) A carrier who opts to forego involvement in settlement negotiations also gives up the right to challenge the product of those negotiations. (3) The “Prompt Payment of Claims” statute does not apply to indemnity obligations in the context of a liability policy. With regards to the additional insured question before it, the Evanston Court determined that the language of the additional insured endorsement controlled. In particular, while the contract between the named insured and the additional insured did not require the named insured to indemnify the additional insured for the additional insured’s own sole negligence, the additional insured endorsement in the policy did not reflect any “sole negligence” limitations. Accordingly, the additional insured was insured for all purposes under the relevant policy. With regards to whether an insurer can challenge the reasonableness of a settlement after that insurer wrongfully denied coverage, the Evanston Court unequivocally found that the insurer before it lost the ability to challenge the reasonableness of the amount of the settlement. In particular, the Evanston Court explained that a carrier who opts to forego involvement in settlement negotiations also gives up the right to challenge the product of those negotiations. Finally, the Evanston Court examined whether the Texas “Prompt Payment of Claims” statute and its 18% penalty applied to the $5.75 million in covered indemnity obligations. The Court held that such costs were classic “third party” damages not covered by the relevant statute, which applies only to first-party costs, which has previously been interpreted to be “the insured’s own loss.” Excess Underwriters at Lloyds v. Frank’s Casing Crew & Rental Tools, Inc., 51 Tex. Sup. Ct. J. 397 (Tex. February 15, 2008). In a complete reversal of its earlier opinion in the case, the Frank’s Casing Court held that an insurer has no right to seek reimbursement from an insured if the insurer later prevails in a coverage suit unless the insured has specifically agreed to reimbursement in those circumstances. When initially decided, the Frank’s Casing decision stood for the proposition that an insurer can seek reimbursement from an insured of settlement dollars paid, at least in certain situations. In particular, the original opinion held that a carrier has a right to be reimbursed if it has: (1) timely asserted its reservation of rights; (2) notified the insured it intends to seek reimbursement; and, (3) paid to settle claims that were not covered. The Court ruled that once an insured asserts that a settlement offer has triggered a Stowers duty, and the insurer accepts the settlement offer or a lower one, the insured is estopped from asserting that the settlement is too much of a financial burden for the insured to bear if it turns out that the claim is not covered. On rehearing, the Court reversed its position, holding that an insurer has no right to seek reimbursement from an insured if the insurer later prevails in a coverage suit unless the insured has specifically agreed to reimbursement in those circumstances. The new Frank’s Casing decisions affirms a previous Texas Supreme Court case involving an insurer’s reimbursement rights, Texas Association of Counties County Government Risk Management Pool v. Matagorda County, 52 S.W.2d 128 (Tex. 2000). In Matagorda County, the Texas Supreme Court held that an insurer could seek reimbursement from its insured only if the insured clearly and unequivocally consented to both the settlement and the insurer’s right to seek reimbursement. In the new Frank’s Casing decision, the Court declined to overrule or create an exception to Matagorda County. PAJ v. The Hanover Ins. Co., 243 S.W.3d 630 (Tex. January 11, 2008). Insured’s failure to timely notify insurer of claim or suit does not defeat coverage under the policy if the insurer is not prejudiced by the delay. The PAJ Court extended application of the prejudice requirement beyond the “bodily injury” and “property damage” liability context, broadly holding that unless material, breaches of an occurrence-based liability policies’ notice provisions will not defeat coverage except where the insurer can demonstrate some resulting harm. Specifically, the Court was asked to decide whether an insured's failure to timely notify its insurer of a claim defeated coverage under a liability policy where the insurer was not prejudiced by the delay. The court held that immaterial breaches of the policy’s notice conditions could not relieve the insurer of its contractual coverage obligations. Mid-Continent Ins. Co. v. Liberty Mutual Ins. Co. , 236 S.W.3d 765 (Tex. October 12, 2007). When carriers insure on the same level and in the same amount, they have no common law or contractual right to compel the proportionate contribution of a co-insurer unless properly subrogated to a recognized right of recovery on the insured’s part. An overpaying co-insurer has no direct right of reimbursement or contribution against the underpaying co-insurer. When carriers insure on the same level and in the same amount, they have no common law or contractual right to compel the proportionate contribution of a co-insurer unless properly subrogated to a recognized right of recovery on the insured's part. Where the insured has no common law cause of action against the underpaying co-insurer and, having been fully indemnified, no contractual rights remaining against the same, the insured has no rights to which the overpaying co-insurer may in turn be subrogated and an action against the underpaying co-insurer maintained. Thus, when two or more carriers insure on an equal basis, any carrier who pays more than its proportionate share does so at its own peril. Lamar Homes Inc. v. Mid-Continent Casualty Co., 239 S.W.3d 236 (August 31, 2007). (1) Allegations of unintended construction defects that cause damage to the structure itself can constitute and accidental “occurrence” of “property damage” for purposes of defense under a CGL policy. (2) The penalties available under the state's “Prompt Payment of Claims” statute can be applied where an insurer wrongfully refuses to defend its insured. A homebuilder sought coverage for claims asserted against it by homebuyers for alleged construction defects. The carrier refused to defend the builder, arguing the claims were not covered under the policy because there was no “occurrence” of “property damage.” The builder, in turn, claimed that the carrier had a duty to defend and its failure to do so was a violation of article 21.55. The Texas Supreme Court finally held that where the underlying complaint asserts that an insured's defective construction unintentionally caused damage to the structure itself, an accidental “occurrence” of “property damage” is sufficiently under a CGL Policy, at least for purposes of determining an insurer's defense obligations. It is irrelevant that the damage was limited to the insured’s own work/product (the house) because (1) the policy “does not define ‘occurrence’ in terms of the ownership or character of the property damaged” and (2) the face of the “property damage” definition “does not eliminate the general contractor’s work.” Where an insurer wrongfully refuses to defend its insured, the penalties available under Texas's prompt-payment of claims statute may apply to those defense costs. Fortis Benefits v. Cantu, 234 S.W.3d 642 (June 29, 2007). The equitable “made whole” doctrine - the rule that an insurer is not entitled to subrogation of medical benefits unless the insured has been “made whole” - must yield to an insurer’s contract-based right of subrogation. Cantu suffered severe injuries in an auto accident and later sued the driver of the vehicle in which she was riding, his employer, the vehicle seller, and the vehicle manufacturer. Fortis intervened and asserted contractual subrogation and reimbursement rights to recoup from Cantu's tort recovery the amount of medical benefits it had paid under the policy. After Cantu settled her claims, she and Fortis disputed what portion of the settlement proceeds, if any, should go to Fortis, and Cantu moved for summary judgment, arguing she had not been “made whole” by the settlement and thus Fortis's contractual claims of subrogation and reimbursement unlawful. The Fortis Court held that the equitable “made whole” doctrine is inapplicable when the parties’ agreed contract provides a clear and specific right of subrogation. TEXAS SUPREME COURT - PENDING ISSUES OneBeacon Ins. Co. v. Don’s Bldg. Supply, Inc., 496 F.3d 361 (5th Cir. Tex. 2007). Currently before the Texas Supreme Court on certified question:

When not specified by the relevant policy, what is the proper rule under Texas law for determining the time at which property damage occurs for purposes of an occurrence-based commercial general liability insurance policy?

Under the rule identified in the answer to the first question, have the pleadings in lawsuits against an insured alleged that property damage occurred within the policy period of an occurrence-based commercial general liability insurance policy, such that the insurer's duty to defend and indemnify the insured is triggered, when the pleadings allege that actual damage was continuing and progressing during the policy period, but remained undiscoverable and not readily apparent for purposes of the discovery rule until after the policy period ended because the internal damage was hidden from view by an undamaged exterior surface?

Trinity Universal Ins. Co. v. Cellular One Group, 2007 Tex. App. Lexis 96 (Tex. App. Dallas Jan. 9, 2007), pet. granted, Nov. 30, 2007. Samsung Elecs. Am. v. Fed. Ins. Co., 2006 Tex. App. Lexis 9407 (Tex. App. Dallas Oct. 18, 2006), pet. granted, Nov. 30, 2007. Nokia, Inc. v. Zurich Am. Ins. Co., 2006 Tex. App. Lexis 9375 (Tex. App. Dallas Oct. 18, 2006), pet. granted, Nov. 30, 2007. On appeal from the Fifth District Dallas Court of Appeals: Whether allegations that radiation may cause adverse health effects on the human body constitute claims for “bodily injury” under liability policies? Johnson v. State Farm Lloyds, 204 S.W.3d 897, 2006 Tex. App. Lexis 9336 (Tex. App. Dallas 2006), pet. granted, September 28, 2007. On appeal from the Fifth District Dallas Court of Appeals: Whether an appraiser selected under the appraisal clause of a homeowners’ policy has the authority to decide questions of causation ore merely the dollar amount of the claimed damages? Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 2006 Tex. App. Lexis 5950 (Tex. App. Houston (14th Dist) July 6, 2006), pet. granted, Aug. 31, 2007. On appeal from the Fourteenth Houston District Court of Appeals: Whether extrinsic evidence is admissible to establish a duty to defend when the plaintiff's petition is silent on a particular coverage issue?

WINTER 2009 NEWSLETTER EMPLOYMENT LAW UPDATE

admin — Wed, 21 Jan 2009 12:00:47 +0000

by John Husted

United States Supreme Court

Crawford v. Metropolitan Government of Nashville, __ U.S. __, 2009 U.S. Lexis 870 (January 26, 2009) An employee who speaks out about discrimination not on her own initiative, but in answering questions during an employer’s internal investigation, is protected by the anti-retaliation provisions of Title VII. During an internal investigation into alleged sexual harassment by the Metro employee relations director, Hughes, Crawford, a 30-year employee stated that Hughes had sexually harassed her. Soon thereafter, Metro fired Crawford, alleging embezzlement. Metro took no disciplinary action against Hughes. According to Title VII, it is unlawful “for an employer to discriminate against any…employe[e]” who (1) “has opposed any practice made an unlawful employment practice by this subchapter” (opposition clause), or (2) “has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter” (participation clause). The Supreme Court clarified that “oppose” is defined by its ordinary dictionary meaning of resisting or contending against, and active, consistent opposition is not the standard. “Oppose” may cover someone who has taken no action at all to actively advance a position beyond disclosing it. Thus, Crawford’s statement in response to questioning is covered by the opposition clause. Kennedy v. Plan Admin. For DuPont Savings & Inv. Plan, __ U.S. __, 2009 U.S. Lexis 869 (January 26, 2009) Under the Employee Retirement Income Security Act of 1974 (ERISA), only a qualified domestic relations order (QDRO) can constitute an assignment or alienation of a beneficiary’s interest in a savings and investment plan (SIP). A divorce decree that clearly purports to waive the divorcee beneficiary of her interest in her husband’s SIP fails to do so if it is not a recognized QDRO or accompanied by a recognized QDRO. Upon his marriage to Liv Kennedy, William Kennedy designated her as the beneficiary of his SIP. Later, they divorced. The divorce decree purported to divest Liv of her interest in the SIP benefits, but William did not execute a qualifying document removing Liv as the SIP beneficiary. Upon Williams death, the SIP administrator relied on William’s original designation form and paid the SIP benefits to Liv. William’s Estate filed suit, alleging that Liv waived her SIP benefits via the divorce, and thus the SIP administrator violated ERISA by paying Liv. ERISA obligates administrators to manage SIP plans “in accordance with the documents and instruments governing” them, and requires covered pension benefit plans to “provide that benefits ... may not be assigned or alienated,” except by QDROs, which have specific and objective criteria. For instance, “where the beneficiary does not attempt to direct her interest in pension benefits to another person,” there is no waiver. The Court concluded that because Liv did not attempt to direct her interest in the SIP benefits to the Estate or to any other potential beneficiary, the divorce waiver did not constitute a QDRO and there was no assignment or alienation. The Court explained that if the rules were more lenient, plan administrators would be forced to examine numerous external documents purporting to be waivers. Locke v. Karass, __ U.S. __, 2009 U.S. Lexis 590 (January 21, 2009) A local union may charge nonmembers for national litigation expenses without violating the First Amendment. So long as the litigation is (1) appropriately related to collective bargaining rather than political activities, and (2) the charge is reciprocal in nature, i.e., the contributing local reasonably expects other locals to contribute similarly to the national’s resources used for cost of similar litigation on behalf of the contributing local if and when it takes place, the First Amendment permits a local union to charge nonmembers for national litigation expenses. Kentucky v. EEOC, __ U.S. __, 128 S. Ct. 2361 (June 19, 2008) A retirement plan that provides for disability retirement benefits does not discriminate based on age even though workers who become disabled when older receive less disability retirement benefits than workers who become disabled when younger, so long as the difference in treatment is not “actually motivated” by age. The State of Kentucky’s retirement benefits plan gives disability retirement benefits to policemen, firemen and other hazardous position workers once they meet certain requirements. Under the plan, a worker becomes eligible for normal retirement benefits at age 55. Normal retirement benefits are determined according to an employee’s actual years of service. On the other hand, a worker that becomes disabled is eligible for disability retirement benefits. Disability retirement benefits are determined by adding the number of years the employee would have had to continue working in order to become eligible for normal retirement benefits at age 55 to an employee’s actual years of service. A worker became disabled at age 61 and retired. Under the plan, his pension was based only on his actual years of service. No additional years for disability were calculated, because he became disabled well after age 55. The worker filed an age discrimination complaint with the EEOC. The Court held that Kentucky’s Plan did not constitute age discrimination. The Plan was not based on a “prohibited stereotype” against older workers; rather, the difference in treatment between workers disabled before or after age 55 was not “actually motivated” by age. Age and pension status remained analytically distinct concepts in this instance, and pension status was not used as a proxy for age. Meacham v. Knolls Atomic Power Lab., __ U.S. __, 128 S. Ct. 2395 (June 19, 2008) In the context of a disparate-impact claim under the Age Discrimination in Employment Act (ADEA), an employer raising the defense of “reasonable factors other than age” bears both the burden of production of evidence and the burden of persuading the factfinder of the defense’s merit. The National Government ordered its contractor, Knolls, to reduce its workforce. To do so, Knolls scored its employees on various aspects such as “performance,” along with years of service to determine who was laid off. Of the 31 employees laid off, 30 were at least 40 years old. These employees filed an ADEA disparate-impact claim. Knolls provided some evidence supporting its defense that it relied on reasonable factors other than age (RFOA), but the Second Circuit wrongly placed the burden of showing the reasonableness of the RFOA defense on the plaintiffs. The Supreme Court’s holding clarified that the burden of persuasion as to the RFOA defense is on the employer, and the Court vacated and remanded. Metro. Life Ins. Co. v. Glenn, __ U.S. __, 128 S. Ct. 2343 (June 19, 2008) If an ERISA plan administrator both determines whether an employee is eligible for benefits, and pays the benefits out of its own pockets, then a conflict of interest exists that a reviewing court should consider as a factor when determining whether said plan administrator has abused its discretion in denying benefits. The significance of the factor varies on a case by case basis. MetLife was the administrator and insurer of Sears’ long-term disability insurance plan, which is governed by ERISA. As such, MetLife had discretionary authority to determine the validity of an employee’s benefits claim and had the responsibility to pay valid claims. MetLife, as administrator, reviewed the case of a Sears employee who was receiving disability benefits. MetLife found that she could return to work and denied her benefits. Pursuant to ERISA, the employee sought federal court review of the denial. The district court denied relief. The Sixth Circuit Court reversed, finding a conflict of interest, since MetLife both determined an employee’s eligibility for benefits and paid the benefits. The Supreme Court concluded that a conflict of interest existed, and affirmed the Sixth Circuit’s reversal. Such a conflict of interest should be a factor for a court to consider when determining whether a plan administrator abused its discretion when denying benefits. Engquist v. Oregon Dept. of Agriculture, __ U.S. __, 128 S. Ct. 2146 (June 9, 2008) Public employees do not have a constitutional right under the equal protection clause to challenge arbitrary employment decisions, because the government is granted more discretion in its role as an employer than as a regulator. This case concerns “class-of-one” claims for equal protection. The plaintiff alleged arbitrary treatment by her public employer, but her claim did not allege that the discriminatory treatment was based on membership in a protected class, such as race, sex, national origin, age or disability. The Court held that a “class-of-one” theory of equal protection does not apply in the public employment context. Rather, the state’s personnel decisions, “by their nature involve discretionary decision making based on a vast array of subjective, individualized assessments.” The Court effectively limited employment discrimination claims against governmental entities to the prescribed statutory categories of race, sex, national origin, age, disability, and retaliation. Claims of arbitrary treatment not tied to those categories will not be decided in the courts. CBOCS West, Inc. v. Humphries, __ U.S. __, 128 S. Ct. 1951 (May 27, 2008) Section 1981, which gives “[a]ll persons…the same right…to make and enforce contracts…as is enjoyed by white citizens,” encompasses retaliation claims. An employee of CBOCS brought an action under both Title VII and §1981 claiming that he was dismissed because he was black and because he complained to superiors that a black co-employee was dismissed based on race. The employee’s Title VII claim was dismissed for failure to timely pay filing fees, but the Seventh Circuit remanded the §1981 retaliation claim, finding that §1981 encompassed retaliation claims The Supreme Court affirmed, concluding that §1981 encompasses retaliation claims. The Court’s decision rested significantly upon stare decisis principles. The Court noted that §1982, which the Court has long interpreted consistently with §1981, encompasses retaliation claims, and Federal Courts of Appeals have uniformly interpreted §1981 to encompass retaliation claims ever since the Civil Rights Act of 1991. Gomez-Perez v. Potter, __ U.S. __, 128 S. Ct. 1931 (May 27, 2008) The Age Discrimination in Employment Act of 1967 (ADEA) prohibits retaliation against a federal employee who complains of age discrimination, but it is unclear how this applies to state and local government employees. Section 633a(a), the federal-sector provision of the ADEA, requires that “[a]ll personnel actions affecting employees…at least 40 years of age…be made free from any discrimination based on age.” A 45 year-old postal worker claimed that her employer violated the federal-sector provision by subjecting her to various forms of retaliation after filing an administrative ADEA complaint. The First Circuit affirmed summary judgment against the retaliation claim, finding that §633a(a)’s prohibition of age discrimination does not cover retaliation. The Supreme Court, however, held that §633a(a) prohibits retaliation against a federal employee who complains of age discrimination, noting that the language of §633a(a) is similar to other antidiscrimination statutes that cover retaliation, namely Title IX, which applies to sex discrimination.

Fifth Circuit

Continental Airlines, Inc. v. Air Line Pilots Ass’n, Int’l, __ F.3d __, Case No. 07-20835 (5th Cir. January 13, 2009) A district court cannot reverse an administrative order to reinstate an employee that is made pursuant to a collective bargaining agreement, unless there are statutory or public policy grounds for doing so. An airline pilot represented by Air Line Pilots Association (“ALPA”) was terminated, and appealed his termination to the System Board of Adjustment (“SBA”). Pursuant to the controlling collective bargaining agreement, the SBA issued an order reinstating the pilot. Upon review, the district court reversed the reinstatement order. The pilot appealed the reversal, claiming that the district court failed to give proper deference to the SBA decision, and that the SBA decision did not contravene public policy. The Fifth Circuit Court reversed the district court’s reversal. So long as there is no statutory or public policy grounds on which to reverse the SBA’s decision, and so long as the SBA’s decision may be supported by any analysis of the controlling employment agreement, the court must defer to the SBA’s decision. In this case, the SBA’s decision arguably is supported by an analysis of the controlling employment agreement and there are no statutory or public policy grounds on which to base a reversal. Taylor v. United Parcel Serv. Inc., __ F.3d __, 105 Fair Empl. Prac. Cas. (BNA) 6 (5th Cir. December 30, 2008) In a race-based discrimination and retaliation suit, where the plaintiff is a class member of an ongoing, concurrent class action that is based on related but different charges of discrimination, the statute of limitations is tolled through the conclusion of the appeal of that concurrent class action. An African-American employee filed a race discrimination and retaliation suit against UPS in 2003. The employee was a class member of a somewhat related class action based on race discrimination. The class action was dismissed by the lower court in 2000, but did not reach a final determination on appeal until 2004. The cases did have some differences, namely that plaintiff added retaliation claims that were related to his participation in the class action. The district court granted summary judgment to the employer, in large part because it believed the statutes of limitations ceased tolling. The Fifth Circuit vacated and remanded the district court’s grant of summary judgment, concluding that all of the plaintiff’s claims were timely, because the statute of limitations was tolled through the conclusion of the appeal of the class action in 2004, not the dismissal by the lower court in 2000. Poche v. Texas Air Corps, Inc., 549 F.3d 999 (5th Cir. November 19, 2008) A district court may not remand to state court a case that includes a federal question under the Fair Labor Standards Act (“FLSA”), even though the case is predominated by state law. A district court abused its discretion when it remanded an entire case to state court where it included a federal question under the FLSA, even though the case was “predominated” by state law. The Fifth Circuit concluded that the district court was without authority to remand the FLSA claim; however, the disposition of the state law claims was left to the discretion of the district court. Hopkins v. Cornerstone America, 545 F.3d 338 (5th Cir. October 13, 2008) A worker may successfully argue that he is an employee under the Fair Labor Standards Act (FLSA), even though he argued in a previous, unrelated suit that he is an independent contractor under another statute. Plaintiffs, fourteen former sales leaders of defendant Cornerstone America, filed suit for unpaid overtime wages under the FLSA. The district court ruled that one plaintiff, Fox, was judicially estopped from arguing his employment status, because he had previously claimed to be an independent contractor in an unrelated sexual harassment lawsuit brought under the Texas Commission on Human Rights Act. Fox challenged the judicial estoppel. The Court noted that, putting the semantic inconsistency aside, it is legally possible to be an employee under the broad FLSA and an independent contractor under most other statutes. The Court concluded that the risk of legally inconsistent court determinations can be avoided in this situation and vacated the judicial estoppel. Abner v. Kansas City Southern Railway Co., 541 F.3d 372 (5th Cir. August 14, 2008) A court may award reasonable fees and costs in an employee race discrimination suit to an ultimately prevailing plaintiff for an initial trial that ended in a hung jury. Eight employees of the Railway Company sued the railway alleging race discrimination. The first trial resulted in a hung jury, but after the second trial, the jury found for the employees and awarded punitive damages. Plaintiffs then filed for attorneys’ fees and costs for both the first and second trials. The court awarded fees accrued for both the first and second trials. Defendant appealed, urging that Plaintiffs should not be reimbursed for fees and costs accrued during the first trial. Considering the reasonableness of the fees and costs and the level to which the Plaintiffs prevailed, the Fifth Circuit found that the district court did not abuse its discretion in awarding attorneys’ fees and costs for the first trial. Carmona v. Southwest Airlines Co., 536 F.3d 344 (5th Cir. July 16, 2008) The grievance procedures of a collective bargaining agreement or the Railway Labor Act (RLA) do not preclude suits for discrimination under Title VII or the ADA from being brought in court. The plaintiff, a flight attendant, was allegedly terminated for excessive absenteeism. He followed the grievance procedures as provided by the collective bargaining agreement between Southwest and the Transport Workers Union of America and by the RLA, but his termination was upheld. He also filed charges of sex discrimination under Title VII and disability discrimination under the ADA. The district court granted summary judgment to Southwest, concluding that the claims were precluded by the grievance procedures. The Fifth Circuit reversed, concluding that the plaintiff’s discrimination claims under Title VII and the ADA cannot be resolved through the grievance procedures of the collective bargaining agreement or of the RLA; rather, a lawsuit is proper. James v. Tex. Collin County, 535 F.3d 365 (5th Cir. July 14, 2008) A county policy prohibiting employees from political campaigning while working does not violate the First Amendment, because it is sufficiently viewpoint neutral and limited in scope. A county employee sued the county alleging violations of his First Amendment rights arising from the termination of his employment subsequent to his lost bid to become the Republican nominee for county commissioner. Essentially, his employment was terminated pursuant to the county policy that prohibited political campaigning by employees while working. The court found that there was no evidence that the termination violated the First Amendment and the county policy was sufficiently viewpoint neutral and limited in scope. Nelson v. Univ. of Texas, 535 F.3d 318 (5th Cir. July 10, 2008) A claim for reinstatement under the Family and Medical Leave Act (“FMLA”) falls within the Ex parte Young exception to Eleventh Amendment sovereign immunity, which permits prospective injunctive or declaratory relief against a state official. Nelson was employed with the University of Texas at Dallas (“UTD”). After a severe car accident and the suicide of his son, Nelson went on FMLA leave. UTD approved the request for leave subject to FMLA policies. Prior to the twelve weeks of leave guaranteed by the FMLA, UTD terminated Nelson for absenteeism and refused to reinstate him. Nelson, seeking reinstatement, sued the administrative head of UTD, David Daniel, in his official capacity. Generally, suits against state officials in their official capacity are treated as suits against the State of Texas, which are normally barred by the Eleventh Amendment. The Fifth Circuit Court, however, found that Nelson’s suit against Daniel seeking reinstatement pursuant to the FMLA falls within the exception to Eleventh Amendment immunity created by Ex parte Young, 209 U.S. 123 (1908). That exception to immunity permits prospective injunctive or declaratory relief against a state official. Reinstatement under the FMLA is a form of prospective relief covered by the Ex parte Young exception. Aryain v. Wal-Mart Stores Tex., 534 F.3d 473 (5th Cir. July 8, 2008) Under Title VII, an employer cannot avail itself of the Ellerth/Faragher defense to vicarious liability when it fails to prove by a preponderance of the evidence that it exercised reasonable care to prevent and to promptly correct any sexually harassing behavior. The employee brought sexual harassment and constructive discharge claims under Title VII against Wal-Mart. She established her prima facie case for sexual harassment, but did not establish her claim of constructive discharge because the alleged sexual harassment by her former supervisor was not so egregious as to compel a reasonable employee to resign, and her new supervisors’ conduct after her transfer did not reach the level required for a constructive discharge claim. Therefore, Wal-Mart was entitled to raise the Ellerth/Faragher defense to vicarious liability. Evidence revealed, however, that there was a material fact dispute as to whether Wal-Mart failed to exercise reasonable care in not responding to the former supervisor’s harassing behavior before the employee’s father called to complain. Therefore, summary judgment as to the employee’s harassment claim was reversed. Elsensohn v. St. Tammany Parish Sheriff’s Office, 530 F.3d 368 (5th Cir. June 6, 2008) The protections of the FMLA do not extend to relatives and friends of FMLA complainants. Elsensohn was an officer with the Sheriff’s Office. His wife, who also worked with the Sheriff’s Office, had brought an FMLA complaint against the Sheriff’s Office. Her FMLA complaint was settled, and she no longer worked for the Sheriff’s Office. After being denied several promotions, Elsensohn brought his own claim, alleging retaliation under the FMLA as a result of his association with his wife who had opposed unlawful practices related to the FMLA. The district court concluded that Elsensohn could not satisfy his prima facie case. The Fifth Circuit Court affirmed, thereby refusing to expand the anti-retaliation provisions of the FMLA beyond the plain meaning of the statute to include relatives and friends of FMLA complainants. Hagan v. Echostar Satellite, L.L.C., 529 F.3d 617 (5th Cir. May 30, 2008) Informal complaints constitute protected activity under the Fair Labor Standards Act (FLSA), but an employee’s comments made within his capacity as a representative of the company and not while acting in an adversarial role do not constitute informal complaints. Echostar made scheduling changes that eliminated overtime pay for many technicians, Hagan, a manager of several technicians, presented the change to them in a way that his superiors felt was poor, and his employment was subsequently terminated. Hagan claimed that he was retaliated against for engaging in protected activity under the FLSA. According to the FLSA, it is unlawful to discriminate against an employee “because such employee has filed any complaint…under or related to this chapter....” Though the Court adopted the rule that informal complaints constitute protected activity under the FLSA, Hagan’s actions did not rise to the level of an informal complaint. He did not frame any of his objections in terms that alleged any potential illegality of the change. Also, he did not “step outside his role of representing the company…by actively assisting other employees in asserting FLSA rights,” or by otherwise engaging in activities reasonably perceived as assertions of FLSA rights. United States v. W. Indep. Sch. Dist., 527 F.3d 439 (5th Cir. May 9, 2008) A claim brought under the False Claims Act against a school or other local government entity fails if it is based on information already publicly disclosed and if the claimant was not the original source of the information. Joseph Fried brought a qui tam fraudulent claims action against West ISD, because the school district would allow certain retiring teachers, which were covered by another retirement system, to work their last day as a non-teacher in order to obtain Social Security coverage. Under the Social Security Act, for government employees to be covered by Social Security, they must not be covered by another retirement system. Fried’s claim was based on information that had been publicly disclosed on several occasions prior to the suit. Also, Fried was not the original source of the information. The False Claims Act permits suits by private parties on behalf of the U.S. against anyone submitting a false claim to the government, but it also “prevent[s] parasitic suits by opportunistic late-comers who add nothing to the exposure of fraud.” To prevent parasitic suits, the Act strips subject matter jurisdiction over a claim of alleged fraud based on information that has been publicly disclosed, unless the person bringing suit is an original source. Fried’s claim was dismissed, because the information that was the very essence of the allegations had been publicly disclosed on several occasions prior to suit. Further, Fried could not show that he was the original source of the information, because he failed to show that his information was qualitatively different from previously discovered information. Charles v. Grief, 522 F.3d 508 (5th Cir. March 26, 2008) For a First Amendment retaliation claim, it is an objectively unreasonable violation of an employee’s First Amendment rights if the employee was fired because of constitutionally protected speech. Charles, a systems analyst for the Texas Lottery Commission, sent emails that raised concerns about racial discrimination and retaliation within the Commission and that alleged violations of Texas law and the mishandling of funds to high-ranking Commission officials and members of the Texas Legislature. Grief, a Commission official, told Charles to meet with his immediate supervisor to answer questions about the emails. Charles asked the supervisor to give the questions in writing, and the supervisor agreed. Later that day, Grief fired Charles on the spot for insubordination for refusing to respond to requests from superiors. Charles sued Grief and the Commission for employment retaliation in violation of his First Amendment free speech rights. Grief’s motion for dismissal based on qualified immunity was denied. The Fifth Circuit Court affirmed the denial in part, because the district court correctly determined that, if Charles could prove that the defendant fired him for his “speech,” plaintiff successfully alleged an objectively unreasonable violation of his First Amendment rights, because the speech for which he was putatively fired was entitled to constitutional protection.

Texas Supreme Court

Dallas Area Rapid Transit v. Amalgamated Transit Union Local No. 1338, __ S.W.3d __, 52 Tex. Sup. J. 208 (Tex. December 19, 2008) When a public transit authority is sued for breach of contract pursuant to their collective bargaining agreement with an employee’s union, the public transit authority is immune from suit. While operating under a collective bargaining agreement governed by the Federal Transit Act, DART and its employees resolved a general grievance over wages and benefits. When DART did not adhere to the resolution, the union sued for breach of contract. The Supreme Court of Texas held that the transit authority’s state-law immunity from suit is not preempted by the agreement. The union’s recourse is to the procedures approved in the arrangement, not through suit. According to Section 13(c) of the Federal Transit Act, a public transportation authority’s receipt of federal financial assistance is conditioned upon fair and equitable arrangements to protect the interests of employees. This includes providing for procedures in the agreement that protect the individual employees. The Court concluded that the employees’ recourse is in utilizing these administrative procedures provided by the agreement, not bringing suit. S.W. Bell v. Mitchell, __ S.W.3d __, 52 Tex. Sup. J. 202 (Tex. December 19, 2008) In a workers’ compensation case, a self-insured employer is not precluded from contesting the compensability of death benefits after seven days have passed, so long as the employer contests before sixty days. The petitioner’s wife claimed she contracted a deadly disease at work. When she died, her husband claimed workers’ compensation benefits. After 43 days of receiving notice of the injury, Bell contested compensability. Previously, the Supreme Court in Continental Casualty Co. v. Downs, 81 S.W.3d 803, 804 (Tex. 2002), construed the Workers’ Compensation Act to essentially preclude a carrier from contesting the compensability of an employee’s injury after seven days of receiving notice. Within a year of that decision, however, the Legislature amended the Act, clarifying that a carrier does not waive the right to contest the compensability before sixty days. Noting that stare decisis is not absolute, the Supreme Court overruled Downs and the employer’s challenge to compensability on the 43rd day was not precluded. AutoZone v. Reyes, __ S.W.3d __, 104 Fair Empl. Prac. Cas. (BNA) 1812 (Tex. December 5, 2008) A manager’s statement that the employer intended to get rid of “the old people,” along with evidence that some younger employees who violated the employer’s sexual harassment policy were not fired was insufficient to support a finding of age discrimination under the Texas Commission on Human Rights Act. Reyes, a sixty-two-year-old employee, sued AutoZone for age discrimination after his discharge. AutoZone contended that he was fired for sexual harassment. Reyes presented evidence of a manager stating that AutoZone intended to get rid of “the old people,” and evidence that some younger employees who violated the sexual harassment policy either were not fired or were eligible for rehire with notations on their records. The Texas Supreme Court reversed the court of appeals determination that there was sufficient evidence to support a finding of age discrimination. The manager who made the statement had no influence over, and played no part in, the discharge of Reyes, and, in context, “old people” referred to length of time employed, not age. Also, the evidence of different treatment for younger employees was not sufficiently similar and not probative. In Re: Poly-America, L.P., 262 S.W.3d 337 (Tex. August 29, 2008) Provisions in an arbitration agreement between an employer and employee that are substantively unconscionable under the Texas Workers’ Compensation Act can be severable, and the rest of the agreement remains enforceable. An employee signed an arbitration agreement when he was hired. The employee suffered a work-related injury and filed for workers’ compensation. Shortly after returning to work, he was fired and then filed this claim for unlawful retaliatory discharge. The district court granted Poly-America’s motion to compel arbitration, and the employee then filed this writ of mandamus challenging the arbitration agreement. The Court found that provisions in the agreement, specifically those that prohibited punitive damages or reinstatement, undermined the Workers’ Compensation Act and as such, were void as unconscionable. The Court then held that the unconscionable provisions were severable, so the agreement was then otherwise enforceable. City of Waco v. Lopez, 259 S.W.3d 147 (Tex. July 11, 2008) The Texas Commission on Human Rights Act (TCHRA) provides procedures that are the exclusive state statutory remedy for public employees who allege retaliation arising from activities protected by TCHRA. In this Whistleblower Act suit, an employee alleged retaliatory discharge for reporting age and race discrimination in violation of the City’s equal employment opportunity policy. His retaliation claim, however, was not actionable under the Whistleblower Act. The employee did not seek the administrative requirements under TCHRA, and the City filed a plea to the jurisdiction, which the trial court denied. The TCHRA provides the exclusive state statutory remedy for such a retaliatory discharge claim, made by an employee that is covered under TCHRA. This employee was covered, and his retaliation claim is clearly governed by the TCHRA. Though the employee never explicitly pleaded a claim under TCHRA, his internal grievance with the City complaining of age and race discrimination and his related retaliation claim implicated the TCHRA’s anti-retaliation provision. The TCHRA procedures are the exclusive remedy, and time limits had long since passed for the employee to invoke TCHRA procedures. Therefore, the Texas Supreme Court reversed the appellate court’s judgment, and dismissed the case concluding that the employee failed to allege a claim for which the City’s governmental immunity had been waived. Igal v. Brightstar Info. Tech. Group, Inc., __ S.W.3d __, 51 Tex. Sup. J. 840 (Tex. May 2, 2008) When a claimant pursues a wage claim to a final adjudication before the Texas Workforce Commission (TWC), res judicata bars the claimant from later filing a lawsuit for the same damages in a Texas court of law. The Texas Payday Law provides an administrative procedure for a claimant to file a wage claim with the TWC. Igal filed a wage claim with TWC against Brightstar. After various hearings, TWC concluded that Igal’s claim failed on the merits and that TWC lacked jurisdiction, because Igal filed his claim more than 180 days after his wages were due. TWC ordered that after fourteen days, its decision would become final if no party filed a motion for rehearing or sought judicial review. In lieu of filing such a motion, Igal sued Brightstar in Texas district court for breach of contract and declaratory judgment. The Court held that a TWC final adjudication denying recovery of wages precludes the subsequent filing of a common law wage claim for the same wages in state court, because res judicata attaches to a TWC final administrative decision. In re Bazan, 251 S.W.3d 39 (Tex. March 28, 2008) A county officer who has been convicted of a felony shall be removed even when the conviction is based on acts that occurred before the officer’s election. Hidalgo County Constable Bazan was convicted of a third degree felony for theft of property by a public servant. Though Section 87.001 of the Local Government Code, known as “the forgiveness doctrine,” allows for public forgiveness of the misconduct of an elected official, the public’s power to forgive is not without limits. It does not extend to felony convictions, because a convicted felon is not qualified to hold public office, with or without the public’s consent. In reaching its decision, the Court found that Talamantez v. Strauss, 774 S.W.2d 661 (Tex. 1989), which concluded that a county officer could not be removed from office for acts predating the officer’s election under Chapter 87 of the Local Government Code, was wrongly decided. O’Neal v. Ector County Independent Sch. Dist., 251 S.W.3d 50 (Tex. March 28, 2008) Under the Texas Education Code, it is neither permissible, nor necessary, for a teacher to file a breach of contract suit in state court parallel to ongoing administrative remedies regarding a contract dispute in order to avoid a potential limitations bar. O’Neal was a teacher and volleyball coach for Ector County ISD under a two-year contract. The District terminated her coaching contract during the contract’s first year, and she filed a grievance nine days later. Appeals and remands of the administrative procedures extended the grievance procedures for years. Shortly before the fourth anniversary of the administrative proceedings, O’Neal filed a breach of contract action in Ector County in order “to preserve and protect the four-year statute of limitations for such claims.” The Court concluded that jurisdiction for teacher contract disputes is in the administrative process. The administrative process affords the same relief that the teacher sought in the collateral litigation. Therefore, a teacher may not, and need not, file a parallel suit in state court to avoid a potential limitations bar.

WINTER 2009 NEWSLETTER MUNICIPAL LAW UPDATE

admin — Wed, 21 Jan 2009 12:01:52 +0000

by Joshua Skinner

United States Supreme Court

Virginia v. Moore, __ U.S. __, 128 S. Ct. 1598 (April 23, 2008) The Fourth Amendment prohibition on unreasonable searches and seizures does not prevent the police from arresting and searching an individual who the police believe has committed even a minor crime in the presence of the officer. This principle holds true even if state law prohibits the police from arresting someone for the crime in question. The police stopped a car driven by Mr./Mrs. Moore because they had reason to believe that he/she was driving with a suspended license. After confirming that Moore was, in fact, driving with a suspended license, Moore was arrested and searched. During the search, the officers found that Moore was carrying crack cocaine. Moore was prosecuted for having the cocaine, but moved to suppress the evidence of cocaine as fruit of an unlawful arrest in violation of the Fourth Amendment. Moore pointed out that, under Virginia law, the officers should not have arrested him (or searched him) for driving with a suspended license and should only have issued him a citation. On appeal, the Virginia Supreme Court agreed with Moore and held that the police could not conduct a search incident to a citation and therefore the search was improper. The United States Supreme Court reversed. When an officer has probable cause to believe a person has committed a crime, even a minor crime, in his presence, the officer may arrest the individual. That a state might prohibit arrest for the crime in question has no constitutional significance for the Fourth Amendment analysis of the reasonableness of the arrest or any subsequent search. The Fourth Amendment does not prohibit the use of evidence discovered pursuant to such a search in criminal proceedings.

Fifth Circuit

Hinojosa v. Butler, 547 F.3d 285 (5th Cir. October 23, 2008) In regard to municipal liability for failure to train or supervise, the plaintiff must demonstrate a specific failure in the training that resulted in the plaintiff’s injury and cannot rely on general allegations that increased training or supervision would have prevented the injury. Hinojosa brought suit against Butler and the City of San Antonio alleging that Butler, a former San Antonio police officer, used excessive force and that the City was deliberately indifferent by failing to properly train and supervise Butler. The district court granted summary judgment to the City, holding that Hinojosa failed to establish that the alleged injury occurred pursuant to a policy, custom or practice of the City. The Fifth Circuit affirmed the judgment in favor of San Antonio, holding that Hinojosa failed to point to evidence that the police department failed to trains its officers specifically with regard to avoiding the use of excessive force or to the provision of necessary medical care to injured detainees. At best, Hinojosa merely demonstrated that the police department failed to monitor Butler as aggressively as possible. Hampton Co. Nat’l Sur. v. Tunica County, 543 F.3d 221 (5th Cir. September 18, 2008) If a county sheriff has no authority to remove a bail bond company from a list of approved bail bond companies, the sheriff violates a bail bond companies due process rights by removing the bail bond company from the list. The sheriff of Tunica County, Mississippi, removed various bail bond companies from the sheriff’s list of bail bond companies approved to write bail bonds in Tunica County. The district court granted summary judgment to the sheriff based on qualified immunity and to Tunica County because there was no constitutional violation. The Fifth Circuit affirmed dismissal of the sheriff because the law was not clearly established. An earlier Fifth Circuit decision interpreting Mississippi law concluded that bail bond companies do not have an interest protected by the due process clause in being listed on a county sheriff’s list of approved bail bond companies. The Fifth Circuit reversed dismissal of the County, however, because there was on-going litigation in Mississippi state court regarding whether a sheriff has the authority to remove bail bond companies from the approved list. The application of this case to Texas counties is unclear because, for instance, under Texas law sheriffs in non-bail bond board counties are not required to maintain a list of approved bail bond companies nor are they the exclusive determiner of whether a bail bond company may write bail bonds. Ramirez v. Knoulton, 542 F.3d 124 (5th Cir. August 26, 2008) Police reasonably used deadly force against a suspect who was believed to be mentally unstable, was standing holding a firearm and repeatedly refused orders to drop his weapon. Ramirez was under investigation for indecency with a child. While on the phone with the detective investigating him, Ramirez said that he had a gun and would take care of the problem. The detective requested that police go to Ramirez’s home, stating that Ramirez was suicidal and armed. As the officers, including Knoulton, arrived, Ramirez got in his car and left. The police pulled him over and repeatedly asked him to carefully get out of the car. After some time, Ramirez exited the vehicle holding a firearm. The police repeatedly told Ramirez to drop the firearm, but he did not do so. Ramirez brought his hands together and began to raise them. Knoulton shot Ramirez. Ramirez brought suit alleging that Knoulton used excessive force. The magistrate denied Knoulton’s motion for summary judgment based on qualified immunity. Knoulton filed an interlocutory appeal and the Fifth Circuit reversed, holding that the lower court judge was engaging in after-the-fact second-guessing of a difficult and tense situation involving an armed individual who was believed to be mentally unstable and who failed to comply with repeated commands from the police. The Fifth Circuit reversed the decision of the lower court and held that there was no constitutional violation and that Knoulton’s conduct was not objectively unreasonable. Mapes v. Bishop, 541 F.3d 582 (5th Cir. August 22, 2008) The statute of limitations in a Section 1983 claim seeking damages for a false arrest in violation of the Fourth Amendment, where the arrest is followed by criminal proceedings, begins to run at the time the claimant becomes detained pursuant to legal process. The Fifth Circuit recognized that the Supreme Court’s recent decision in Wallace v. Kato, 127 S. Ct. 1091 (2007), abrogates the Fifth Circuit’s decision in Brandley v. Keeshan, 64 F.3d 196 (5th Cir. 1995) (holding that a false arrest cause of action accrues when the criminal prosecution terminates in favor of the accused). Bolton v. City of Dallas, 541 F.3d 545 (5th Cir. August 7, 2008), petition cert. filed, Case No. 07-10999 (November 26, 2008) The actions of a public official do not create municipal liability simply because a public official is the final decision-maker as to an area of administration, such as hiring and firing. The public official must also be a policymaker and the public official is certainly not a policymaker if the public official’s actions conflict with explicit policies expressed in the City’s charter. Chief of Police Bolton was fired by Dallas City Administrator Benavides, who had final and unreviewable discretion to terminate employees of the City. In an earlier appeal, the Fifth Circuit held that Benavides’ termination of Bolton violated the Constitution because the City Charter created a property interest in continued employment, but that Benavides was entitled to qualified immunity. On remand, the district court granted summary judgment to the City because Benavides was not the policymaker for the City in regard to its employment policies. The court pointed to the City Charter provision prohibiting Benavides’ termination of Bolton as proof that Benavides was not a policymaker for the City. The Fifth Circuit affirmed the decision of the district court. Bibbs v. Early, 541 F.3d 267 (5th Cir. August 12, 2008) Prison officials may not retaliate against prisoners for the exercise of their First Amendment free speech rights by subjecting them to four consecutive nights of below-freezing temperatures. Even if the conditions were insufficient to establish an Eighth Amendment claim for cruel and unusual punishment, they were sufficient for a First Amendment retaliation claim. Bibbs was an inmate in the Texas prison system and filed grievances against two jailers. Bibbs alleged that the two jailers and one other jailer retaliated against Bibbs for filing the grievances by turning on “purge fans,” which caused the temperature in Bibbs’ cell to remain below freezing for four consecutive nights. Bibbs alleged that the jailers refused to turn off the fan and stated that the fan would turn off when Bibbs stopped filing grievances. While Bibbs was particularly cold and uncomfortable during the four nights, he did not require medical attention and was able to resolve his flu-like symptoms with over-the-counter medicine. Bibbs brought suit against the jailers alleging First Amendment retaliation. The district court granted judgment to the jailers, holding that Bibbs’ injuries could not state a claim because they were de minimis. The Fifth Circuit reversed, holding that the de minimis standard does not apply to First Amendment retaliation claims. Gates v. Texas Dep’t of Protective and Regulatory Servs., 537 F.3d 404 (5th Cir. July 28, 2008) Social workers were entitled to qualified immunity because it was not clearly established that they could not enter a home without a warrant to interview children merely because of allegations of abuse by their father against one child (who was already in custody) and there was no indication that any other children had suffered from abuse or were in any danger. The Gates had a difficult relationship with their local school district, including disagreements about how to work with one of their adopted children who had serious behavioral problems. The school district made a child abuse report to the Texas Department of Protective and Regulatory Services (TDPRS). TDPRS investigated the report, entering the Gates’ home without consent or a warrant and removing all of the Gates’ children. The children were eventually returned and the Gates’ brought suit. The district court granted summary judgment to the defendants and the plaintiffs appealed. The Fifth Circuit held that the Gates’ had alleged some valid constitutional violations, but that the law was not clearly established as to the valid claims. The Fifth Circuit held that the decision of the TDPRS personnel to enter and remain in the Gates’ home without consent or a court order violated the Fourth Amendment because there was no consent to the entry, no exigent circumstances, and child abuse does not fall within the “special needs” exception to the Fourth Amendment. However, it was unclear at the time of the incident whether the “special needs” would provide a basis for the warrantless entry. The Fifth Circuit also held that the government may not seize a child from his or her parents absent a court order, parental consent, or exigent circumstances. However, in light of the allegations and the testimony gleaned from the other children during their interviews at the home, TDPRS acted reasonably in believing there were exigent circumstances warranting immediate removal of the children. Waltman v. Payne, 535 F.3d 342 (5th Cir. July 10, 2008) A plaintiff’s federal takings claims against a governmental entity is not ripe until (1) the relevant governmental unit has reached a final decision as to what will be done with the property and (2) the plaintiff has sought compensation through whatever adequate procedures the state provides. Where a plaintiff may file a lawsuit in state court, sending a claim letter does not satisfy the requirement that the plaintiff seek compensation through whatever adequate procedures the state provides. Waltman brought suit alleging due process and takings claims against Sheriff Payne, who oversaw a search and confiscation of plants on Waltman’s property that Payne believed were marijuana. The district court dismissed Waltman’s claims. On appeal, the Fifth Circuit affirmed the dismissal of Waltman’s due process claims, but reversed and dismissed for lack of subject matter jurisdiction Waltman’s takings claim. The Fifth Circuit explained that the court did not have jurisdiction over the takings claim because Waltman had made no effort to seek compensation in state court and had merely delivered a demand letter to Payne. Envtl. Cons’n Org. v. City of Dallas, 529 F.3d 519 (5th Cir. May 27, 2008), cert. denied, 129 S. Ct. 418 (October 14, 2008) If a case becomes moot because of a third party, the plaintiff has the burden of proving that there is a realistic prospect that the violations alleged in the plaintiff’s complaint will continue notwithstanding the source of the mootness. A citizen-suit brought by the Environmental Conservation Organization (ECO) against the City of Dallas under the Clean Water Act (CWA) was moot and subject to dismissal when, after the lawsuit was filed, the Environmental Protection Agency (EPA) began investigating the allegations and the City and EPA entered into a court-approved consent decree. Because the intervening change in circumstances resulted from the actions of third-parties, the EPA and the federal court, in order to avoid dismissal for mootness, ECO had the burden of proving that there is a realistic prospect that the violations alleged in its complaint will continue notwithstanding the consent decree. Whitt v. Stephens County, 529 F.3d 278 (5th Cir. May 21, 2008) In the specific context of prison suicide prevention, local governments must provide custodial officials with minimal training to detect obvious medical needs of detainees with known, demonstrable, and serious medical disorders, but a failure to train custodial officials in screening procedures to detect latent suicidal tendencies does not rise to the level of a constitutional violation. Jamie Whitt was booked into the Stephens County Jail. During the book-in process, Whitt stated that he was not suicidal, nor had he been suicidal in the past. However, Whitt also stated that a close relative had recently died. The jail officials failed to follow-up on Whitt’s statement about the death of a close relative and he was placed in general holding. Whitt later died by hanging from a belt and the death was ruled a suicide (there were certain circumstances about the death, however, that caused the court concern as how Whitt came to be hanging in his cell). Whitt’s estate brought suit against the County and the Sheriff on a theory of deliberate indifference. The district court granted summary judgment to the County and Sheriff and the Fifth Circuit affirmed. The Fifth Circuit held that since Whitt did not have obvious medical needs with a known, demonstrable, and serious medical disorder, the defendants were entitled to judgment. It was irrelevant whether the County and the Sheriff had provided appropriate training because Whitt’s symptoms were insufficiently severe to implicate any constitutional right to medical treatment. Lindquist v. City of Pasadena, 525 F.3d 383 (5th Cir. April 15, 2008) Even assuming there is no evidence of vindictive animus, a decision by a municipality as to whether to grant a zoning exemption to a particular landowner or business owner may not be irrational. The Lindquists sought an exemption from location restrictions on used car lots. Various other property owners were given the exemption under what were allegedly similar situations, but the Lindquists request was denied. The Lindquists brought suit against the City and the district court dismissed the case, holding that the claim was for selective enforcement, which the City could not be held liable for absent a showing of vindictive animus. The Fifth Circuit reversed the decision of the district court, holding that decisions regarding whether to grant zoning variances were not types of selective enforcement that required a showing of vindictive animus. Nevertheless, such decisions will be upheld absent a showing by the claimant that the decision was irrational. The burden of proof is on the claimant. Roark & Hardee v. City of Austin, 522 F.3d 533 (5th Cir. March 27, 2008) Bar owners had standing to challenge municipal no-smoking ordinance, despite fact that challenged portions of ordinance had not been enforced against some of them. Ordinance’s requirement that businesses take “necessary steps” to prevent smoking was not unconstitutionally vague. The City of Austin, via a city-wide referendum, enacted a no-smoking ordinance that prohibited smoking in virtually every business establishment and required business owners to take “necessary steps” to prevent smoking at their establishments. The City issued guidelines delineating certain activities that should be considered included under the requirement to take “necessary steps.” Various bar owners brought suit claiming that the ordinance was unconstitutionally vague. The City contended that the bar owners did not have standing because they either had not received citations for violating the “necessary steps” provision or had not received citations beyond the activities specified as “necessary steps” in the ordinance or the City’s guidelines. The district court held that the “necessary steps” provision was unconstitutionally vague. The Fifth Circuit reversed the decision of the district court. The Fifth Circuit concluded that the bar owners had standing because of the threat of prosecution under the ordinance. As to the “necessary steps” provision, however, the Fifth Circuit held that it was not unconstitutionally vague. The ordinance and guidelines were not so indefinite as to provide establishment owners and operators with no standard of conduct at all.

Texas Supreme Court

Texas Dep’t of Transp. v. York, 52 Tex. Sup. J. 175 (December 5, 2008) Loose gravel on a road is not a “special defect” under the Texas Tort Claims Act. As a result, claims against governmental entities relating to loose gravel on a road are subject to the licensee standard: a plaintiff must prove the governmental unit had actual knowledge of a condition that created an unreasonable risk of harm, and also that the licensee did not have actual knowledge of that same condition. York was driving and lost control of her vehicle when it went over loose gravel. The Texas Department of Transportation (TxDOT) had been working on the road, though the source of the loose gravel was disputed. York’s estate brought suit against TxDOT. TxDOT pled governmental immunity except to the extent waived by the Texas Tort Claims Act, which imposes a licensee standard for premises defect cases, but the higher invitee standard for special defects. The trial court put the case to trial under the special defect/invitee standard and the jury found for York’s estate. TxDOT appealed and the court of appeals affirmed the decision of the trial court. The Supreme Court reversed the decisions of the court of appeals and trial court and held that loose gravel on a road is not a “special defect” under the Texas Tort Claims Act. As a result, the lower licensee standard is applicable. Loose gravel is not the sort of obstruction or excavation meant by the phrase “special defect.” FKM P’ship v. Bd. of Regents of the Univ. of Houston Sys., 255 S.W.3d 619 (Tex. June 6, 2008 A trial court hearing a condemnation action retains jurisdiction over the action even if the condemning authority amends its petition and reduces the amount of property sought by a substantial percentage. Moreover, if the condemning authority amends its petition and reduces the amount of property sought by a substantial percentage, the amendment is a functional dismissal of the case and the condemning authority can be held liable for certain fees and expenses. The University of Houston condemned property owned by FKM. After determination of FKM’s damages by special commissioners, the University took possession and FKM appealed to the trial court. While in the trial court, the University amended its pleadings repeatedly, reducing the amount of property sought by 97%. FKM argued that the case should be dismissed because the amendments eliminated the trial court’s jurisdiction. FKM also argued that it was entitled to certain fees and costs because the amendments were functional dismissals. The trial court agreed with FKM and dismissed the case. The University appealed and the court of appeals reversed the decision of the trial court. The Supreme Court held that amendment of pleadings, even such as reduce the amount of property sought, do not deprive the trial court of jurisdiction over the condemnation action. The Court specifically noted that it was not considering a case in which the amount of property was increased. The Court also held that the University’s actions were a functional dismissal entitling FKM to certain fees and costs. City of Dallas v. Reed, 258 S.W.3d 620 (Tex. May 16, 2008) A two-inch difference in elevation between traffic lanes on a roadway does not constitute a “special defect” as a matter of law under the Texas Tort Claims Act. In addition, where the local government does not have actual knowledge of the risk of harm, it cannot be subject to liability under the licensee standard for premises defects. Reed was injured as a result of a motorcycle accident attributable to the fact that there was a two-inch difference in elevation between traffic lanes on the roadway. Reed contended that the two-inch difference was a special defect. The City contended that it was neither a special defect, nor a premises defect of which the City had actual knowledge. The trial court denied the City’s plea to the jurisdiction and the court of appeals affirmed. The Supreme Court reversed the decisions of the trial court and court of appeals and held that the two-inch difference in elevation was not the type of obstruction or excavation intended by the phrase “special defect.” In addition, because there was no evidence that the City had actual knowledge of the defect, it did not qualify as a premises defect and the City was entitled to dismissal of the case. Pruett v. Harris County Bail Bond Bd., 249 S.W.3d 447 (Tex. March 28, 2008) County bail bond boards have the statutory authority to regulate solicitation by bail bond companies, except to the extent specifically prohibited by statute. However, a bail bond board violates the First Amendment free speech rights of bail bond companies if it issues rules restricting unsolicited contact with individuals with outstanding arrest warrants or verbal solicitation of potential bail bond customers during the first twenty-four hours after an arrest. Harris County Bail Bond Board promulgated solicitation rules prohibiting solicitation of bail bond business under certain circumstances. The Texas Supreme Court concluded that the bail bond board had the statutory authority to issue the solicitation rules, but that two of them violated the First Amendment free speech rights of bail bond companies. The Supreme Court concluded that a rule that prohibits unsolicited contact of individuals with outstanding arrest warrants unless the bondsman has an existing business relationship with the individual requiring the bond violated the First Amendment. The Supreme Court also concluded that a rule that prohibits verbal solicitation of potential bail bond customers during the first twenty-four hours after an arrest in the absence of a prior or existing business relationship between the bondsman and the individual requiring a bond violates the First Amendment. Lowenberg v. City of Dallas, 261 S.W.3d 54 (Tex. March 28, 2008) A city imposed fee on commercial buildings for fire protection is an unlawful occupation tax if it covers more than administrative fees. Permitted regulatory fees are not intended to benefit the general public and are limited to the actual administrative costs.

WINTER 2009 NEWSLETTER CIVIL RIGHTS UPDATE

admin — Wed, 21 Jan 2009 12:02:44 +0000

by Francisco Valenzuela

United States Supreme Court

Pearson v. Callahan, 555 U.S. __ (2009). Public officials are entitled to qualified immunity from lawsuits for damages, including punitive damages, when their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known. This defense is important to public officials because the courts’ interpretation of statutory and constitutional rights is constantly changing. The Supreme Court’s decision should make it easier for public officials to receive qualified immunity in certain contexts. Previously, qualified immunity was governed by the Court’s decision in Saucier v. Katz, which mandated a two-step sequence for determining whether a public official was entitled to qualified immunity: first, a court had to decide whether the facts as alleged by the plaintiff made out a violation of a statutory or constitutional right; and second, (assuming satisfaction of the first step) the court had to decide whether that right was clearly established at the time of the defendant’s misconduct. Pearson abolishes the mandatory nature of Saucier’s two-step process. Under Pearson, courts are permitted to decide qualified immunity issues based on the second prong (whether the alleged right was clearly established) without deciding whether there actually was a right. This change resolves some of the disadvantages that courts ran into with Saucier. In particular, the Saucier rule wasted the resources of the courts and the parties, increased the risk of bad decision-making, and prevented certain constitutional decisions from being corrected. Under Pearson, public officials can now argue the relevance of decisions from other courts outside their own circuits when attempting to show that the law was not clearly established. Fitzgerald v. Barnstable Sch. Comm., 555 U.S. __ (2009) The availability of claims pursuant to Title IX, including claims of peer-on-peer sexual harassment, do not preclude an action under 42 U.S.C. § 1983 alleging unconstitutional gender discrimination in schools in violation of the Equal Protection Clause. The Fitzgeralds brought suit against the Barnstable School Committee, the governing body of the Barnstable schools, alleging violations of Title IX and the Equal Protection Clause of the Fourteenth Amendment. The district court dismissed the Equal Protection Clause claim. On appeal the court of appeals affirmed dismissal, holding that Title IX provides a comprehensive, and therefore exclusive, remedy for gender discrimination claims in schools subject to Title IX. The Supreme Court reversed the decision of the court of appeals, holding that Title IX does not preclude constitutional claims brought pursuant to Section 1983 to remedy gender discrimination. Title IX and Section 1983 provide concurrent avenues to seek relief from gender discrimination in educational institutions. Arizona v. Johnson, 555 U.S. __ (2009). In Johnson, the Supreme Court held that, in a traffic stop setting, a police officer can patdown a passenger if the officer has a reasonable suspicion that the passenger is armed and dangerous. In 2002, Johnson was a backseat passenger in a car stopped by police officers when a license plate check revealed that the car’s registration had been suspended for an insurance-related violation. At the time of the stop, the officers did not have any reason to believe that anyone in the car had engaged in criminal activity. During the stop, one of the officers noticed that Johnson kept his eyes on them, and so she approached Johnson and asked him questions. The officer noticed that Johnson wore a gang related bandana and that he had a police scanner in his pocket, which she found suspicious because she believed that people do not often carry scanners unless they are going to engage in criminal activity or evade police. The officer wanted to obtain intelligence about gang activity from Johnson outside of the presence of the passenger in the front seat, so she asked Johnson to get out of the car. Based on her questions and on what she had observed while Johnson was in the car, the officer suspected that Johnson might be carrying a weapon, so she patted him down. As a result of the patdown, she located a firearm, Johnson began to struggle, and the officer placed him in handcuffs. In reaching its decision, the Court relied heavily on its prior precedents. Specifically, the Court noted that it had previously held that officers could stop an individual on a reasonably grounded suspicion that the individual was engaged in criminal activity, and that the officer could also search the individual’s outer clothing on a reasonable suspicion that the individual was armed and dangerous. The Court also previously held that a driver detained for a traffic violation could be asked to exit the car and, further, that the individual could be patted down if the officer reasonably concluded that the driver might be armed and dangerous. Finally, prior precedent also indicated that an officer could ask a vehicle passenger to step out of a vehicle pending the completion of the traffic stop. The Johnson decision simply extends the Court’s jurisprudence to explicitly state that a passenger can not only be asked to step out of a vehicle, but also could be patted down if the officer reasonably suspects the passenger to be armed and dangerous. Van de Kamp v. Goldstein, 555 U.S. __ (2009). In Van de Kamp, the Supreme Court held that prosecutors enjoy absolute immunity from § 1983 claims for failure to train prosecutors, failure to properly supervise prosecutors, and failure to establish an information system containing potential impeachment material about informants. In 1998, Thomas Goldstein sought habeas relief on the basis that his 1980 conviction had depended on the false and unreliable testimony of a jailhouse informant who had previously received reduced sentences for providing prosecutors with favorable testimony. Goldstein claimed that the district attorney’s office knew about the informant’s prior rewards but never disclosed this fact to his attorney, and that this failure to disclose led to Goldstein’s erroneous conviction. Upon release, Goldstein asserted § 1983 claims against the former Los Angeles County district attorney and chief deputy district attorney claiming that the prosecution’s failure to disclose to his attorney the facts about the informant’s prior rewards from prosecutors violated the prosecutor’s constitutional duty to communicate all relevant information to his lawyer. Goldstein alleged that the non-disclosure arose from the defendants’ failure to adequately train and supervise prosecutors, as well as their failure to establish an information system about informants. This case required the Court to examine how immunity applies to prosecutors who are engaged in certain administrative activities. The Court concluded that the prosecutors involved in the supervision, training, and information-system management enjoy absolute immunity from Goldstein’s suit because his claims focused on administrative activity directly connected with the conduct of a trial (i.e. how and when to make impeachment information available at trial). The Court noted that an error in Goldstein’s specific criminal trial constituted an essential element of his claims. The Court also found that the types of activities on which Goldstein focused necessarily required legal knowledge and the exercise of “related discretion” (deciding what information should be included in training, supervision, and information-system management). For these reasons, the defendants were entitled to absolute immunity. District of Columbia v. Heller, __ U.S. __, 128 S. Ct. 2783 (2008). For the first time in the Nation’s history, the United States Supreme Court was asked to decide whether the right to keep and bear arms expressed in the Second Amendment protects the right of individuals to possess firearms, or whether the amendment enshrines a collective right connected to militia service. The Court found that the Second Amendment protects an individual right to possess firearms. The Court explained that there “seems to us no doubt on the basis of both text and history, that the Second Amendment conferred an individual right to keep and bear arms.” The Court also found that the amendment’s drafting history, post-ratification commentary, pre-civil war case law and post-civil war legislation and commentators supported its decision. The types of arms that individuals have a right to possess are those in common use in society. The Court did note that “the right secured by Second Amendment is not unlimited.” The secured right is not “a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose.” The Court further indicated that longstanding prohibitions on the possession of weapons by certain groups or at certain locations, such as schools and government buildings, remain undisturbed by this opinion. While this case does not incorporate the Second Amendment as a limitation against state and local governments, it does declare that the amendment protects an individual right. Legal challenges have already been brought to incorporate the Second Amendment against state and local governments to prohibit them from infringing on this individual right. Crawford v. Marion County Election Board, __ U.S. __, 128 S. Ct. 1610 (2008). In Crawford, the Supreme Court held that an Indiana statute requiring voters to present government issued photo identification when voting did not violate the Fourteenth Amendment. The Indiana statute in question requires voters voting in person at their polling location or at the circuit court clerk’s office to present photo identification. The same statute provides that individuals who do not possess a driver’s license can obtain photo identification for free. Moreover, voters could also complete absentee or provisional ballots and not need to show valid photo identification. Justice Stevens, Chief Justice Roberts, and Justice Kennedy found that the state’s interests in election modernization, preventing voter fraud, and safeguarding voter confidence were sufficiently great to justify the limited burden imposed by the statute’s broad sweep to all Indiana voters. Justices Scalia, Thomas, and Alito concurred in the judgment, but not in Justice Stevens’ opinion because they believe that the case should be decided using a standard developed in prior cases, and not taking into account impacts to any individual specific voters. Indiana v. Edwards, __ U.S. __, 128 S.Ct. 2379 (2008). In Edwards, the Supreme Court held that a state may insist that a criminal defendant who lacks the mental capacity to conduct his own trial be represented by counsel, even though this denies the defendant the right to represent himself. Ahmad Edwards was charged with attempted murder, battery with a deadly weapon, criminal recklessness, and theft. Edwards’ mental condition became the subject of three different competency hearings, during which time Edwards’ competency level fluctuated on numerous occasions. The trial court decided that Edwards was competent to stand trial but not competent enough to represent himself. The Supreme Court held that the Constitution does not prohibit states from limiting Edwards’ right of self-representation in light of its prior precedents, the specific nature of mental illness that allows individuals to be competent to do some things and not others, because allowing an individual to represent himself when he is not competent to do so does not affirm the dignity of the defendant, and because such a proceeding would not appear to be fair. Rothgery v. Gillespie County, Texas, __ U.S. __, 128 S.Ct. 2578 (2008). In Rothgery, the Court held that a criminal defendant’s initial appearance before a judicial officer, during which he learns the charges against him and his liberty is subject to restriction, marks the start of adversary judicial proceedings that trigger attachment of the Sixth Amendment right to counsel. Rothgery was arrested on incorrect information and brought before a magistrate who set bail. After posting bail, Rothgery made numerous requests for counsel which went unheeded. Six months later, Rothgery was formally indicted and re-arrested, at which point counsel was appointed. The court of appeals held that the Sixth Amendment did not require the presence of counsel during the first hearing Rothgery was subject to before a magistrate because no prosecutor was present. The Supreme Court reversed the court of appeals’ decision and held that it was insignificant whether the prosecutor was present because an accusation filed with a judicial officer is sufficiently formal and the government’s commitment to prosecute concrete, when the accusation prompts arraignment and restrictions on an accused’s liberty to facilitate prosecution. For that reason, Rothgery’s right to counsel was triggered by his first hearing before the magistrate. Kennedy v. Louisiana, __ U.S. __, 128 S. Ct. 2641 (2008). In Kennedy, the Court held that the Eighth Amendment prohibits the death penalty for crimes against individuals in which the victim’s life is not taken. Kennedy was arrested and convicted of the brutal rape of his eight year old step-daughter. In Louisiana, the rape of a child was an offense for which the death penalty could be imposed. The Louisiana courts uniformly upheld Kennedy’s death penalty sentence, drawing distinctions with prior Supreme Court precedents. The Supreme Court reversed the decisions of the Louisiana courts. The Eighth Amendment’s prohibition against cruel and unusual punishment derives from the precept that punishment for a crime should be graduated and proportional to the crime, and that the appropriate standards to be employed are those “evolving standards of decency that mark the progress of a maturing society.” The Court studied the history of the death penalty for child rape, state statutes, the number of executions by states, and other factors, and concluded that there is a “national consensus” against imposition of the death penalty for the rape of a child. Employing its own judgment, the Court found that the death penalty would be excessive for non-homicide crimes against individuals, and that there was a necessity to “constrain the use of the death penalty.” The Court also found that its decision was consistent with justifications offered for the death penalty, noted that requiring a child-victim to testify in a process in which the death of the perpetrator was sought “forces a moral choice on the child”, and examined various other policy considerations which it believed supported its conclusion that the death penalty is not a proportional punishment for the rape of a child Baze v. Rees, __ U.S. __, 128 S. Ct. 1520 (2008). In Baze, the Supreme Court decided that Kentucky’s process for executing inmates by lethal injection does not constitute cruel and unusual punishment in violation of the Eighth Amendment. In this case, two inmates brought a claim arguing that Kentucky’s method of administering lethal injections was cruel and unusual punishment because of the risk that the process might not be properly followed, resulting in significant pain. The inmates conceded, however, that the process, if applied as intended, did not constitute cruel and unusual punishment. In Kentucky, inmates executed by lethal injection receive three drugs: the first, sedates the inmate; the second, causes paralysis and ceases respiration; and the third, causes cardiac arrest. The inmates were concerned that the sedative would not be properly administered and would, therefore, cause the inmate severe pain due to paralysis and cardiac arrest. In reaching its decision, the Court noted that in order to prevail on a claim asserting risk of future harm, the harm must be sure or very likely to cause needless suffering and give rise to imminent dangers, and that the risk must be an objectively intolerable substantial risk of serious harm that prevents prison officials from claiming that they were subjectively blameless of cruel and unusual punishment. An isolated mishap in the administration of the death sentence does not violate the Eighth Amendment, and a prisoner cannot challenge a state’s method of execution by showing “a slightly or marginally safer alternative.” The alternative procedure must be feasible, readily implemented, and significantly reduce a substantial risk of severe pain. If a state were to refuse to implement the alternative, without a legitimate penological reason justification, then that refusal could be viewed as cruel and unusual punishment under the Eighth Amendment. As part of its decision, the Court also noted the broad national consensus in using the three-drug cocktail for administering lethal injections, and the safeguards put in place by Kentucky to help ensure that the proper process was followed. United States v. Williams, __ U.S. __, 128 S. Ct. 1830 (2008). In Williams, the Supreme Court held that the Prosecutorial Remedies and Other Tools to end the Exploitation of Children Today Act of 2003 (the “Act”), criminalizing the pandering or solicitation of child pornography, is not overbroad under the First Amendment and is not impermissibly vague under the Due Process Clause of the Fifth Amendment. Williams was charged with the pandering and possession of child pornography. Williams posted seven photographs of minors engaged in sexually explicit conduct and displaying their genitals in an internet chat room. Williams’ computer was later found to have at least twenty-two images of children engaged in sexually explicit conduct. Beginning with the analysis of the Act under the First Amendment, the Court explained that the Act would be overbroad if it prohibits a substantial amount of protected speech. The Court noted that the Act prohibits knowingly offering to provide and requesting child pornography, and noted that the Act does not require the actual existence of child pornography, though actual children must be displayed. The Court noted that offers to “engage in illegal transactions are categorically excluded from First Amendment protection”, as are offers “to give or receive what it is unlawful to possess.” For these reasons, the Court found that offers to provide, or requests to obtain, child pornography are categorically excluded from First Amendment protections. In regards to the claim that the Act was impermissibly vague, the Court noted that statutes can be impermissibly vague if they fail to provide persons of ordinary intelligence “fair notice” of what conduct is prohibited or so standardless so as to authorize discriminatory enforcement. After reviewing the Act, the Court found that the Act was not impermissibly vague, but instead that its prohibitions were clear and specific. Richlin Security Service Company v. Chertoff, __ U.S. __, 128 S. Ct. 2007 (2008). In Richlin, the Supreme Court held that a prevailing party in a case brought under the Equal Access to Justice Act (EAJA) by or against the federal government can recover fees for paralegal services at the market rate for those services. Richlin contracted with the Immigration and Naturalization Services to guard detainees at the Los Angeles International Airport. Through a mutual contractual mistake, Richlin’s employees were misclassified and the Department of Labor ordered Richlin to pay its employees back wages. Richlin filed an administrative action requesting reformation of its contracts to require the government to compensate it for the back wages, and Richlin eventually won. After its victory, Richlin requested, among its fees and expenses, amounts for paralegal work. The agency, and later the Federal Circuit, denied that Richlin was entitled to recover the actual paralegal costs it incurred in payments to its law firm, but instead could only recover amounts reflecting the actual cost to the law firm for the paralegal work. The Supreme Court reviewed the language of the EAJA and found it to be clear that paralegal fees are to be paid at the market rate, or, in other words, at the rate a firm charges the client. The Court also found that its precedents, the EAJA’s legislative history, and policy considerations all supported its reading of the EAJA’s text.

Fifth Circuit

Dearmore v. City of Garland, 519 F.3d 517 (5th Cir. 2008). In Dearmore, the Fifth Circuit held that a plaintiff is a “prevailing party” under 42 U.S.C. § 1988(b) if he wins a preliminary injunction based upon an unambiguous indication of probable success on the merits that causes the defendant to moot the lawsuit, thereby preventing the plaintiff from obtaining final relief on the merits of his claims. In this case, Dearmore challenged a City of Garland ordinance relating to the maintenance of rental properties, ultimately on the grounds that it violated the Fourth and Fourteenth Amendments. The district court granted a preliminary injunction enjoining the city from enforcing a portion of its ordinance, and specifically noted that insofar as the ordinance allowed certain specified conduct, it violated the Fourth Amendment. That same day, the city’s counsel informed Dearmore’s counsel that there was no need to post the required bond for the injunction because the city planned to amend the ordinance to address the court’s concerns. The city amended the ordinance, and the court entered a final judgment dismissing the case as moot and listed Dearmore as a prevailing party. The question whether a plaintiff like Dearmore was a prevailing party under § 1988 had been undecided in this Circuit until this case. Because of Dearmore, the law in the Fifth Circuit is now that, in order to be considered a prevailing party when there is no final decision on the merits, “the plaintiff (1) must win a preliminary injunction, (2) based upon an unambiguous indication of probable success on the merits of the plaintiff’s claims as opposed to a mere balancing of the equities in favor of the plaintiff, (3) that causes the defendant to moot the action, which prevents the plaintiff from obtaining final relief on the merits.” The court specifically indicated that Dearmore would not be a prevailing party under § 1988 had the city amended its ordinance prior to the granting of the preliminary injunction, but found that the city amended its ordinance after the injunction and in direct response to it. Meza v. Livingston, 537 F.3d 364 (5th Cir. 2008). In Meza, the Fifth Circuit held that it did not have jurisdiction over an interlocutory appeal by defendants because the district court judge had not refused to rule on the defense of Eleventh Amendment immunity. In this case, Meza, an inmate, sued various state officials alleging Fourteenth Amendment violations against state and local officials. The defendants filed a motion to dismiss Meza’s claims on the basis of Eleventh Amendment immunity, and the court ultimately dismissed the monetary claims but did not dismiss the claims for injunctive relief. The defendants did not appeal this ruling. Meza later filed an amended complaint, and the defendants eventually filed a joint motion for summary judgment, which was directed to the Magistrate for resolution. At the time of the court’s final pretrial hearing, the immunity issues remained “under advisement”, and the defendants appealed arguing that the district court had failed to rule on the immunity issue. The Fifth Circuit held that it lacked jurisdiction to hear the appeal because the district court had not refused to rule on the immunity question but instead had asked a magistrate judge for his recommendation, the motion had not been denied but was simply “under advisement”, and because the district court had previously denied the defendants’ immunity defense, a decision that was never appealed. United States of America v. Muniz, 540 F.3d 310 (5th Cir. 2008). In Muniz, the Fifth Circuit held that it lacked appellate jurisdiction over interlocutory appeals by landowners in a condemnation proceeding. In this case, the government sought a temporary easement to enter the landowners’ property to make necessary studies and preparations for a planned border fence. The district court issued possession orders granting a temporary easement, but did not determine the amount of compensation to be paid by the government to the landowners. The Fifth Circuit held that a condemnation proceeding is not reviewable until a final judgment disposing of the whole case is entered, and noted specifically that the landowners will have adequate opportunity for appellate review. Archer v. Nissan Motor Acceptance Corporation, 550 F.3d 506 (5th Cir. 2008). In Archer, the Fifth Circuit held that the running of the two year statute of limitations period under the Equal Credit Opportunity Act (“ECOA”) begins with the actual violation in question, not from the moment that the violation is discovered. The plaintiffs in Archer received dealer financing from Nissan dealerships, which in turn assigned the loans to the Nissan Motor Acceptance Corporation (“NMAC”). The dealers would send NMAC customer financing applications and NMAC would determine the rate at which they would agree to buy the loan. The dealer was then free to mark up the loan as much as they wanted and keep everything over NMAC’s indicated buy rate. The plaintiffs allege that the subjective dealer markup was higher for African American customers and that NMAC violated the ECOA by purchasing the dealer loans. The plaintiffs brought suit more than six years after the financing transactions. The Fifth Circuit analyzed the language of the ECOA and found it to be clear that the statute’s two year limitations period runs from the date of the alleged violation, not from the date a plaintiff discovers that a violation took place. For completeness, the court also looked at the ECOA’s legislative history and Supreme Court precedents, both of which it found supportive of its holding. Walker v. Epps, 550 F.3d 407 (5th Cir. 2008). In Walker, the Fifth Circuit held that statutes of limitations apply to method-of-execution cases brought under § 1983, even when the relief sought is equitable, and that the cause of action accrues for these types of claims on the later of either the date when direct review of an individual case is complete or the date on which the challenged method of execution was adopted. In Walker, the inmate plaintiffs were sentenced to death for their crimes. They filed a § 1983 civil rights case for equitable relief arguing, not that the state could not execute them, but that the method of execution (lethal injection) was unconstitutional under the Eighth Amendment. The state of Mississippi argued that the inmates’ claims were barred by the three year (in Mississippi) statute of limitations for § 1983 claims. The district court agreed with the state and held that the three year statute of limitation began to run on the later of the two following dates: the date direct review of their individuals criminal cases was complete or the date when Mississippi’s lethal injection statute became effective. Based on this understanding, the district court found that the inmates’ claims expired between 2001 and 2002. The Fifth Circuit upheld the district court’s decision by looking to Supreme Court precedent which it understood as mandating that all § 1983 actions are subject to statutes of limitations, and found that no exceptions were made by the Supreme Court for the application of the laches doctrine in regards to § 1983 cases seeking only equitable relief. The court then analyzed when method-of-execution causes of actions accrue, thereby starting the clock for purposes of the statute of limitations. The limitations period begins, the court found, when the plaintiff becomes aware that he has suffered an injury or has sufficient information to know that he has been injured. The Fifth Circuit agreed with the district court and held that method-of-execution cases should be filed after a plaintiff’s conviction and sentence become final on direct review, though it also stated that if the state’s death penalty protocol changes after an inmate’s direct review has become final, that the statute of limitations would necessarily accrue when the new protocol becomes effective. Interestingly, the Fifth Circuit decided that the doctrine of continuing torts did not apply to this situation because the plaintiffs were individually subject to the death penalty, which is a single event. In other words, the method of execution will affect the inmate only once and, therefore, would not be a continuing event. Samnorwood Indep. Sch. Dist. v. Tex. Educ. Agency, 533 F.3d 258 (5th Cir. 2008). In Samnorwood, the Fifth Circuit held that the prophylactic order of a federal court which sought to remedy the segregative conduct of the Texas Education Agency (“TEA”) and all-black schools in East Texas, or the TEA’s regulations enforcing the order, should not be imposed on two panhandle districts that had desegregated voluntarily prior to the court’s order and which have never been found to have acted with segregative intent since their voluntary desegregation. In 1970, the United States brought suit against specific Texas school districts and the TEA in order to achieve school desegregation (United States v. Texas). The defendant school districts in that case ran dual school systems and the TEA aided them by funding the segregated school districts. The court entered an order that has governed aspects of public education throughout Texas since that time. The two schools districts at issue in this case, Samnorwood and Harrold, are two rural school districts in the Texas panhandle and each have single campuses. Both school districts voluntarily desegregated in 1963 and 1965 respectively, and neither have been found to have acted with segregative intent in accepting transfer students or in any other manner since they desegregated. In addition, both Samnorwood and Harrold rely heavily on transfer students for their financial viability (monies received from the TEA based on number of students), but the transfer students are accepted regardless of their race or ethnicity. In order for the TEA to comply with the order of the court in United States v. Texas, the TEA requires each school district throughout the state to inform it when it receives a transfer student. Upon receipt by the TEA, a calculation is made as to whether a transfer has a segregative effect and, if so, the transfer is deemed ineligible. The TEA also requires school districts to submit annual reports regarding their students. If a school accepts an ineligible transfer student, the school loses funding for the next year for each day that student attends the school. Similarly, if a school district fails to inform the TEA of a transfer, the TEA treats that transfer as ineligible and the district loses funding. If the district remains in violation, the TEA’s sanctions escalate. In the present case, Samnorwood transferred one ineligible student and also was accused of not reporting three transfers to the TEA, and Harrold was accused of failing to notify the TEA of seventeen transfers. The TEA informed both districts that they would lose funding for the following year. The Fifth Circuit found that these two districts were not parties to United States v. Texas, would not have been subject to the order to desegregate had they been part of that case because they had already desegregated prior the case’s filing, and that neither of these Districts have been shown to engage in segregative conduct at any time after they voluntarily desegregated. For these reasons, these districts are not be considered to be under the desegregation order imposed against other districts and the TEA or the TEA’s regulations promulgated to enforce the order’s provisions.

Texas Supreme Court

Davis v. Fisk Elec. Co., 268 S.W.3d 508 (Tex. 2008). In Davis, the Texas Supreme Court held that a lawyer who used five of his six peremptory challenges to strike African American venire members (prospective jurors) and the sixth to strike another minority venire member acted in violation of the U.S. Supreme Court’s decision in Batson v. Kentucky. Donald Davis brought a civil rights claim against Fisk Electric Company. The lawyer for Fisk used peremptory strikes for five African American venire members and the sixth challenge for another minority venire member. Counsel for Davis objected on the basis that the objections were based on the venire members’ race, but the objections were overruled. In reaching its decision, the Texas Supreme Court noted the statistical disparity in the striking of African American venire members with peremptory challenges as opposed to non-minority venire members, in this case 83%. The court also engaged in comparative juror analysis to study Fisk’s counsel’s behavior in what questions and types of questions were asked of African American and non-African American venire members, as well as the justifications for striking African American venire members while not striking non-African American venire members. The court noted that Batson requires clear and reasonably specific explanations for the legitimate reasons for striking a juror, and that these reasons should be reflected in the record. The court found that such explanations were not provided in this case and that none could be found in the record. The court held that courts must consider all relevant circumstances when reviewing a party’s Batson challenges.

WINTER 2009 NEWSLETTER TEXAS SUPREME COURT INSURANCE LAW UPDATE

admin — Wed, 21 Jan 2009 12:04:39 +0000

by Leslie Echols Pitts and Rebecca Raper

RECENT OPINIONS

U.S. Fidelity & Guara. Co. v. Goudeau, 52 Tex. Sup. J. 216 (Tex. Dec. 19, 2008). Underinsured motorist coverage does not apply where claimant was struck by underinsured motorist after exiting the insured vehicle. In Goudeau, a man sought coverage under his employer’s underinsured motorist coverage after being struck by a passing car and pinned against his employer’s vehicle. The underinsured motorist coverage applied only if the motorist was “occupying” his car at the time of the accident. The motorist conceded that he was not “in” his car when the accident occurred, and he was not in the process of getting in, on, out, or, off of it. The Supreme Court determined that under the policy, the motorist was therefore not “occupying” the insured car and not entitled to coverage under the underinsured motorist coverage. Don’s Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20 (Tex. Aug. 29, 2008). The “actual injury” or “injury-in-fact” trigger of coverage applies in latent injury property damage cases under standard occurrence-based liability policies requiring the complained of damage or injury to occur during the relevant policy period. On certified question, the Court was asked to clarify the trigger issue by answering: (1) “When not specified by the relevant policy, what is the proper rule under Texas law for determining the time at which property damage occurs for purposes of an occurrence-based commercial general liability insurance policy?” and (2) “If the proper rule requires that property damage manifest before it is deemed to have occurred: when the pleadings in underlying lawsuits against an insured allege actual damage that began and worsened during the relevant policy period but that remained undiscoverable and not readily apparent for purposes of the discovery rule until after the policy period ended because the internal damage was hidden from view by an undamaged exterior surface, did that damage manifest, and thus occur, during the policy period?” Answering “yes” to both, the Court adopted an “actual injury” or “injury-in-fact” trigger of coverage under the specific policy language before it, declining to adopt a “universally applicable” rule under all contracts, holding that under such language Texas insurers “must defend any claim of physical property damage that occurred during the policy term.” Because coverage under the policy involved is not conditioned on the “identifiability” of an injury or damage, the Court found allegations that the underlying plaintiffs had suffered property damage during the policy period sufficient to trigger the carrier’s duty to defend whether or not that damage was actually discovered or discoverable during that period. The Texas Supreme Court denied rehearing in the case on November 14, 2009. Ulico Cas. Co. v. Allied Pilots Ass'n., 262 S.W.3d 773 (Tex. Aug. 29, 2008). If an insurer defends its insured when no coverage for the risk exists, the insurer's policy is not expanded to cover the risk simply because the insurer assumes control of the defense. But, if the insurer's actions prejudice the insured, the lack of coverage does not preclude the insured from asserting an estoppel theory to recover for any damages it sustains because of the insurer's actions. Zurich Am. Ins. Co. v. Nokia, Inc.268 S.W.3d 487 (Tex. August 29, 2008); Fed. Ins. Co. v. Samsung Elecs. Am., 268 S.W.3d 506 (Tex. August 29, 2008); Trinity Universal Ins. Co. v. Cellular One Group, 268 S.W.3d 505 (Tex. Aug. 29, 2008). , Texas’s “complaint allegation” or “eight corners” rule was applied for defense purposes to find damages sought for alleged (1) biological injuries or effects and/or (2) adverse cellular reaction or dysfunction related to cell phone use states a potential claim for “damages because of ‘bodily injury,’” as to the duty to defend, as contemplated under most standard commercial general liability policies. Evanston Ins. Company v. Atofina Petrochemicals, Inc., 51 Tex. Sup. Ct. J. 1018 (Tex. June 13, 2008). (1) The language of the additional insured endorsement and not the agreement between the insured and additional insured determine the extent of coverage afforded to the additional insured; (2) A carrier who opts to forego involvement in settlement negotiations also gives up the right to challenge the product of those negotiations; and (3) The “Prompt Payment of Claims” statute does not apply to indemnity obligations in the context of a liability policy. With regards to the additional insured question before it, the Evanston Court determined that the language of the additional insured endorsement controlled. In particular, while the contract between the named insured and the additional insured did not require the named insured to indemnify the additional insured for the additional insured’s own sole negligence, the additional insured endorsement in the policy did not reflect any “sole negligence” limitations. Accordingly, the additional insured was insured for all purposes under the relevant policy. With regards to whether an insurer can challenge the reasonableness of a settlement after that insurer wrongfully denied coverage, the Evanston Court unequivocally found that the insurer before it lost the ability to challenge the reasonableness of the amount of the settlement. In particular, the Evanston Court explained that a carrier who opts to forego involvement in settlement negotiations also gives up the right to challenge the product of those negotiations. Finally, the Evanston Court examined whether the Texas “Prompt Payment of Claims” statute and its 18% penalty applied to the $5.75 million in covered indemnity obligations. The Court held that such costs were classic “third party” damages not covered by the relevant statute, which applies only to first-party costs, which has previously been interpreted to be “the insured’s own loss.” Texas Mutual Ins. Co. v. Ledbetter, 251 S.W.3d 31 (Tex. April 4, 2008). Because the Workers’ Compensation statute guarantees insurers first money recovery from tortfeasors, it is reversible error for a trial court with notice of a workers’ compensation carrier’s claim to approve a settlement that does not include the carrier. The trial court erred in approving a $4.5 million settlement where the deceased workers’ family and attorney recovered but the workers’ compensation carrier got nothing because the first-money rule is mandatory and based on solid public policy principles: “[f]irst-money reimbursement is crucial to the worker’s compensation system because it reduces costs for carriers (and thus employers, and thus the public) and prevents double recovery by workers.” Unauthorized Practice of Law Committee v. American Home Assurance Co., Inc., 51 Tex. Sup. Ct. J. 590 (Tex. March 28, 2008). An insurer may use captive counsel or staff attorneys to defend a claim against an insured if the insurer’s interest and the insured’s interest are congruent and if the affiliation is fully disclosed to the insured. In reaching this decision, the Court recognized that: “Liability insurance policies commonly provide that the insurer must indemnify the insured from liability for covered claims and give the insurer the duty, and also the right, to defend such claims. The right to defend in many policies gives the insurer complete, exclusive control of the defense. Insurance companies retain attorneys in private practice to represent insureds in defending claims against them, but for decades, in Texas and other states, insurers have also used staff attorneys – salaried company employees – to save costs.” The Texas Supreme Court denied rehearing in the case on September 26, 2008. Nationwide Insurance Co. v. Elchehimi, 249 S.W.3d 430 (Tex. March 28, 2008). For purposes of a UM policy, a collision between the covered vehicle and an axle-wheel assembly separated from an unidentified semi-trailer truck did not involve the requisite “actual physical contact” with a “motor vehicle” to invoke coverage. In Elchemimi, the insured claimants sought coverage under the UM portion of their personal auto policy after their vehicle was struck by an axle-wheel assembly and attached tandem wheels that separated from a semi-trailer. The semi-trailer did not stop. The court determined that for purposes of the UM statute and related coverage, the axle-wheel assembly did not constitute a “motor vehicle” National Union Fire Insurance Company v. Crocker, 246 S.W.3d 603 (Tex. Feb. 15, 2008). There is no duty to provide a defense absent a request for coverage. In Crocker, the Texas Supreme Court was asked to answer certified questions from the Fifth Circuit Court of Appeals regarding a carrier’s obligations when it knows that one who qualifies as an insured under its policy has been sued and served but has not requested a defense. The Court held that the purpose of the “delivery-of-suit-papers provisions in insurance policies” is twofold: (1) to facilitate a timely and effective defense of the claim and (2) to trigger the insurer’s duty to defend. The Court went on to say that mere awareness by the carrier that an additional insured has been sued and/or served does not trigger a defense obligation, that “there is no unilateral duty to act unless and until the additional insured first requests a defense.” Finally, the Court explained that the carrier had no duty to notify the additional insured of coverage, though doing so may be wise from a business perspective. The Texas Supreme Court denied rehearing in the case on April 4, 2008. Fairfield Insurance Company v. Stephens Martin Paving, LP., 246 S.W.3d 653 (Tex. Feb. 15, 2008). There is no public-policy prohibition for coverage for a punitive damages award based on a gross negligence finding in the context of a workers’ compensation claim. Noting that the policy form before it was promulgated by the Texas Department of Insurance and is the only form approved to comply with the Texas Workers’ Compensation statute, the Court determined that the statutory scheme and TDI’s promulgation of that form “reveal an intent to provide additional insurance coverage – coverage for an employer’s gross negligence.” The court further concluded that the “Legislature’s expressed intent is that Texas public policy does not prohibit insurance coverage for claims of gross negligence in this context.” Having determined that there is no public-policy prohibition for coverage for a punitive damages award based on a gross negligence finding in the context of workers’ compensations claims, the Court turned to the broader question of coverage for punitive damages outside the context of the policy before it. The Fairfield Court engaged in a thorough review of other jurisdictions’ views on the question, then outlined a potential tension between the public policy favoring the preservation of the freedom to contract and the underlying purpose of punitive damages, i.e., to punish the wrongdoer. After a very lengthy discussion of considerations it deemed critical to the question, the Fairfield Court refused to make a bright-line finding, suggesting instead that the public policy questions must be weighed as to the particular circumstances of each claim. Excess Underwriters at Lloyds v. Frank’s Casing Crew & Rental Tools, Inc., 246 S.W.3d 42 (Tex. Feb. 15, 2008). In a complete reversal of its earlier opinion in the case, the Frank’s Casing Court held that an insurer has no right to seek reimbursement from an insured if the insurer later prevails in a coverage suit unless the insured has specifically agreed to reimbursement in those circumstances. When initially decided, the Frank’s Casing decision stood for the proposition that an insurer can seek reimbursement from an insured of settlement dollars paid, at least in certain situations. In particular, the original opinion held that a carrier has a right to be reimbursed if it has: (1) timely asserted its reservation of rights; (2) notified the insured it intends to seek reimbursement; and, (3) paid to settle claims that were not covered. The Court ruled that once an insured asserts that a settlement offer has triggered a Stowers duty, and the insurer accepts the settlement offer or a lower one, the insured is estopped from asserting that the settlement is too much of a financial burden for the insured to bear if it turns out that the claim is not covered. On rehearing, the Court reversed its position, holding that an insurer has no right to seek reimbursement from an insured if the insurer later prevails in a coverage suit unless the insured has specifically agreed to reimbursement in those circumstances. The new Frank’s Casing decisions affirms a previous Texas Supreme Court case involving an insurer’s reimbursement rights, Texas Association of Counties County Government Risk Management Pool v. Matagorda County, 52 S.W.2d 128 (Tex. 2000). In Matagorda County, the Texas Supreme Court held that an insurer could seek reimbursement from its insured only if the insured clearly and unequivocally consented to both the settlement and the insurer’s right to seek reimbursement. In the new Frank’s Casing decision, the Court declined to overrule or create an exception to Matagorda County.

CASES TO WATCH

Johnson v. State Farm Lloyds, 204 S.W.3d 897, 2006 Tex. App. Lexis 9336 (Tex. App. Dallas 2006), pet. granted, Sept. 28, 2007. On appeal from the Fifth District Dallas Court of Appeals:

Whether an appraiser selected under the appraisal clause of a homeowners’ policy has the authority to decide questions of causation or merely the dollar amount of the claimed damages?

The case was argued and submitted to the Court on February 7, 2008. Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 2006 Tex. App. Lexis 5950 (Tex. App. Houston [14th Dist.] July 6, 2006), pet. granted, Aug. 31, 2007. On appeal from the Fourteenth Houston District Court of Appeals:

Whether extrinsic evidence is admissible to establish a duty to defend when the plaintiff's petition is silent on a particular coverage issue?

The case was argued and submitted to the Court on January 15, 2008. Union Ins. Co. v. Don's Bldg. Supply, L.P., 266 S.W.3d 592 (Tex. App. – Dallas Sept. 23, 2008), pet. filed, Nov. 11, 2008. Petition for Review sought:

Whether manifestation is the property trigger of coverage in latent property damage cases:
Whether covered “property damage” exists where the plaintiff homeowners purchased the home years after an insurer’s policies expired.

A response to the petition for review was requested by the Court on January 13, 2009, and filed on February 3, 2009.

WINTER 2009 NEWSLETTER PRODUCTS LIABILITY UPDATE

admin — Wed, 21 Jan 2009 12:05:58 +0000

by Rocky Little

1. Ansell Healthcare Prods., Inc. v. Owens & Minor, Inc., 251 S.W.3d 499 (Tex. 2008). This case concerns the duty imposed on manufacturers of allegedly defective products to defend and indemnify innocent sellers under §82.002 of the Texas Civil Practice & Remedies Code. The main issue is, when a distributor that is sued in a products liability action seeks indemnification from less than all of the manufacturers, does a manufacturer fulfill its obligation by offering indemnification and defense for only the portion of the distributor’s defense concerning the sale of that specific manufacturer’s product, or must the manufacturer indemnify and defend the distributor against all claims, and then seek contribution from the remaining manufacturers? The facts underlying this product liability case are based on a latex glove allergy. Owens & Minor was a distributor of gloves made by numerous manufacturers. The Supreme Court of Texas held that a manufacturer is required to indemnify and hold harmless an innocent seller only for the portion of the defense associated with its own products, and not for the products made by other manufacturers. 2. Ackermann v. Wyeth Pharms., 526 F.3d 203 (5th Cir. 2008). Rozlyn Ackermann alleged that Wyeth Pharmaceuticals failed to adequately warn about the drug-induced risk of suicide from its drug Effexor, and that this failure to warn led to her husband’s suicide. The case examines the Learned-Intermediary Doctrine, which is not an affirmative defense, but rather a common law doctrine. When the manufacturer’s warning to the intermediary (i.e., doctor) is inadequate or misleading, the manufacturer remains liable for injuries sustained by the ultimate user. To recover for failure to warn under this doctrine, a Plaintiff must show that (1) the warning was defective, and (2) the failure to warn was a producing cause of the injury. In other words, under Texas law, a Plaintiff who complains that a prescription drug warning is inadequate must also show that the alleged inadequacy caused the doctor to prescribe the drug. However, if the physician was aware of the risk involved in the use of the product but decided to use it anyway, the adequacy of the warning is not a producing cause of the injury. Even if the physician is not aware of a risk, the Plaintiff must show that a proper warning would have changed the decision of the treating physician, i.e., that but for the inadequate warning, the treating physician would not have prescribed the product. In this case, Dr. Sonn, affirmed that he would have prescribed Effexor to Mr. Ackermann regardless of whether he had received the proposed stronger warning. Therefore, Plaintiff’s claim was denied because there was no showing that an inadequate warning was a producing cause of her husband’s death. 3. Bic Pen Corp. v. Carter, 251 S.W.3d 500 (Tex. 2008). Six-year-old Brittany Carter was severely burned when her five-year-old brother, Jonas, accidentally set fire to her dress with a J-26 Model Bic lighter. Brittany’s mother sued Bic Pen Corporation claiming that Brittany’s injuries resulted from design defects, among other things, in the J-26 lighter. The J-26 lighter is subject to federal standards for child-proof lighters and must be certified as compliant by the Consumer Product Safety Commission (“Commission”). The Commission is an independent regulatory commission created under the Consumer Product Safety Act of 1972, and is charged with protecting the public against unreasonable risks of injury associated with consumer products, and developing uniform safety standards for consumer products, among other things. The Consumer Product Safety Commission has adopted regulations requiring disposable lighters to be child-resistant, and setting a protocol for testing a lighter’s child resistance. The J-26 lighter underwent qualification testing in 1994, and the Commission issued a certificate of compliance. The issue in this case is whether common law claims brought pursuant to state law are preempted by federal standards set by the Consumer Product Safety Commission. In other words, if a product is properly certified pursuant to federal standards and federal protocol testing, does that conclusively determine that there was no design defect? The Supreme Court of Texas concluded that the design defect claim brought pursuant to common law is preempted by federal law, and compliance with the federal standard nullifies the state law design defect claim. 4. Riegel v. Medtronic, Inc., 128 S.Ct. 999 (2008). The product at issue in this case is a Medtronic balloon catheter which ruptured during coronary angioplasty necessitating an emergency bypass. The plaintiff sued under New York law, and Medronic claimed that federal law preempted the New York common law claims. The Medical Device Amendments of 1976 (“MDA”) created a scheme of federal safety oversight for medical devices which swept back state oversight schemes. The MDA calls for federal oversight of medical devices that varies with the type of device at issue. The most extensive oversight is reserved for Class 3 devices, including the Medronic balloon catheter, that undergo the pre-market approval process. These devices may enter the market only if the FDA reviews their design, labeling, and manufacturing specifications, and determines that those specifications provide a reasonable assurance of safety and effectiveness. Manufacturers may not make changes to such devices that would affect safety or effectiveness unless they first seek and obtain permission from the FDA. In this case, the United States Supreme Court held that federal law preempted state law and that the Medical Device Amendments of 1976 barred state common law tort claims challenging the safety and effectiveness of the Medtronic balloon catheter which had been given pre-market approval by the Food and Drug Administration. 5. New Texas Auto Auction v. Hernandez, 249 S.W.3d 400 (Tex. 2008). The issue in this case is whether an auctioneer is a “seller” pursuant to products liability law, and therefore whether an auctioneer can be held strictly liable for selling a defective product. The Supreme Court of Texas held that auctioneers are usually neither buyers nor sellers, but agents for both. While they are obviously engaged in sales, the only thing they sell for their own account is their services; and the items they auction are generally sold for others. The court noted that product-liability law requires those who place products in the stream of commerce to stand behind the products, but it does not require everyone who facilitates the stream of commerce to do the same.

WINTER 2009 NEWSLETTER PREMISES LIABILITY UPDATE

admin — Wed, 21 Jan 2009 12:06:53 +0000

by Dean Foster

Brinson Ford, Inc. v. Alger, 228 S.W.3d 161 (Tex. 2007) Plaintiff Alger fell off a pedestrian ramp while visiting the car dealership. There were handrails along most of the ramp as it sloped down to ground level, but a small portion of the ramp continued beyond the handrails down to the sidewalk. Alger stepped off the un-railed portion of the ramp and fell. She filed a premises liability action for the injuries she sustained as a result of her fall. Alger sued Brinson Ford alleging that the configuration of the ramp posed an unreasonable risk of harm. Brinson Ford filed a No-Evidence and traditional Motion for Summary Judgment asserting that there was no evidence the ramp presented an unreasonable risk of harm and alternatively that as a mater of law the ramp did not pose an unreasonable risk of harm. The trial court granted Brinson Ford’s Motion for Summary Judgment and a divided Court of Appeals reversed, holding that a fact issue existed as to the premises owner’s actual or constructive knowledge of the condition, whether the condition posed an unreasonable risk of harm, and whether the premises owner failed to exercise reasonable care to reduce or eliminate the risk of harm. The Texas Supreme Court reversed the Court of Appeals’ judgment and rendered judgment in favor of Brinson Ford. The Supreme Court held that as a matter of law the ramp did not pose unreasonable risk of harm because the portion of the ramp without handrails met all applicable safety standards and was marked with yellow striping, the height of the highest portion of the un-railed portion of the ramp was less than the average step, and no other customer had ever been injured on the ramp. Trammel Crow Cent Tex, Ltd. v. Gutierrez, No. 07-0091, Slip Op.(Tex. January 17, 2008). After leaving a movie theater in San Antonio late at night, Luis Gutierrez and his wife were attacked by an armed assailant and Gutierrez was killed. His estate sued Trammel Crow, the property manager, alleging that it failed to provide adequate security and breached its duty to protect against third party criminal actions. Plaintiff argued that the assault was a robbery because Mr. Gutierrez’s wallet could not be located following the attack. Trammel Crow presented evidence that Mr. Gutierrez had been a police informant regarding some recent burglaries and was attacked in retaliation for his cooperation with the police. The jury found in favor of Gutierrez and awarded $5 million dollars in damages. The Court of Appeals affirmed the judgment. The Texas Supreme Court reversed the Court of Appeals’ judgment and rendered a judgment that Gutierrez take nothing. The court noted that the foreseeability of an unreasonable risk of criminal conduct is a pre-requisite to imposing a duty of care. Otherwise, the court stated that a person who controls property would be subject to a universal duty to protect against third party criminal conduct. A landowner is not the insurer of crime victims. This foreseeability requirement protects the landowner from liability in the case of crimes that are so random and extraordinary that they could not reasonably be expected to foresee or prevent the crimes. The attack on Luis Gutierrez was so extraordinary and unlike any crime previously committed on the property, the court concluded Trammel Crow could not have reasonably foreseen or prevented the crime and thus owed no duty in this case.

WINTER 2009 NEWSLETTER COMMERCIAL TRUCK LITIGATION UPDATE

admin — Wed, 21 Jan 2009 12:08:32 +0000

by Dean Foster

Carr v. Transam Trucking Co., Inc., 2008 U.S. Dist. Lexus 3158 (N.D. Tex. April 14, 2008) Defendant Transam Trucking Company, Inc., a federal motor carrier, filed a Motion to Compel Arbitration of all claims asserted by one of its former drivers in his personal injury action. Plaintiff alleged he was seriously injured when the truck he was driving overturned while negotiating a right turn. The Plaintiff was trained to operate a truck with an automatic transmission, but the truck provided by Defendant was equipped with a 10 speed manual transmission. Plaintiff stated that he notified the Defendant that he was not competent to operate the truck with a manual transmission, but Defendant ordered the Plaintiff to drive the truck anyway. Defendant filed a Motion to Compel Arbitration under the Federal Arbitration Act pursuant to a mutual agreement to arbitrate claims Plaintiff signed six days prior to the accident. Defendant argued that this document required Plaintiff to submit his claims for negligence, gross negligence, and negligence per se to binding arbitration. Plaintiff countered that the FAA does not apply to employment contracts of transportation workers engaged in the movement of goods in interstate commerce. Section 1 of the FAA specifically excludes “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The court noted that the Supreme Court has interpreted this provision to exempt from the FAA employment contracts of transportation workers (actually engaged in the movement of goods in interstate commerce). Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 112 (2001). The Defendant did not dispute that the Plaintiff was a transportation worker within the meaning of Section 1 of the FAA. Instead, Defendant argued that the arbitration agreement did not constitute a contract of employment. The court disagreed, noting that the arbitration agreement signed by Plaintiff unambiguously provided that his agreement to arbitrate claims was a condition of commencing or continuing employment with Transam Trucking, Inc. In fact, Defendant had previously argued to the court that the Plaintiff executed the mutual agreement to arbitrate claims in exchange for acceptance of at-will employment and the Defendant’s Occupational Injury Employee Benefit Plan. The court therefore determined that Plaintiff’s agreement to arbitrate was a condition of his employment and formed part of the employment contract with the Defendant. As a result, the Federal Arbitration Act did not apply and Defendant’s Motion to Compel Arbitration was denied. Zhuta v. Andrew Little & Interstate Express, Inc., No. 05-06-01430-CV (Tex.App.—Dallas, August 14, 2007, no pet.), 2007 Tex.App.—Lexus 6516. Plaintiff Zhuta was driving his vehicle westbound on Interstate 30 when the left rear tandem wheels came loose from a tractor/trailer truck traveling eastbound on the interstate. The truck was owned and operated by Andrew Little and leased by Interstate Express, Inc. The wheels came over the median and hit Zhuta’s vehicle causing him to lose control. Plaintiff was pinned in his vehicle and suffered injuries to his head, chest, back, and legs. Plaintiff sued Little and Interstate Express for negligence and negligence per se. Defendants filed a No-Evidence Motion for Summary Judgment alleging that Plaintiff had failed to produce any evidence that Defendants had breached any duty owed to Plaintiff or that any such breach was the proximate cause of Plaintiff’s damages. The trial court granted Defendants’ No-Evidence Motion for Summary Judgment. Plaintiff then filed a Motion for New Trial. In the motion, Plaintiff contended that the trial court failed to provide Plaintiff with a res ipsa loquitur presumption and failed to recognize a fact issue regarding Little’s failure to perform a prudent inspection of the truck. The trial court denied appellant’s request for a new trial. Plaintiff’s first issue on appeal was the trial court’s failure to provide a res ipsa loquitur presumption. Summary judgment evidence in the case showed that improperly tightened spindle nuts allowed the wheel assembly to come off the truck. The evidence also showed that two third parties had worked on the truck in the past year, which included the removal of the spindle nuts. As a result, the Court of Appeals concluded that Plaintiff had not met his burden to show the mechanism causing the injury to Plaintiff was wholly within the control of the Defendants and had not been “meddled with” by third parties. Therefore, the court concluded that the doctrine res ipsa loquitur was not applicable in this case. Plaintiff also argued that the trial court erred in granting Defendants’ Motion for Summary Judgment because Defendants’ failure to properly inspect the truck was sufficient evidence of negligence to raise a fact issue. Little testified that prior to each trip he performed a thorough inspection of the truck as required by law. A representative of Interstate Express testified that prior to leasing Little’s truck the company required Little to produce a valid Department of Transportation inspection. The inspection report showed that the truck passed inspection and was in very good condition one month before the accident. The truck also had quarterly maintenance reports which had been kept in the regular course of business. Plaintiff attempted to argue that because the accident occurred, the truck must not have been properly inspected. The court declined to enter into such a circular argument. The court concluded that the evidence showed that Defendants had properly inspected the truck and Plaintiff had not produced any summary judgment evidence sufficient to create a fact issue with respect to whether the inspection was negligent.

WINTER 2009 NEWSLETTER Successes, Victories and Other News

admin — Wed, 21 Jan 2009 12:11:41 +0000

Fanning Harper Martinson Brandt & Kutchin, P.C. is pleased to provide you with our Winter 2009 Newsletter. Below you will find information regarding successes and activities in which our attorneys have recently been involved. Please click on the hyperlinks to our website to find interesting updates for issues relating to Commercial Truck Litigation, Premises Liability, Products Liability, Texas Supreme Court—Insurance Law, Civil Rights, Municipal Law, and Employment Law. If you would like additional information regarding these updates, please contact the writers at 214-369-1300. To be removed from future e-mails from our firm, please respond to sgoode@fhmbk.com

SUCCESSES, VICTORIES and OTHER NEWS

JOSH KUTCHIN successfully defended a Longview hospital in a Gregg County premises-liability case tried in January. The claim involved a sympathetic older lady who fell and sustained injuries while visiting her adult son who was a patient in the hospital dying of cancer. The plaintiff underwent a total knee replacement with post-surgical complications, and incurred medical expenses of approximately $69,000. The son ultimately died while the plaintiff was in the hospital having the resulting knee surgery. The jury found no negligence on the part of the hospital. ROCKY LITTLE obtained a defense verdict in a liability case in Ellis County. The case involved the plaintiff offering to help unload a delivery truck. He fell off the truck and claimed serious back injuries. After two days of testimony, the jury returned a verdict of no negligence against the defendant. The United States Court of Appeals for the Fifth Circuit affirmed our case dispositive summary judgment in Parra v. Markel International Ins. Co., 2008 U.S. App. Lexis 6011 (5th Cir. 2008). DON D. MARTINSON represented Markel International Insurance Company. Parra obtained a judgment against an insured of Markel for 1 million dollars in a trial in Laredo, Texas. Parra then filed suit against Markel in Laredo to collect the judgment and extra-contractual damages. We removed the case to Federal Court and ultimately filed a Motion for Summary Judgment successfully asserting applicable insurance coverage defenses. The Texas Eleventh Court of Appeals, sitting in Eastland, Texas, affirmed our case dispositive summary judgment in Sheffield, et al v. Breckenridge Independent Grocers Alliance, et al, 255 S.W.3d 779 (Tex.Civ.App.—Eastland 2008). DON MARTINSON represented Breckenridge Independent Grocers Alliance. The family of a teenager killed in a motor vehicle accident sued our client alleging that it was negligent in the sale of alcohol to a member of the deceased teenager’s family who was employed by our client. The trial court and Court of Appeals concluded that the intoxication of the deceased teenager was too remote to the sale of alcohol by our client to one of its employees to create liability under the Texas Dram Shop. THOMAS P. BRANDT and JOSH SKINNER worked with Kathleen Weiskopf and Mack Reinwand, attorneys for the City of Arlington, to successfully represent the City of Arlington before the City’s License Amortization and Appeal Board (LAAB) on January 30, 2009. Based upon the evidence submitted in the full day evidentiary hearing, the LAAB voted unanimously to deny an exemption to Chicas Locas, a topless bar operating in the City of Arlington. THOMAS P. BRANDT, JOSH SKINNER and JOHN HUSTED obtained a final judgment in federal court in favor of Erath County and two of its officials in a case arising out of the tragic death of Jana Roberson. The plaintiff contended that Erath County and its officials should have been held responsible for Ms. Roberson’s death because they allegedly knew of the danger to Ms. Roberson but did nothing to stop it. The case raised issues relating to the “state-created danger” theory of liability. BARRY FANNING and RON IHLE received a defense verdict in a slip-and-fall case tried in Dallas County recently. The plaintiff had dropped his wife off for a hair appointment at a business in our client’s shopping center. The plaintiff then walked next door to a bank to conduct business. There was a set of four steps that connected the two properties. After the plaintiff had completed his business, as he was walking back to his car, he fell down the steps and landed on his face. The injury resulted in blindness in one of his eyes. The stairs were built more than fifteen years ago and did not comply with current code. However, Barry and Ron were able to establish that the plaintiff had used the steps on a numbers of times in the past. They were also able to show that any danger involved in the steps was an open and obvious condition. THOMAS P. BRANDT and JOSH SKINNER obtained a unanimous en banc appellate victory in Davis v. Dallas County Schools, 259 S.W.3d 280 (Tex. App. – Dallas 2008, no pet.) (en banc). The case involved a worker’s compensation retaliation claim by a former employee. FHMBK argued that the plaintiff’s claims were barred because she failed to exhaust her administrative remedies, as required for worker’s compensation claims against public school districts. The court of appeals, in a unanimous en banc opinion, agreed that plaintiff’s claims were barred, overturned an earlier Dallas Court of Appeals opinion on the same issue, and affirmed the trial court’s dismissal of the case. THOMAS P. BRANDT and JOSH SKINNER obtained a dismissal in five cases by a prisoner against a county and various county officials before the 355th Judicial District, Hood County. The plaintiff alleged a wide variety of claims relating to his arrest, trial and conviction. FHMBK filed a motion to dismiss pursuant to Chapter 14 of the Texas Civil Practice & Remedies Code, a chapter relating to lawsuits by prisoners, arguing that the plaintiff had failed to establish any viable claims against our clients, that the various county officials were entitled to absolute or qualified immunity and that the plaintiff should be declared a vexatious litigant. The trial court agreed, dismissed the case and declared the plaintiff a vexatious litigant. THOMAS P. BRANDT and JOSH SKINNER obtained dismissal on a plea to the jurisdiction in Booker v. Dallas County Community College District in the County Court at Law No. 4, Dallas County. The case involved allegations of misrepresentation in regard to a teacher certification program. FHMBK filed a plea to the jurisdiction asserting that the trial court did not have jurisdiction over the case because our client is a governmental entity entitled to immunity from the plaintiff’s tort and Deceptive Trade Practices Act claims. The trial court granted the plea and dismissed the case. THOMAS P. BRANDT and JOSH SKINNER obtained a dismissal in Reilly v. City of Grandview in the United States District Court for the Northern District of Texas, Dallas Division. The plaintiffs, a husband and wife, brought suit against a former city police chief, the city, and our client, a county sheriff’s department, alleging that the former police chief, in conjunction with the city and county sheriff’s department, had retaliated against the plaintiffs because of an article in the local newspaper written by one of the plaintiffs. FHMBK filed a Rule 12(b)(6) motion arguing that a county sheriff’s department cannot be sued because it has no jural existence. The district court granted the motion. THOMAS P. BRANDT spoke on various topics at the annual Suing and Defending Governmental Entities Conference sponsored by the State Bar of Texas. His talks included the regulation of immigration by state and local governments as well qualified and official immunity. He also participated in a panel discussion on ethical issues relating to attorney’s fee disputes and moderated a panel on immigration issues. JOSHUA SKINNER recently guest lectured at the University of Texas at Dallas for a course titled “Civil Rights and Society” and spoke on the regulation of immigration by state and local governments at a conference sponsored by the Texas Municipal League Intergovernmental Risk Pool. THOMAS P. BRANDT and FRANK VALENZUELA obtained six summary judgments for DALLAS COUNTY SCHOOLS in Fields v. Dallas County Schools in the United States District Court for the Northern District of Texas, Dallas Division. The plaintiff brought race discrimination claims under both Title VII and § 1983, as well as Title VII retaliation claims, against the District because their employments were terminated. FHMBK argued that none of the plaintiff could establish a prima facie case, and that the District had legitimate, non-discriminatory reasons for firing the plaintiffs. The district court granted summary judgment. THOMAS P. BRANDT and FRANK VALENZUELA obtained a victory for the MESQUITE INDEPENDENT SCHOOL DISTRICT in Priestly v. Mesquite Independent School District in the District Court 298th District Court, Dallas County. The case involved claims of negligent supervision and training over one of the District’s instructors. FHMBK argued that the District enjoyed governmental immunity regarding such claims. The District Court granted the District’s Plea to the Jurisdiction. THOMAS P. BRANDT and JOHN F. ROEHM III obtained a favorable result for the COPPELL INDEPENDENT SCHOOL DISTRICT in CB Parkway Business Center VI, Ltd. v. City of Coppell in the United States District Court for the Northern District of Texas, Dallas Division. The case involved allegations of abuse of power and illegal use of eminent domain authority on the part of the School District. The School District filed a petition in condemnation against CB Parkway in county court at law to acquire land from CB Parkway for schools. As a result of this petition in condemnation, CB Parkway filed a separate lawsuit against the School District in county court at law for abuse of authority and fraud. CB Property subsequently amend their petition alleging federal constitutional claims. The School District removed the case to federal court. The parties reached a settlement wherein the School District can condemn CB Parkway’s property and the case was dismissed. THOMAS P. BRANDT and JOHN F. ROEHM III obtained a summary judgment for McKinney Police Officer Jose Quiles in John Gerard Quinn v. City of McKinney, Texas et al. in the U.S. District Court, Eastern District, Sherman Division. The Plaintiff filed suit against his ex-wife, daughter, the City of McKinney and Officer Quiles arising out of his arrest for aggravated assault of his daughter. The Plaintiff alleged that he was falsely arrested as a result of Officer Quiles executing a probable cause affidavit for his arrest on the charge of aggravated assault of a child. The Plaintiff brought state law negligent claims and federal constitutional claims, Fourth and Fourteenth Amendment, against Officer Quiles. The district court granted summary judgment for Officer Quiles based on official/qualified immunity. This ruling is on appeal before the Fifth Circuit Court of Appeals. THOMAS P. BRANDT and JOHN F. ROEHM III successfully closed down a sexual oriented business on behalf of the City of Grand Prairie in City of Grand Prairie, Texas v. Erotique Shop, Inc., et al., Cause No: 08-3143; 162nd Judicial District Court, Dallas County. In a previous lawsuit, the Erotique Shop, Inc. had entered into a Settlement Agreement with the City of Grand Prairie not to offer for sale certain goods and products at its store, The Romance Store. Erotique Shop, Inc. breached the Agreement by selling prohibited goods and products. We filed suit against Erotique Shop, Inc. for breach of the Agreement. As a result of the suit, Erotique Shop, Inc. elected to close their store and agreed not to open another sexual oriented business in the City of Grand Prairie. Following is a list of the Dallas County contested judicial races and results for 2006-2008 (the winners are shown in bold). The turnover of civil district and county court of law judges is the result of the Democratic party’s victories in Dallas County in 2006-2008:

November 2006 Results/ (%) of Votes Cast

Judge, 44th Judicial District David Kelton (REP)/48.42 Carlos Cortez (DEM)/51.58 Judge, 68th Judicial District Charles Stokes (REP)/ 47.08 Martin Hoffman (DEM)/52.92 Judge, 101st Judicial District Jay Patterson (REP)/49.35 Martin Lowy (DEM)/ 52.02 Judge, 116th Judicial District Robert Frost (REP/49.35 Bruce Priddy DEM/50.65 Judge, 160th Judicial District Nancy Thomas (REP)/47.39 Jim Jordan (DEM/52.61 Judge, 191st Judicial District Catharina Haynes (REP)/48.23 Gena Slaughter (DEM/51.77 Judge, 192nd Judicial District Dawn Estes (REP)/46.53 Craig Smith (DEM/53.47 Judge, 193rd Judicial District David Evans (REP)/47.48 Carl Ginsberg (DEM)/52.52 Judge, 194th Judicial District Mary Miller (REP)/48.56 Ernest White (DEM)/51.44 Judge, 195th Judicial District Dianne Jones (REP)/48.35 Fred Tinsley (DEM)/51.65 Judge, 204th Judicial District Mark Nancarrow (REP)/46.69 Lena Levario (DEM)/53.31 Judge, 254th Judicial District Jeff Cohen (REP)/47.90 David Hanschen (DEM)/ 52.10 Judge, 255th Judicial District Craig Fowler (REP)/46.24 Lori Hockett (DEM)/53.76 Judge, 256th Judicial District Brenda Green (REP)/48.91 David Lopez (DEM)/51.09 Judge, 265th Judicial District Keith Dean (REP)/47.10 Mark Stoltz (DEM/52.90 Judge, 282nd Judicial District Karen Greene (REP)/48.86 Andy Chatham (DEM)/51.14 Judge, 283rd Judicial District Becky Gregory (REP)/48.42 Rick Magnnis (DEM)/51.58 Judge, 292nd Judicial District Henry Wade, Jr. (REP)/48.53 Larry Mitchell (DEM)/51.47 Judge, 298th Judicial District Karen Wilcutts (REP)/46.20 Emily Tobolosky (DEM)/53.80 Judge, 363rd Judicial District Faith Johnson (REP)/48.49 Tracy Holmes (DEM)/51.51 Judge, County Court at Law No. 1 Russell Roden (REP)/48.48 D’Metria Benson (DEM)/51.52 Judge, County Court at Law No. 2 John Peyton (REP)/48.73 King Fifer (DEM)/51.27 Judge, County Court at Law No. 3 John Stillwell (REP)/45.85 Sally Montgomery (DEM)/54.15 Judge, County Court at Law No. 4 Bruce Woody (REP)/46.85 Ken Tapscott (DEM)/53.15

2008 Elections /Results (%)

Judge, 14th Judicial District John Fowler (REP)/41.92 Eric Moye (DEM)/58.08 Judge, 95th Judicial District James Stanton (REP)/42.10 Ken Molberg (DEM)/57.90 Judge, 162nd Judicial District Mike Lee (REP)/41.32 Lorraine Raggio (DEM)/58.68

Windswept Halls - The Changing Employment Climate in the Obama Administration

admin — Thu, 22 Jan 2009 23:36:25 +0000

"Windswept Halls - The Changing Employment Climate in the Obama Administration" by Francisco J. Valenzuela, published in Texas Magazine www.mytexasmag.com

Victory on Appeal

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Fanning Harper Martinson Brandt & Kutchin, P.C. congratulates Thomas P. Brandt and Rebecca Raper on their recent, major appellate victory before the Fort Worth Court of Appeals in Doe v TASB et al, No. 2-08-266-CV. Tom and Rebecca successfully protected their clients from a $5 million judgment arising out of sexual abuse. In a unanimous opinion issued on Friday, March 6, the Fort Worth Court of Appeals affirmed the judgment that Fanning Harper Martinson Brandt & Kutchin secured in favor of it client, Texas Association of School Boards Risk Management Fund (“TASB RMF”) in the trial court. The litigation had a long history. Initially, claims were lodged against a school bus driver who was accused of molesting a child. TASB RMF has always disputed that coverage existed for the bus driver, but did provide a defense when the school district and another of its employees were sued. Though liability was disputed, the claims against the district and other employee were settled. As part of the settlement, the Plaintiff agreed to indemnify and hold TASB RMF harmless against future claims arising out of the molestation claims. Nevertheless, after the settlement, Plaintiff sued TASB RMF directly, seeking a declaration that TASB RMF was required to defend and indemnify the claims asserted against the bus driver. TASB RMF counterclaimed, asserting that (1) no coverage existed under its coverage document for claims against child molesters and (2) Plaintiff could never recover from TASB RMF because of the indemnity/hold harmless provisions contained in the earlier settlement agreement. TASB RMF was granted summary judgment on both issues. Plaintiff appealed the summary judgment after taking a $5 million verdict against the bus driver. The Court of Appeals determined that the indemnity language in the settlement agreement effectively bound the Plaintiff and, accordingly, that TASB RMF could never be liable again to Plaintiff with regards to the molestation claims. Having so held, the court determined that the coverage issues were essentially moot and did not address same. This case is important in that it illustrates that when a risk pool or insurer settles claims against a covered person/insured, the settlement agreement can be used to protect the risk pool/insurer from further liability involving non-settling purportedly covered persons/insureds. For more information contact Thomas Brandt at tbrandt@fhmbk.com To read the Court’s opinion, click here.

Announcement of Joshua A. Skinner as New Partner at FHMBK

admin — Thu, 22 Jan 2009 23:42:53 +0000

Fanning Harper Martinson Brandt & Kutchin, P.C. congratulates JOSHUA A. SKINNER on becoming a Member with the firm. Since joining the firm as an associate in 2003, Mr. Skinner has distinguished himself in the areas of Constitutional law, local government law, school law, and employment law. Please join us in congratulating Mr. Skinner for this significant accomplishment

The Seventh Annual Texas Legal Update

admin — Thu, 22 Jan 2009 23:58:32 +0000

Hot Topics in Constitutional and Employment Law First Party Property and Premises Update Tort Reform and Construction Law and Exhibits Clauses, Agreements, and Rules to Beat the Construction Litigation Frenzy Clauses, Agreements, and Rules to Beat the Construction Litigation Frenzy Insurance Law Update—Texas Supreme Court Apportionment of Damages Based on Insured/Paid Expenses and Settlement Credit Paper Exhibits

SPRING 2009 NEWSLETTER EMPLOYMENT UPDATE

admin — Wed, 01 Apr 2009 12:13:45 +0000

by Francisco J. Valenzuela

United States Supreme Court

14 Penn Plaza LLC v. Pyett, 556 U.S. __ (April 1, 2009). A collective-bargaining agreement which clearly requires union members to arbitrate age discrimination claims under the Age Discrimination in Employment Act (“ADEA”) is enforceable as a matter of federal law. A group of employee-union members were reassigned to other duties after their employer hired licensed security guards. The employees claimed that they had been assigned to less favorable jobs on account of their age and began to arbitrate their dispute. Soon thereafter, their age claims were removed from the arbitration and the employees filed a Charge of Discrimination with the Equal Employment Opportunity Commission. After obtaining a right to sue letter, they filed suit in federal court. In reaching its decision, the Court noted that the National Labor Relations Act (“NLRA”) governs federal labor-relations law. Under the NLRA, the employees designated the union as their sole representative for the purposes of collective bargaining. In this instance, the union negotiated an agreement requiring that discrimination claims, including those under the ADEA, be decided in arbitration. This requirement was a condition of employment that unions have authority to negotiate. In concluding its textual analysis, the Court noted that nothing in the ADEA prohibits such claims from being decided in arbitration. Finding no obstacle in federal law to prevent the enforcement of the clear terms of the collective bargaining agreement, and noting that the collective bargaining agreement was enforceable under the Court’s precedents, the Court held that collective bargaining agreements with clear language requiring arbitration of ADEA claims are enforceable under federal law.

Fifth Circuit

Cox v. DeSoto County, Miss., __ F.3d __, 2009 U.S. App. LEXIS 6933 (5th Cir. April 3, 2009). Federal courts should give collateral estoppel effect to the factual findings of a state agency acting in a judicial capacity when the claimant had the ability to obtain judicial review of those findings and failed to do so. Cox was terminated by the DeSoto County Sheriff’s office for alleged misconduct and filed for unemployment benefits. Cox also amended an existing lawsuit in federal court to include an age retaliation claim based on her termination. The Mississippi Employment Security Commission (“MESC”) held a hearing regarding her claim for unemployment benefits and concluded that Cox was ineligible for benefits because she had been terminated for employment-related misconduct. Cox unsuccessfully appealed an Appeals Referee and Board of Review decision, and then filed an appeal in the local circuit court. Subsequently, Cox dismissed her appeal in the circuit court. The defendants in the federal lawsuit filed a motion for summary judgment claiming that the collateral effect of the administrative ruling barred her case in federal court. In its ruling, the Fifth Circuit noted that, notwithstanding the voluntary dismissal of her appeal of the administrative ruling in state court, Cox was trying to attack the administrative ruling collaterally by arguing that a non-judicially reviewed decision of the MESC should not be granted preclusive effect, as well as claiming that the MESC’s decision was not based on substantial evidence and was tainted with fraud. The Fifth Circuit found, however, that Cox’s failure to pursue her appeal to challenge the judgment was fatal to her claims. Had she done so, Cox would have been allowed to present evidence of her claims. Finding support in U.S. Supreme Court precedent, the Fifth Circuit concluded that Cox could not collaterally attack the MESC’s decision. The Fifth Circuit did hold though that under existing Supreme Court precedent, collateral estoppel does not apply to a state administrative decision in areas of the law in which Congress has provided a detailed administrative remedy. For this reason, Cox was not collaterally stopped from asserting her ADEA claims. Duron v. Albertson’s LLC, 560 F.3d 288 (5th Cir. February 17, 2009). The Fifth Circuit vacated a district court order granting summary judgment to Albertson’s, LLC, Margarita Duron’s employer, because it found that there was a material question of fact regarding whether the EEOC 90-day right to sue letter to Ms. Duron had actually been mailed approximately two years before it was received. Ms. Duron filed an EEOC Charge of Discrimination alleging national origin discrimination and a later charge alleging retaliation. The EEOC dismissed Ms. Duron’s charge and drafted a letter advising her that she could file suit within 90 days of receipt of the letter. The letter was dated October 4, 2004. In an affidavit, Ms. Duron denies receiving the notice and stated that she and her attorney called the EEOC several times prior to and after Hurricane Katrina to inquire as to the status of her case. In addition, her attorney wrote and delivered a letter to the EEOC’s regional attorney which indicated that he had met with, and e-mailed, an EEOC official and explained that Ms. Duran intended to pursue her rights in this case. On August 24, 2006, Ms. Duran finally received a copy of the right to sue letter. Ms. Duron testified in her affidavit that that was the first time she had seen the letter, and her attorney represented to the court that he had not previously received a copy of the letter. Ms. Duron then filed suit. The district court granted summary judgment in favor of Albertson’s on the ground that Ms. Duron’s affidavit was not sufficient to rebut the presumption that she received the 90 day notice letter at some time close to October 4, 2004, thereby rendering her lawsuit untimely. The Fifth Circuit acknowledged the mailbox rule on which the district court relied, “that proof that a letter properly directed was placed in a post office, creates [a] presumption that it reached its destination in usual time and was actually received by the person to whom it was addressed.” The Fifth Circuit noted, however, that a threshold question to the mailbox rule was whether there was sufficient evidence that the letter was actually mailed. Evidence of mailing would include a sworn statement to that effect and evidence regarding customary mailing practices in the business of the sender. The Court noted that “[e]vidence of non-receipt can be used to establish that notice was never mailed.” The Court of Appeals then noted that Albertson’s had not provided any evidence that the EEOC sent the 90 day notice or that it received the letter near October 4, 2004. The Court of Appeals believed that the evidence submitted by Mr. Duron was sufficient to create a fact question, making summary judgment inappropriate.

Texas Supreme Court

Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, __ S.W.3d __, 2009 Tex. LEXIS 124 (April 17, 2009). A covenant not to compete in an at-will employment agreement is enforceable when an employee promises not to disclose confidential information and the employer never makes a promise to provide confidential information, if the nature of the employment will reasonably require the provision of confidential information. In that case, the employer “impliedly promises” to provide the employee with confidential information making the covenant enforceable as long as all other requirements of the Covenant Not to Compete Act are met. As a condition of his employment, Brendan Fielding signed an at-will employment agreement in which he promised not to disclose confidential information. Fielding’s employer made no express promise to provide Fielding access to information, but did provide confidential information to him. In order to determine whether an enforceable covenant not to compete has been created a court will look to (1) whether there is an “otherwise enforceable agreement,” and (2) whether the covenant not to compete was “‘ancillary to or part of’ that agreement at the time the otherwise enforceable agreement was made.” In regards to the second requirement, a court will determine whether it is met by looking at two requirements: (1) “the consideration given by the employer in the otherwise enforceable agreement must give rise to the employer’s interest in restraining the employee from competing,” and (2) the “covenant must be designed to enforce the employee’s consideration or return promise in the otherwise enforceable agreement.” In reaching its decision that the covenant was enforceable, the Supreme Court reasoned that if the type of work an employee is hired to perform requires that confidential information be provided to him, the employer is thereby impliedly promising that confidential information will be provided. Such an implied promise in exchange for the employee’s express promise will establish an otherwise enforceable agreement. After reaching this conclusion, the Court found that the covenant not to compete met the other requirements for an enforceable non-compete agreement. In re Labatt Food Service, L.P., __ S.W.3d __, 2009 Tex. LEXIS 28 (February 13, 2009). An arbitration agreement entered into between an employee and his employer that requires that all disputes, including disputes concerning a benefit plan offered in lieu of workers compensation insurance, must be submitted to binding arbitration, is enforceable against the employee’s wrongful death beneficiaries. Carlos Dancy, Jr., an employee of Labatt Food Service, L.P., elected to participate in a benefit plan offered by his employer in lieu of workers’ compensation insurance. In order to participate in the plan, Mr. Dancy was required to sign an agreement which, in part, required all disputes, including those concerning occupational injury or death, be arbitrated. Mr. Dancy subsequently died while working for his employer. In reaching its decision, the Supreme Court noted that the Wrongful Death Act, through which wrongful death suits may be asserted, allows beneficiaries to pursue claims “only if the individual injured would have been entitled to bring an action for the injury if the individual had lived.” In other words, the beneficiaries’ rights are completely derivative of the decedent’s rights to have sued for his own injuries prior to his death. Wrongful death beneficiaries are in the exact “legal shoes” of the decedent and so “they are subject to the same defenses to which the decedent’s claims would have been subject. Shortly after issuing this decision, the Supreme Court also issued another decision, In re Jindal Saw Limited, __ S.W.3d __, 2009 Tex. LEXIS 33 (Tex. February 27, 2009), standing for the same proposition. Also, on May 6, 2009, the Fifth Circuit decided a similar case, noting the Labatt decision and holding that the same result is reached under the federal common law of contracts, i.e. wrongful death beneficiaries in Texas are “bound by an arbitration agreement between the decedent and his employer.” Graves v. BP America Inc., __ F.3d __, 2009 U.S. App. LEXIS 9865 (5th Cir. 2009).

SPRING 2009 NEWSLETTER LOCAL GOVERNMENT LAW UPDATE

admin — Wed, 01 Apr 2009 12:14:02 +0000

by Joshua Skinner

Fifth Circuit

Pasco v. Knoblauch, __ F.3d __, 2009 U.S. App. Lexis 9448 (5th Cir. April 28, 2009) Normally, the defense of qualified immunity must be raised by a public official in the public official’s first responsive pleadings (e.g., answer, motion to dismiss, etc.). However, a public official may be able to raise the defense of qualified immunity at the summary judgment stage, so long as there is a legitimate justification for the delay and there is no evidence that the delay harmed the plaintiff’s ability to respond to the assertion of qualified immunity. Pasco brought suit against Knoblauch alleging that Knoblauch, a police officer, rear ended Pasco during a high speed chase, causing Pasco to careen off the road into a ditch. Knoblauch did not raise the defense of qualified immunity until fifty-two months into the case. However, when Knoblauch raised the defense of qualified immunity in his motion for summary judgment, there were still two months remaining for Pasco to conduct discovery and Pasco was able to fully respond to the qualified immunity briefing. Knoblauch raised the qualified immunity defense based on the Supreme Court’s decision in Scott v. Harris, 550 U.S. 372 (2007), which was decided after the institution of Pasco’s suit against Knoblauch. The trial court refused to consider the qualified immunity defense. The Fifth Circuit reversed the decision of the district court. The Fifth Circuit held that while normally qualified immunity is an affirmative defense that must be raised in a public official’s first responsive pleadings (e.g., answer, motion to dismiss, etc.), the public official may raise the defense at a later point in the litigation if there is no prejudice to the plaintiff’s ability to respond to the assertion of qualified immunity. Also weighing in favor of the late assertion of qualified immunity was the unsettled state of the law. Neither the Supreme Court nor the Fifth Circuit had directly addressed the precise issue in question until the Supreme Court decided Scott. Rangra v. Brown, __ F.3d __, 2009 U.S. App. Lexis 8702 (5th Cir. April 24, 2009) The speech of elected state and local government officials is entitled to full First Amendment protections. Restrictions on their speech, such as the criminal sanctions imposed by the Texas Open Meetings Act, are subject to strict scrutiny. This case should be watched carefully because the criminal penalties under the Texas Open Meetings Act may be declared unconstitutional. The plaintiffs, elected city council members, were indicted under the criminal provisions of the Texas Open Meetings Act (TOMA) for acting as a quorum via private emails in which they discussed issues relating to their official duties. The criminal charges were eventually dropped, but the plaintiffs brought suit alleging fear of future prosecutions and undue restriction on their protected First Amendment free speech. The district court dismissed the case, holding that government employees have no First Amendment protection of speech made pursuant to their official duties. The Fifth Circuit reversed the decision of the district court. The Fifth Circuit held that the speech of elected officials is entitled to full First Amendment free speech protections and that any restrictions on that speech, such as the criminal penalties under TOMA, should be evaluated under the strict scrutiny standard. The Fifth Circuit remanded the case to the district court to evaluate TOMA under the appropriate level of scrutiny. Davis v. Tarrant County, __ F.3d __, 2009 U.S. App. Lexis 7134 (5th Cir. April 8, 2009) Selection of attorneys by judges for inclusion in a rotating list of criminal defense attorneys for appointment as defense counsel may be a judicial function for which judges are entitled to absolute judicial immunity. Davis was denied inclusion in a rotating list of criminal defense attorneys created for use by Tarrant County courts. The appointment procedure in Tarrant County provided little option for individual selection of attorneys by the judges once attorneys were on the approved rotation list. The district court dismissed the claims against the judges based on absolute judicial immunity. The Fifth Circuit affirmed as to the procedure for creating the approved rotating list in Tarrant County. The Fifth Circuit concluded that a judge would be entitled to absolute judicial immunity, generally speaking, for appointing counsel in individual cases. Since decisions about whether to include an attorney on the approved list were virtually the only opportunity for judges to exercise that discretion in Tarrant County, the Fifth Circuit concluded that the judges were also entitled to absolute judicial immunity for their approval of counsel to the rotation list. Lytle v. Bexar County, 560 F.3d 404 (5th Cir. February 23, 2009) A police officer’s use of deadly force to stop a high-speed chase can be unreasonable, in violation of the Fourth Amendment. Also, when deciding issues of qualified immunity, courts are required to determine whether a constitutional violation has been alleged or shown if the court denies qualified immunity to the public official. Bexar County Sheriff’s Deputy O’Donnell fired at a car during the course of a police chase and killed a passenger in the fleeing vehicle. The parties disputed facts material to whether the fleeing vehicle posed a danger to the public. The district court denied qualified immunity because of the fact question. O’Donnell argued that the Supreme Court’s decision in Scott v. Harris, 550 U.S. 372 (2007), entitles him to qualified immunity because it indicates that use of deadly force to stop a high-speed chase is reasonable under the Fourth Amendment. The Fifth Circuit affirmed the decision of the district court. The Fifth Circuit rejected O’Donnell’s interpretation of Scott and held that the use of deadly force to end a high-speed chase can violate the Fourth Amendment and that the facts as alleged by Lytle would violate the Fourth Amendment. Interpreting the Supreme Court’s recent decision in Pearson v. Callahan, __ U.S. __, 129 S. Ct. 808 (2009), the Fifth Circuit held that courts must determine whether the plaintiff has alleged or shown a constitutional violation if the court is going to deny qualified immunity to the public official. Under Pearson, however, courts are not required to determine whether the plaintiff has alleged or shown a constitutional violation if the court is going to grant qualified immunity.

Texas Supreme Court

Southwestern Bell v. Harris County Toll Rd. Auth., 52 Tex. Sup. J. 579, 2009 Tex. Lexis 122 (April 3, 2009) A utility forced to relocate from a public right-of-way must do so at its own expense. The utility has no property interest in the continued use of the public right-of-way. During the expansion of a road into a tollway, Harris County required Southwestern Bell to relocate facilities that it had in the right-of-way of the road in order to accommodate a new tollway. Southwestern Bell sent a bill to Harris County for the expense, which Harris County refused to pay. Both parties filed motions for summary judgment. The trial court granted Southwestern Bell’s motion and denied Harris County’s. On appeal, the court of appeals reversed and rendered in favor of Harris County. The Texas Supreme Court held that utilities have no property interest in the continued use of a public right-of-way. As a result, a utility cannot establish a Takings claim against the governmental entity if the utility is forced to relocate from the public right-of-way.

Texas Courts of Appeals

Whirty v. Grimes, 2009 Tex. App. Lexis 2535 (Tex. App. – Amarillo April 14, 2009, no pet.) Under Chapter 14 of the Texas Civil Practice & Remedies Code, indigent inmates are required to exhaust their administrative remedies before bringing suit against prison officials in state court. Inmates are not excused from exhaustion of their administrative remedies because they believe that further administrative exhaustion would be futile. Whirty, an inmate with the Texas Department of Criminal Justice (TDCJ), filed a grievance alleging conversion of his personal property. The TDCJ maintains a two-step grievance process. After the first step, Whirty’s grievance was returned marked “redundant.” Whirty alleged that the reviewing official mistakenly believed that the grievance related to an earlier grievance by Whirty. Whirty made no effort to resubmit the grievance or appeal the “decision” of the reviewing officer. Whirty filed suit and the trial court dismissed the case pursuant to Chapter 14 of the Texas Civil Practice & Remedies Code. The court of appeals affirmed the decision of the trial court. The court of appeals concluded that Whirty failed to exhaust his administrative remedies and that his failure to exhaust is not excused by his belief that exhaustion would be futile. Vantage v. Raymondville Indep. Sch. Dist., 2009 Tex. App. Lexis 2472 (Tex. App. – Corpus Christi April 9, 2009, pet. filed) In order to establish that a court has jurisdiction to hear a breach of contract claim against a governmental entity under Texas Local Government Code section 271.152, the plaintiff must prove the existence of a written and properly executed contract. Also, there is no waiver of governmental immunity for quantum meruit claims. Finally, even if a governmental entity waives governmental immunity by pleading counter-claims, immunity is regained if the entity non-suits the counter-claims. Vantage brought suit against Raymondville ISD alleging breach of contract and quantum meruit claims relating to a construction project. Vantage bid on a construction project for the district and its bid was accepted by the school board. Vantage submitted a written contract for execution and began work on the project, receiving at least one payment. The contract was not executed, however, and the school district began to have concerns about the quality and cost of Vantage’s work. When Vantage brought suit, the school district defended itself by alleging counter-claims. After approximately four years of litigation, the district asserted governmental immunity in a plea to the jurisdiction and non-suited its counter-claims. The trial court dismissed the suit and Vantage appealed. On appeal, the court of appeals held that proof of a written contract that is properly executed is a jurisdictional fact that Vantage failed to prove. Also, the court of appeals held that there is no waiver of governmental immunity for quantum meruit claims. Finally, while the school district waived governmental immunity when it filed counter-claims, immunity was restored when the school district non-suited its counter-claims. City of Houston v. Williams, 2009 Tex. App. Lexis 2436 (Tex. App. – Houston [14th Dist.] March 31, 2009, no pet.) City ordinances setting forth the essential terms of at least some employees’ benefits (such as overtime and termination pay) constitute written contracts subject to the waiver of governmental immunity in Texas Local Government Code section 271.152. Various firefighters brought suit against the City of Houston alleging breach of contract claims relating to their employee benefits. The plaintiffs argued that governmental immunity was waived by City ordinances and related state statutes specifying the type of benefits (such as overtime and termination pay) available to employees, including the plaintiff-firefighters. The City filed a plea to the jurisdiction, which the trial court denied. The court of appeals concluded that while the state statutes were not written contracts within the meaning of the waiver of governmental immunity in Texas Local Government Code section 271.152, ordinances of the City setting forth available employee benefits could qualify as written contracts and thus waive the City’s governmental immunity. The court of appeals affirmed the decision of the trial court.

SPRING 2009 NEWSLETTER CIVIL RIGHTS LAW UPDATE

admin — Wed, 01 Apr 2009 12:15:04 +0000

By John Husted

United States Supreme Court

FCC v. Fox Television Stations, Inc., __ U.S. __, 2009 U.S. Lexis 3297 (April 28, 2009) The FCC’s “fleeting expletive” policy is neither arbitrary nor capricious. FCC policy declares that use of the F-Word or the S-Word can be actionably indecent, even when the word is used only once and non-literally. The FCC issued an order based on broadcasted expletives uttered by Bono, Cher, and Nicole Richie, holding that the live broadcasts met the test, since one use involved a literal description of excrement and both invoked the F-Word. In a highly publicized opinion, the Court reversed the Second Circuit’s judgment finding against the FCC, and remanded the case for further proceedings. Stating that the Supreme Court is a court of final review, not of first review, the Court refused to determine the validity of the order under the First Amendment when the Second Circuit had not definitively ruled on the issue. Pleasant Grove City v. Summum, __ U.S. __, 129 S. Ct. 1125 (February 25, 2009) Monuments on government property are government speech, which is not subject to the First Amendment free speech clause. Plaintiff, a religious organization, requested permission to erect a stone monument in a park that contained several other donated monuments, including a stone Ten Commandments. The organization brought suit against the City and local officials claiming that defendants violated the Free Speech Clause by accepting the Ten Commandments monument while rejecting the organization’s Seven Aphorisms monument. The Court concluded that the City’s decision to accept certain privately donated monuments while rejecting Plaintiff’s monument was a form of government speech, and thereby not subject to the Free Speech Clause. The permanent monument displays, as opposed to the transitory expressive acts and traditional public forum speeches that commonly took place in the park, were government speech and not a form of expression to which the analysis applied. Ysursa v. Pocatello Educ. Ass’n, __ U.S. __, 129 S.Ct. 1093 (February 24, 2009) The First Amendment does not confer an affirmative right to use government payroll mechanisms to obtain funds for political activities. Idaho law permits public employees to authorize payroll deductions for union dues; however, it prohibits deductions for union-based political activities. This ban applies at the state and local level. Public employee unions brought this suit alleging, among other things, that the ban violated the First Amendment. The Court found that Idaho’s law does not restrict political speech, but rather declines to promote that speech by allowing public employee checkoffs for political activities. The First Amendment does not impose an obligation on government to subsidize speech. Since the State had no obligation to help unions in their political activities, the Court applied only a rational basis analysis to find justification for the State’s political payroll deduction ban. Idaho’s justification, to avoid the appearance of government entanglement in partisan politics, was reasonable, and its response was properly limited. The Court held that Idaho’s law banning political payroll deductions, as applied to local governmental units, does not violate the plaintiffs’ First Amendment rights.

Fifth Circuit Court of Appeals

Byrum v. Landreth, __ F.3d __, 2009 U.S. App. Lexis 8312 (5th Cir. April 22, 2009) In a First Amendment challenge to a law restricting advertising language, the government bears the burden of proving, in a preliminary injunction context, the constitutionality of the burden on commercial speech at issue. The state of Texas has an interior design “titling” law, which prohibits unlicensed practitioners from advertising or representing themselves using the words “interior designer” or “interior design.” Plaintiffs, though experienced and accomplished interior designers, do not meet certain qualifications required for licensing. The unlicensed interior designer plaintiffs brought this commercial speech case to prevent Texas from enforcing the titling law. The district court denied Plaintiffs’ preliminary injunction. Since the designers were not required, as the district court held, to prove that they were entitled to summary judgment in order to establish a substantial likelihood of success on the merits for preliminary injunctive relief, the Fifth Circuit held that the district court abused its discretion by denying preliminary injunction. The district court should have determined whether there was a sufficient likelihood that the officials would ultimately fail to prove the regulations were constitutional. The Fifth Circuit concluded that the designers were likely to succeed where the officials failed to justify the constitutionality of the challenged law. Kucinich v. Texas Dem. Pty., __ F.3d __, 2009 U.S. App. Lexis 6084 (5th Cir. March 24, 2009) There is no free association right to have influence within a political party. Former candidate Dennis Kucinich brought this First Amendment (denial of associational rights) challenge to a Texas Democratic Party rule that requires prospective presidential candidates to swear that they will “fully support” the party’s presidential nominee, “whoever that shall be,” in order to qualify for the primary ballot. Kucinich urged that the oath was unconstitutionally vague and unduly burdens his rights to qualify for the ballot and the right of supporters to vote for him as a candidate. The Fifth Circuit affirmed the district court’s denial of preliminary injunction, finding no constitutional issue with the oath. The court found that a prospective candidate does not have a right to compel a political party to place him on its ballot when he refuses to agree to support its candidates, and found that the non-legally enforceable oath neither abridges his speech, nor tells him what to say, nor impairs the flow of information to the public. Texas law has rightly described a party loyalty oath as a moral obligation, which is distinct from an “executory legal” obligation because “the courts do not undertake to compel compliance.” Croft v. Perry, 562 F.3d 735 (5th Cir. March 16, 2009) Mandatory minute of silence in Texas schools does not violate the Establishment Clause. Parents of Texas students sued Texas Governor Rick Perry alleging that amendments to the Texas Education Code’s minute of silence statute that provided for a mandatory minute of silence to be observed in Texas schools was an unconstitutional establishment of religion. Applying the three-pronged Lemon test, the Fifth Circuit found that there was no excessive entanglement of religion and that the primary effect of the amendments was not to advance religion. As for the legislative purpose of the amendments, the court gave deference to the legislative history and found an adequate secular purpose. The court deferred to the stated legislative intent for the amendments, which was to promote patriotism and allow for a moment of quiet contemplation. Though some legislators might have been motivated by religion, the court determined that this did not outweigh the valid secular purposes. United States v. Ward, 561 F.3d 414 (5th Cir. Feb. 26, 2009) A fugitive does not have a Fourth Amendment right to privacy in a motel room, thereby making it subject to a warrantless search. The defendant, an inmate mistakenly released after being sentenced, was captured after federal marshals searched his motel room. The defendant moved to suppress the evidence found in his motel room, namely a firearm and alleged that the warrantless search of his motel room violated his Fourth Amendment right to privacy. The Fifth Circuit affirmed the district court’s conviction and sentence, finding that it did not err in rejecting the criminal defendant’s motion to suppress. An escapee has no constitutionally protected reasonable expectation of privacy. The defendant legally belonged in a prison cell. As such, he was precluded from invoking the Fourth Amendment to suppress a warrantless search. Sossamon v. The Lone Star State of Texas, 560 F.3d 316 (5th Cir. Feb. 17, 2009) RLUIPA does not create a cause of action for damages for inmates against officials in their individual capacities, and an award of damages against officials in their official capacities may be barred by Texas sovereign immunity. Plaintiff, a pro se prison inmate brought this Religious Land Use and Institutionalized Persons Act (RLUIPA) and First Amendment case against the Texas prison system and its officials claiming that the prison’s policies impeded his free exercise of religion. Plaintiff sought monetary, declaratory and injunctive relief. Plaintiff alleged that the prison chapel-use policy deprived him of access to the chapel for purposes of his Christian worship and that while on cell restriction, he was forbidden to attend any worship services at all. As to Plaintiff’s claim for monetary damages under RLUIPA, the Fifth Circuit court held that whether or not RLUIPA creates a cause of action for damages against Texas and the defendants in their official capacities, any award of damages is barred by Texas’s sovereign immunity, and that RLUIPA does not create a cause of action against public officials in their individual capacities. As for declaratory relief, the court applied RLUIPA’s strict scrutiny analysis and found a genuine issue of material fact as to whether the chapel-use policy creates a substantial burden on Plaintiff’s free exercise and whether the policy was the least restrictive means of enforcing defendant’s compelling interest. As such, the Fifth Circuit reversed the district court’s grant of summary judgment against the inmate’s claims for declaratory and injunctive relief.

SPRING 2009 NEWSLETTER TEXAS SUPREME COURT INSURANCE LAW UPDATE

admin — Wed, 01 Apr 2009 12:17:44 +0000

by Rebecca Raper

Tanner v. Nationwide Mutual Fire Insurance Co., _____ Tex. Sup. J. ______ (Tex. April 17, 2009). In Tanner, an auto insurer sought to avoid an indemnity obligation under its policy based on an intentional injury exclusion where the insured was sued for injuring a family in a car accident that occurred because the insured was fleeing from the police in a high speed chase. The court determined that the intentional injury exclusion did not apply to bar coverage because while the insured may have acted intentionally in eluding police and driving too fast, there was no evidence that he intended the resulting bodily injuries or that he knew that the injuries were substantially likely to occur. Prodigy Communications Corp. v. Agricultural Excess & Surplus Insurance Co., 52 Tex. Sup. J. 475 (Tex. March 27, 2009) and Financial Industries Corp. v. XL Specialty Insurance Co., 52 Tex. Sup. J. 486 (Tex. March 27, 2009). In Prodigy, the Texas Supreme Court was asked to determine whether or not coverage could be disclaimed under a claims-made policy where notice of a claim was not given “as soon as practicable” but was given during the relevant reporting period. There was no prejudice to the insurer because of the reporting delay. The court concluded that coverage could not be denied in those circumstances, even where the “as soon as practicable” provision is labeled as a “condition precedent” to coverage on the face of the policy, because the reporting delay was merely a non-material breach of the insurance contract. Financial Industries also involved an “as soon as practicable” provision in a claims-made policy, but apparently one that was not labeled a “condition precedent” to coverage. The court, unanimously, found that a reporting delay that did not prejudice the insurer was not grounds for a coverage denial where the claim was eventually reported within the reporting period under the policy. Progressive County Mutual Insurance Co. v. Kelley, 52 Tex. Sup. J. 488 (Tex. March 27, 2009). In Kelley, a woman who had been seriously injured when the horse she was riding was struck by a car settled the claims against the driver of the car for $100,000, the driver’s policy limits, and then recovered an additional $500,025 in underinsured motorist benefits from Progressive, her parents’ insurer. Not having been made whole, she attempted to recover an additional $500,025 from Progressive, arguing that it had issued two separate policies to her parents and that she was entitled to recover separately under both. There were two Progressive policy numbers associated with her parents because they had insured five vehicles and Progressive’s internal software was designed so only four vehicles could be listed on any one declarations page. Accordingly, an additional declarations page, with an additional policy number, was produced for the fifth vehicle. However, there was no additional policy fee and the single vehicle on the “separate” policy was rated for a multi-car discount. Progressive produced evidence that even though there were two policy numbers, the polices were intended and treated as one. The Kelley court went through the evidence and concluded that the matter was improperly resolved on summary judgment because a fact issue was presented as to whether one or two polices were in existence. As such, the matter was remanded back to the trial court. The court did not address Progressive’s argument that a separate recovery was improper even if there were two policies by virtue of a “two or more auto policies” clause that states that an insured’s recovery cannot exceed “the highest applicable limit of liability under one policy” where one is insured under multiple polices, determining that the question was not yet ripe for adjudication. Pine Oak Builders, Inc. v. Great American Lloyds Insurance Co., 52 Tex. Sup. Ct. J. 348 (Tex. Feb. 13, 2009) Pine Oak Builders is the latest in a line of coverage cases involving construction defects and is notable because therein the court explicitly reaffirmed its decisions in three fairly controversial coverage cases it had decided in the last couple of years. The Pine Oak court first confirmed its holdings in Lamar Homes, Inc. v. Mid-Continent Casualty Co., 242 S.W.3d 1 (Tex. 2007) that (1) faulty workmanship claims against a homebuilder can constitute a potential “occurrence” of “property damage” under a standard CGL policy and (2) that an insurer’s breach of its duty to defend is subject to Texas’s Prompt Payment of Claims statute. It also confirmed its adoption in Don’s Building Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20 (Tex. 2008) of the “actual injury” rule for determining whether coverage is triggered under an occurrence-based liability policy. Finally, the Pine Oak court clarified its decision in GuideOne Elite Insurance Co. v. Fielder Road Baptist Church, 197 S.W.23d 305 (Tex. 2006), explaining that extrinsic evidence that contradicts the allegation of the underlying petition may not be considered in determining whether a defense obligation exists even when the extrinsic evidence is offered by the insured.

SPRING 2009 NEWSLETTER PRODUCTS LIABILITY UPDATE

admin — Wed, 01 Apr 2009 12:20:34 +0000

by Rocky Little

Brockert v. Wyeth Pharms., Inc., 2009 Tex. App. LEXIS 2546, opinion filed April 14, 2009 (Tex. App. – Houston). Brockert’s case against Wyeth Pharmaceuticals is based on the drug Prempro, which is a combination of estrogen and progestin to be used for treating menopausal symptoms and preventing osteoporosis while protecting against endometrial hyperplasia. Congress has delegated to the Food and Drug Administration (FDA) the authority to promulgate regulations to enforce the Food, Drug and Cosmetic Act. This includes prescription drug labeling regulations. Before a new drug can be marketed, the manufacturer must submit a New Drug Application (NDA) to the FDA. As part of the NDA, a manufacturer is required to provide proposed labeling. After a drug is approved, a manufacturer generally cannot change the labeling unless it first submits a supplemental application and obtains FDA approval for the revision. When there is newly acquired information based on a new analysis of previously submitted data, the labeling may be revised. During the FDA’s initial evaluation of Prempro, the risk of breast cancer was considered, and the FDA recognized the long latency period between exposure to Prempro and the eventual detection of tumors. Many years were needed before the relationship between Prempro and breast cancer could be definitively determined. Prempro was eventually approved by the FDA conditioned upon labeling that included language supplied by the FDA. One issue in this case is whether federal law preempts Brockert’s claim for design defect due to a failure to warn. The Harris County Court of Appeals held that federal law did not preempt state law claims because new information includes a new analysis of previously known data. In other words, initial approval by the FDA does not relieve a manufacturer from the duty to update its warning labels, when appropriate. Another issue addressed in the case is whether a safer alternative design can be proven by pointing to a substantially different product that has the same general purpose as the allegedly defective product. In this case, the plaintiff argued that Premarin was a safer design. However, the Court held that an alternative drug is not a safer design, but rather a different product. Merrell v. Wal-Mart Stores, Inc., 276 S.W.3d 117, (Tex. App – Texarkana, January 23, 2009). This strict products liability case involves a halogen torchiere lamp that allegedly caused a fire killing two people. The court noted that even though a product may have a safer alternative design, the product may not be unreasonably dangerous based on a risk utility analysis. The court also noted that a marketing defect exists even though the product is not otherwise flawed if the seller fails to warn of a dangerous characteristic of the product. Because the lamp at issue was a floor model, it was sold without a box or any warning labels or instructions. This case highlights the risk that a retailer takes when it sells unboxed products which do not include instructions and/or warning labels. Merck & Co. v. Garza, 277 S.W.3d 430 (Tex. App. – San Antonio, December 10, 2008). This case arose from the death of Garza allegedly as a result of taking Vioxx, a prescription medication manufactured by Merck. The San Antonio Court of Appeals noted that in a marketing defect case, a manufacturer is liable to a plaintiff if its failure to warn renders a product unreasonably dangerous, and the manufacturer’s failure to warn was a producing cause of the plaintiff’s injury. In cases of prescription drugs, the manufacturer is excused from warning each patient who receives the drug if the manufacturer properly warns the prescribing physician. The doctor stands as a learned intermediary between the manufacturer and the ultimate consumer. Even where the plaintiff proves that the warnings were inadequate, the plaintiff must still prove causation. In order to prove causation, the Plaintiff must show that a proper warning would have changed the decision of the doctor to prescribe the drug. In other words, the manufacturer of a prescription drug has a valid defense where the physician would have prescribed the medicine even with a proper warning. The court seemed to recognize the role of medical judgment in balancing the risks associated with using a particular medication. Driskill v. Ford Motor Co., 269 S.W.3d 199 (Tex. App. – Texarkana, October 17, 2008). The issue in this case was whether the speed-control deactivation switch in the car’s engine was defective causing the Lincoln Towncar to catch fire. The Texarkana Court of Appeals emphasizes the distinction between producing cause as opposed to proximate cause. In strict liability cases, producing cause is the legal standard, and has no requirement of foreseeability. Consistent with previous Texas Supreme Court holdings, the Texarkana Court of Appeals noted that proximate and producing cause are different in that proof of proximate cause entails a showing that the accident was foreseeable while producing cause is merely a but-for analysis. In other words, the accident would not have been caused but for the alleged defect. Bic Pen Corp. v. Carter, (Tex. App. – Corpus Christi-Edinburg, December 4, 2008). Following the Texas Supreme Court’s holding that the alleged design defect of a Bic cigarette lighter was preempted by federal law, this case was remanded to the Corpus Christi Court of Appeals to address the claims based on manufacturing defect. Among other things, the court noted that a child burn victim is not precluded from recovery against the manufacturer simply because the child was burned as a result of another child’s use of an allegedly defective child-resistant lighter. The court reiterated the causation standard in manufacturing defect cases as that of producing cause. In other words, but for the defect, the plaintiff would not have been injured, notwithstanding the fact that the use of the lighter was by a different child. Ebel v. Eli Lilly, 2009 U.S. App. LEXIS 6710, U.S. Court of Appeals for the 5th Circuit filed March 30, 2009. Ebel committed suicide allegedly as the result of taking Zyprexa, which is manufactured by Eli Lilly & Company. Ebel alleges that Eli Lilly failed to adequately warn of the risk of suicide. The U.S. Court of Appeals noted that the failure to warn is a producing cause of an injury if the alleged inadequacy caused the doctor to prescribe the drug for the patient. If, however, the prescribing physician was aware of the possible risk involved in the use of the product but decided to use it anyway, the adequacy of the warning is not a producing cause of the injury, and the plaintiff’s recovery must be denied. Even if the physician is not aware of a risk, the plaintiff must show that a proper warning would have changed the decision of the treating physician, i.e., that but for the inadequate warning, the treating physician would not have prescribed the product. In this case, Ebel presented no evidence to suggest that Dr. Net would have changed either his decision to prescribe Zyprexa or his risk-benefit analysis had he received some alternative warning. Indeed, the record indicates that Zyprexa was perceived to be the last remaining treatment option available to Ebel after he had tried about 45 other medicines to treat his severe intractable headaches.

SPRING 2009 NEWSLETTER PREMISES LIABILITY UPDATE

admin — Wed, 01 Apr 2009 12:22:12 +0000

by Dean Foster

Weiss v. Tucker, No. 03-08-00088-CV, 2009 Tex.App.—Lexis 2061, March 27, 2009 Plaintiff was a patron at the North By Northwest Restaurant when a custom built light fixture fell from the dining room ceiling onto her head and shoulders, causing severe injury. The light fixture, which weighed 100 pounds, had been suspended from the ceiling using a ceiling fan mounting kit rated for a maximum load of 40 pounds. It was undisputed that the light fixture fell because the mounting bracket failed to support the weight. Plaintiff brought several claims against the restaurant owners under premises defect, negligent hiring, and products liability theories. With respect to the premises defect cause of action, Plaintiff alleged that the restaurant owners failed to exercise ordinary care to reduce or eliminate the risk of harm posed by the light fixture, and failed to properly inspect the premises in order to discover the light fixture’s unsafe condition. The restaurant owners filed a Traditional and No-Evidence Motion for Summary Judgment. In their Traditional Motion, the restaurant owners argued that they did not have a right to control and did not exercise control over the design of the failed mounting bracket or the installation of the light fixture. They further argued that Plaintiff could not prove they had notice of the defect or that they had failed to exercise reasonable care to eliminate the risk posed by the insufficient bracket. In their No-Evidence Motion, the restaurant owners argued that Plaintiff had no evidence to support any of the elements of a premises liability claim. Upon hearing, the trial court granted the restaurant owners’ Motion for Summary Judgment and severed Plaintiff’s claims against the restaurant owners. Plaintiff appealed. Plaintiff argued that summary judgment should not have been granted in favor of the restaurant because a genuine issue of material fact had been raised as to whether or not the restaurant owners controlled whoever installed the light fixture. The court stated that much like a general contractor, “an owner or occupier of the land does not owe any duty to insure that an independent contractor performs his work in a safe manner.” However, a duty may arise if the employer retains some control over the manner in which the independent contractor’s work is performed. If such duty does arise, it is commensurate with the control that the owner retains. Therefore, it is not enough to show that the Defendant controlled one aspect of the independent contractor’s activities if the injury arose from another. As a result, in order to defeat the restaurant owners’ No-Evidence Motion for Summary Judgment, Plaintiff had to produce more than a scintilla of evidence that the restaurant owners controlled the activity from which her injury arose, specifically the installation of the light fixture. The court held that Plaintiff failed to meet this burden. The evidence showed only that the restaurant owners exercised control over the design and fabrication of the light fixture. The evidence only showed that the restaurant owners made the decision to use custom lights and approved the lighting design and fixture proto type. Plaintiff produced no evidence that the restaurant owners had any control over the actual installation of the light fixture. The trial court’s granting of the restaurant owners’ Motion for Summary Judgment was therefore affirmed. Fort Brown Villas Condominium Association, Inc. v. Gillenwater, 2009 Tex. Lexis 125 (April 17, 2009). In this premises liability case, the court decided whether or not Texas Rule of Civil Procedure 193.6, which provides for the exclusion of evidence due to an untimely response to a discovery request, applies in a summary judgment proceeding. The court held that the rule does apply and therefore reversed the Court of Appeals’ Judgment. Plaintiff rented a condominium at the Fort Brown Condo Shares in Brownsville, Texas. While visiting the swimming pool, Plaintiff attempted to sit down in a poolside chair. As he lowered himself into the chair, the tip of his right ring finger was severed by what Plaintiff alleged to be a broken weld on the chair’s frame. Plaintiff filed a premises liability claim against Fort Brown. The parties entered into, and the trial court approved, an Agreed Level 3 Scheduling Order, which set August 19, 2005 as the deadline for expert disclosures. Fort Brown subsequently agreed to two extensions of the expert disclosure deadline. Plaintiff failed to disclose an expert by any of these deadlines. Following the expiration of the deadlines, Fort Brown filed a No-Evidence Motion for Summary Judgment alleging that Plaintiff presented no evidence that the condition of the chair posed an unreasonable risk of harm or that Fort Brown knew or reasonably should have known of any danger presented by the chair. Plaintiff’s response to this Motion for Summary Judgment included an affidavit from a previously undisclosed expert. Fort Brown objected to the offered summary judgment evidence, arguing that the expert was not timely disclosed under the Scheduling Order and that regardless of the Scheduling Order’s application, the expert’s affidavit was conclusory. In response, Plaintiff argued that the offered expert’s affidavit was competent summary judgment evidence and that Texas Rule of Civil Procedure 193.6 did not apply in a summary judgment setting. The trial court sustained Fort Brown’s objections, excluded the expert’s affidavit, and granted the No-Evidence Motion for Summary Judgment. The Court of Appeals reversed, holding that the trial court abused its discretion in striking the expert’s affidavit because Rule 193.6 did not apply in a summary judgment proceeding. The Court of Appeals also held that the expert’s affidavit was not conclusory and that it was sufficient evidence to preclude summary judgment. Under Rule 193.6, discovery that is not timely disclosed and witnesses that are not timely identified are inadmissible as evidence. The party who fails to timely designate an expert has the burden of establishing good cause or lack of unfair surprise or prejudice before the trial court may admit the evidence. In this case, Plaintiff did not timely disclose his expert pursuant to a deadline provided in the Agreed Scheduling Order and subsequent extension agreements. The Supreme Court held that the trial court did not abuse its discretion in striking Plaintiff’s expert’s affidavit, and Plaintiff failed to establish good cause or lack of unfair surprise or prejudice as to Fort Brown. Plaintiff did not designate his expert until three days before the end of discovery and more than five months after the expert designation deadline. Because the court determined the expert’s affidavit was inadmissible, it did not consider whether the affidavit was conclusory.

SPRING 2009 NEWSLETTER COMMERCIAL TRUCKING LITIGATION UPDATE

admin — Wed, 01 Apr 2009 12:24:03 +0000

by Dean Foster

Montemayor v. Heartland Transportation, Inc., No. B-07-CV-151, 2008 U.S. Dist. Lexis 88990 (S.D.Tex. October 30, 2008) At approximately 3:30 a.m. on May 6, 2006, a tractor/trailer driven by Walter Wilcoxon collided with a parked tractor/trailer at a truck stop in Huntsville, Texas. Plaintiff Montemayor was sleeping in the parked tractor/trailer and alleges he suffered serious injuries as a result of the collision. At the time of the accident, Wilcoxon was driving for Heartland Transportation, Inc. Prior to his employment with Heartland, Wilcoxon had been involved in one wreck and had received at least 13 traffic citations. From November, 2005 to May 3, 2006, while an employee of Hartland, Wilcoxon was involved in three more wrecks. Sometime after the May 3rd wreck, but before the May 6th accident with Plaintiff, Heartland’s Safety Director decided to fire Wilcoxon. After having decided to fire Wilcoxon, the Safety Director ordered the dispatcher to have Wilcoxon pick up an additional load, deliver it, and return to headquarters. Shortly thereafter, on May 6th, Wilcoxon collided with Plaintiff while delivering this “last” load. On May 9th, Wilcoxon returned to Heartland’s headquarters and was fired. Plaintiff filed suit on October 1, 2007. Plaintiff brought claims against Heartland for general negligence, negligent entrustment, and gross negligence. Defendant Heartland filed a Motion for Partial Summary Judgment as to Plaintiff’s claims of gross negligence in hiring, qualifying, supervising, and retaining Wilcoxon as a driver. A plaintiff may recover exemplary damages only if “he or she (proves by clear and convincing evidence that the harm with respect to which the claimant seeks recovery of exemplary damages results from: (1) fraud; (2) malice; or (3) gross negligence.” Tex.Civ.Prac.&Rem. Code §41.003(a). The definition of gross negligence consists of two tests, an objective test and a subjective test, both of which must be satisfied to sustain a claim for gross negligence. Regarding the objective test, Heartland argued that the evidence detailing Mr. Wilcoxon’s driving history did not show that Heartland knew Mr. Wilcoxon would “in all probability, severely injure another driver.” Regarding the subjective test, Heartland argued that the evidence showed that Heartland did care about and scrutinize Wilcoxon’s driving record, and that before the collision with Plaintiff occurred, Heartland “took measures to protect drivers like Mr. Montemayor by deciding to end Wilcoxon’s employment.” The issue the court was faced with was whether the Plaintiff had failed to produce evidence sufficient to meet his summary judgment burden on his gross negligence claim as a matter of law. The court held that Plaintiff had produced sufficient evidence concerning both the objective and subjective tests of a gross negligence claim. The court determined that a jury could find by clear and convincing evidence that, viewed objectively from Heartland’s standpoint, the decision of Heartland’s Safety Director to retain Wilcoxon as a driver despite the evidence of his driving record involved an extreme degree of risk, considering the probability and magnitude of the potential harm to others. In addition, the court found that Heartland’s Safety Director had actual, subjective awareness of the risk involved, but nevertheless proceeded in conscious indifference to the rights, safety, or welfare of others. While the court noted that as a result of his care and scrutiny, Heartland’s Safety Director took measures to protect other drivers like Mr. Montemayor by deciding to end Wilcoxon’s employment, but not before dispatching Wilcoxon with one more load. As a result Plaintiff’s gross negligence claims survived Defendant’s Motion for Summary Judgment. In Re Swift Transportation Company, Inc., No. 5-08-01377-CV, 2009 Tex.App. – Lexis 435 (January 23, 2009) Swift is an interstate transportation company. In 2007, Swift and Carlus McDougle entered into a Contractor Agreement for McDougle to transport freight for Swift as an independent contractor. On the same day, McDougle also signed a Mentor Addendum under which he agreed to serve as one of Swift’s mentor drivers, training Swift’s employee drivers. Several months later, while McDougle was riding as a passenger and serving as a mentor to a Swift employee, the employee lost control of the tractor/trailer and hit an oncoming tractor/trailer. The employee was killed and McDougle was injured. McDougle filed suit against Swift and the employee’s estate, asserting claims against Swift for Swift’s alleged negligence and for vicarious liability for the employee’s alleged negligence. Swift moved to abate the suit and compel arbitration under the terms of the Contractor Agreement. In response, McDougle argued that his claims against Swift were not subject to the arbitration clause in the Contractor Agreement because his claims were strictly ordinary negligence claims related to another’s operation of a motor vehicle and not claims arising under or relating to his contract with Swift or the relationship created by it. The trial court denied the Motion to Abate and Compel Arbitration. The trial court based its decision on the conclusion that the Mentor Addendum was not a part of the contractor agreement. The Court of Appeals disagreed with that conclusion, noting that the Mentor Addendum was signed by McDougle, as required by the contractor agreement, and the addendum was expressly referenced in the Contractor Agreement. Therefore, the Court of Appeals concluded that the Mentor Addendum was a part of and must be construed with the contractor agreement. The Contractor Agreement called for the arbitration of “all disputes and claims arising under, arising out of or relating to this agreement.” The Dallas Court of Appeals did not find any Texas law addressing whether or not an agreement to arbitrate claims “arising out or relating to the relationship created by” an agreement would require the parties to arbitrate personal injury claims such as the ones at issue in this lawsuit. However, the court did cite a Pennsylvania case involving a similarly worded arbitration clause in which the court concluded all three of the plaintiff’s claims, including his tort claim for intentional infliction of emotional distress, were covered by the arbitration clause. As a result, the Dallas Court of Appeals agreed with Swift that the phrase “arising out of or relating to the relationship created by the agreement” was a sufficiently broad provision that would include within its scope McDougle’s tort claims. The trial court was therefore instructed to issue an order granting the Motion to Abate and Compel Arbitration.

SPRING 2009 NEWSLETTER SUCCESSES, VICTORIES and OTHER NEWS

admin — Wed, 01 Apr 2009 12:27:42 +0000

Fanning Harper Martinson Brandt & Kutchin, P.C. is pleased to provide you with our Spring 2009 Newsletter. Below you will find information regarding successes and activities in which our attorneys have recently been involved. Please click on the hyperlinks to find interesting updates for issues relating to Commercial Trucking Litigation, Premises Liability, Texas Supreme Court—Insurance Law, Civil Rights, Local Government, Employment and Products Liability law. If you would like additional information regarding these updates, please contact the writers at 214-369-1300.

SUCCESSES, VICTORIES and OTHER NEWS

Marc Fanning was granted a Motion for Summary Judgment in a trip and fall case where the Plaintiff lied about a stock cart being rolled up in back of her by the store employees. Testimony was obtained from her eleven year old son that his mother was not telling the truth about how the accident happened. Her attorneys immediately withdrew from the case, and the judgment was obtained dismissing her case. The Fifth Circuit Court of Appeals affirmed the U. S. Eastern District Court’s dismissal of the McKinney Police Department and the unserved police officers in Jermaine Watts v. S. Smart, et al. Thomas P. Brandt and John F. Roehm III represented the McKinney Police Department. The Fifth Circuit Court of Appeals affirmed the Eastern District Court’s granting of summary judgment to McKinney Police Officer Jose Quiles and dismissal of the state law claims against the City of McKinney in John Quinn v. John Roach, et al. Thomas P. Brandt and John F. Roehm III represented Officer Quiles and the City of McKinney in this matter. Thomas P. Brandt and Frank Valenzuela obtained a summary judgment for Hunt County, Texas in Britton v. County of Hunt, Texas in the United States District Court for the Northern District of Texas, Dallas Division. The plaintiff brought age discrimination and retaliation claims under the Age Discrimination in Employment Act against the County because she was asked to resign or be terminated. FHMBK argued that the County had legitimate, non-discriminatory, non-retaliatory reasons for asking the plaintiff to resign and that the plaintiff could not establish a prima facie case of retaliation. The district court granted summary judgment. Thomas P. Brandt and Joshua A. Skinner obtained dismissal for two police officers in Poteet v. Sullivan in the 367th District Court, Denton County. The plaintiff alleged that the officers violated his Fourth Amendment right to be free of unreasonable searches and seizures during the course of a domestic violence civil standby. The Keller ISD Board of Trustees selected Fanning Harper Martinson Brandt & Kutchin, P.C. as an approved counsel for school operations. The firm was recommended to the board by a committee of administrators who reviewed numerous applicant firms in a competitive bidding process. FHMB&K looks forward to working with Keller ISD. Joshua A. Skinner recently guest lectured at the University of Dallas for a graduate course in administrative law.

FALL 2009 NEWSLETTER EMPLOYMENT LAW UPDATE

admin — Mon, 21 Sep 2009 01:34:25 +0000

by Francisco J. Valenzuela

United States Supreme Court

AT&T Corp v. Hulteen, __ U.S. __, 129 S.Ct. 1962 (2009) An employer who calculates and pays benefits as part of a bona fide seniority system based on past completed events that were entirely lawful at the time that they occurred does not violate the Pregnancy Discrimination Act (PDA), even if the PDA now makes those past events unlawful. In the 1960s and 1970s, AT&T employee leave for pregnancy was considered a personal leave of absence which only entitled an employee up to 30 days worth of credit toward the employee’s pension. In 1978, Congress passed the PDA making it discriminatory to treat pregnancy related conditions worse than other medical conditions. On the PDA’s effective date, AT&T changed its benefits plan to provide service credit for pregnancy leave on the same basis as leave taken for other temporary disabilities. AT&T made no retroactive adjustments for its pre-PDA policies. A seniority system does not necessarily violate Title VII when it gives current effect to rules that operated prior to the PDA. Differences in benefits produced by a bona fide seniority based pension plan are permitted unless they are the result of an intention to discriminate. Because AT&T’s accrual system operating prior to the PDA was found, at the time, to not be sex discrimination, calculations based on the then-legal distinctions do not violate the PDA. Gross v. FBL Financial Services, Inc., __ U.S. __, 129 S.Ct. 2343 (2009) A plaintiff asserting a claim of age discrimination in violation of the Age Discrimination in Employment Act (“ADEA”) must show that “but for” his age, he would not have suffered an adverse employment action. A plaintiff cannot prevail if he only shows that his age was a motivating factor in the imposition of an adverse employment action. In reaching its decision, the Court examined the ADEA’s text, which prohibits discrimination against an employee “because” of the employee’s age. The Court understood this to mean that age must be the reason for the employer’s decision. Consequently, a plaintiff must show by a preponderance of the evidence that his age was the “but for” cause of an employer’s decision. Ricci v. Destefano, __ U.S. __, 129 S.Ct. 2658 (2009) Under Title VII, an employer may not make a race-based decision to scuttle an employment test, unless the employee can demonstrate a strong basis in evidence that, had it not made the race-based decision, it would have been liable under a disparate impact claim. In this much-publicized “firefighter case,” the City of New Haven required applicants for promotions within the fire department to take an examination as part of the promotion process. The City hired a company which specialized in preparing promotion examinations. The examination company worked meticulously to prepare a properly tailored examination and deliberately over sampled minority firefighters to ensure that test results would not unintentionally favor white firefighters. After the promotion examination was given, the test results evidenced a difference between how white firefighters and minority firefighters performed on the exam. After numerous meetings, the City chose, with little more than statistical evidence, to scuttle the exam, at least in part because of a fear that it would face a disparate impact lawsuit. Title VII prohibits both disparate treatment and disparate impact discrimination. Disparate treatment discrimination means intentionally making employment decisions based on an individual’s race. Disparate impact discrimination means having a neutral policy that does not intentionally discriminate, but its results evidence an unintentional discrimination by causing minorities to score significantly worse than Caucasians, for example. The Court began its analysis with the understanding that the City had engaged in disparate treatment race discrimination in deciding to scuttle its established test for racial reasons. The question the Court had to decide is whether the City’s decision was excused by the defense that had it not scuttled the test, it would have faced a disparate impact law suit. To decide the case, the Court adopted the “strong basis in evidence” standard. Employees must now demonstrate that they have a strong basis in evidence that a test was inadequate and would result in disparate impact liability. In the Ricci case, the Court looked to the elements of a disparate impact claim to determine if the City had a strong basis in evidence to scuttle the test. The Court found that the City was faced with a prima facie case of disparate impact discrimination (i.e., statistical disparity), but held that a prima facie case alone does not constitute a strong basis in evidence. The Court proceeded to examine whether the test was job related and consistent with business necessity and whether a viable alternative test existed that the City refused to adopt (the remaining elements of a disparate impact claim). The Court found that the test was job related and that no alternative test was refused by the City, and, therefore, that the City did not have a strong basis in evidence to believe that it would face liability for disparate impact discrimination. It should also be noted that the Court expressly stated that if, after a city certifies test results, it faces a disparate impact suit, a city “would avoid disparate-impact liability based on the strong basis in evidence that, if it had not certified the results, it would have been subject to disparate-treatment liability.”

U.S. Court of Appeals for the Fifth Circuit

Stone v. UNOCAL Termination Allowance Plan, 570 F.3d 252 (5th Cir. 2009) A plan administrator and appeals committee who engaged in a fair reading of an employee benefits plan and correctly concluded that the plaintiff had not been constructively discharged (as defined), had reached an interpretation that was legally correct and, therefore, could not have abused their discretion in denying the plaintiff’s benefits claim. Because the plan in question allowed the appeals committee discretionary authority to construe and apply the plan, the Court of Appeals reviewed the committee’s decision under an abuse of discretion standard. In applying such a standard, the court first looks at whether the administrator and committee’s determinations were legally correct. If their determination was legally correct, then there was no abuse of discretion. If legally incorrect, then the court must determine whether the administrator’s decision was an abuse of discretion and whether the administrator operated under a conflict of interest. To determine whether an interpretation is legally correct, the court will look to whether the administrator gave the plan a uniform construction, whether the interpretation is consistent with a fair reading of the plan, and “‘any unanticipated costs resulting from different interpretations of the plan.’” The court found that the plaintiff did not point to any similarly situated individuals whose constructive discharge claims were treated differently and, therefore, that the administrator uniformly construed and applied the plan. After reviewing the language of the plan, the court concluded that the administrator had engaged in a fair reading of the plan and correctly concluded that the plaintiff had not been constructively discharged. The court held that the administrator and committee’s interpretation of the plan was legally correct and that they could not have abused their discretion. Simpson v. Empire Truck Lines, Inc., 571 F.3d 475 (5th Cir. 2009) A tractor-trailer driver, (1) who has no claim to employee status based on his working relationship with a motor-carrier that hired his employer and (2) whose employer’s lease agreement with the motor carrier denies such a relationship, is not an employee of the motor-carrier for purposes of the Texas Workers Compensation Act (TWCA). Empire Truck Lines entered into a lease agreement with Rodgers Trucking to transport items pursuant to Empire’s contract with UPS. Rodgers Trucking supplied the tractor trailer and the drivers, including Simpson (the plaintiff). Simpson was injured while working and filed suit asserting that an employee relationship existed with Empire and, because Empire did not have workers compensation insurance, that he could sue them for negligence under the TWCA. The court analyzed the TWCA and found that, because of the lease agreement between Empire and Rodgers providing that Rodgers assumed the responsibility of an employer, Simpson was not entitled to assert a claim against Empire under the TWCA. Simpson argued, however, that the Federal Motor Carrier Safety Regulations (FMCSR) preempts the TWCA on this issue. After examining federal statutory law and the FMCSR, the court concluded that federal law did not preempt the TWCA by creating an employer-employee relationship in this context. Lee v. Kansas City Southern Railway Co., __ F.3d __, 2009 U.S. App. LEXIS 14336 (5th Cir. 2009) An African American employee asserting a race discrimination claim under Title VII establishes a prima facie case of race discrimination by listing a non-African American employee as being similarly situated who had “essentially comparable violation histories” and who had the same ultimate decisionmaker as to disciplinary action, even if the two men did not have the same immediate supervisor. Lee, the plaintiff, was fired for disregarding a block signal indicating that he had to stop the train and for failing to contact the dispatcher for authorization to proceed. Six months before those violations, Lee failed to slow his train in compliance with a signal (for which he was suspended for 30 days), and eighteen months prior to the violations for which he was fired, Lee committed another moving violation (for which he received a five day suspension). Based on Lee’s record for those eighteen months, Lee’s supervisor chose to fire Lee and the railroad’s director of labor relations did not grant Lee any leniency. Around the time of Lee’s termination, the non-African American employee who Lee offered as a comparator failed to halt his train at a stop signal and was fired, but the director of labor relations granted him lenience and reinstated him. The court found that the non-African American employee, who performed the same job as Lee, had a similar number of moving violations as Lee during approximately the same period of time. The non-African American employee had failed to inspect a train in compliance with a warning signal (for which he was suspended for 30 days), improperly handled a train which separated as a result (for which he was suspended for five days), and occupied a main track without authority (for which he was fired, but then reinstated, by the director of labor relations). The court found that Lee and the non-African American employee both shared the same job, had a comparable record of violations, and that they were treated differently by the ultimate decisionmaker (i.e. the non-African American employee was shown leniency), even though they did not share the same direct supervisor. This was sufficient to establish a prima facie case of discrimination. Castellanos-Contreras v. Decatur Hotels LLC, __ F.3d __, 2009 U.S. App. LEXIS 16105 (5th Cir. 2009) The Fair Labor Standards Act (FLSA) does not require an employer to reimburse recruitment expenses, transportation expenses, or visa expenses incurred by guest workers before they are relocated to the employer’s location. After Hurricane Katrina, Decatur, the owner of luxury hotels in New Orleans, desperately needed persons to work as employees in their hotels. Victoria Pickering owned a company that guided American employers through the process of becoming H-2B visa sponsors to hire foreign workers to fill temporary job positions. Pickering contacted Decatur. When the guest workers were hired, Decatur paid its new employees at the agreed-to, legal rate, but it did not reimburse the guest workers for recruitment, transportation, or visa expenses that they incurred before relocating to the United States. The court held that while guest workers are entitled to FLSA protection, employers are not required to pay these expenses incurred by their employees. In regards to the visa expenses, the court found that Decatur was not shifting its business expenses to its guest workers by not reimbursing them for the visa expenses. Also, the court specifically found that the FLSA does not obligate Decatur to reimburse guest workers for inbound transportation expenses or for fees they incurred with foreign recruitment expenses. Ikossi-Anastasiou v. Bd. of Supervisors of La. State Univ., __ F.3d __, 2009 U.S. App. LEXIS 18552 (5th Cir. 2009). Former employees are covered by Title VII and, therefore, can bring claims for allegedly retaliatory adverse employment actions occurring after employment was terminated. Ikossi was a professor at LSU. In August of 1998 (after the end of her sabbatical), Ikossi sent a letter to her department chair requesting “personal leave” in order to care for the health of a family member, and she was granted twelve (12) weeks under the FMLA. Ikossi replied acknowledging that her leave would expire in mid-semester and, “‘to facilitate the department teaching plans,’” she was requesting additional leave through the Spring semester. Her (male) department head extended her unpaid leave only through the remainder of the Fall semester due to a shortage of faculty and an enormous teaching load. In January of 1999, Ikossi again requested unpaid leave for the remainder of the academic year, but she was denied and told that if she did not resume her teaching duties, LSU would consider that she had abandoned her teaching position. Several more letters were exchanged, including one indicating that LSU understood her to have abandoned her position, and that LSU had learned that she had taken a full time position with the U.S. Navy while on sabbatical, a violation of the terms of her sabbatical. The letter indicated that LSU would determine how much reimbursement Ikossi would owe LSU. Ikossi replied that the author had never addressed her complaints of discrimination in the past and that his letter was just a continuation of the disparate treatment she had suffered. A subsequent letter from LSU’s attorney requested settlement of the amount Ikossi allegedly owed LSU or LSU would formally demand reimbursement of about $42,000 in sabbatical pay. In November of 2000, Ikossi brought suit alleging discrimination and retaliation under Title VII, Title IX, state law, and the Equal Pay Act. The court found that the only claim that was not time-barred was Ikossi’s retaliation claim. Ikossi argued that LSU’s January 1999 demand for repayment of the sabbatical salary was in retaliation for her complaint that she had been denied leave on the basis of her sex. In response, LSU argued that the adverse acts occurred after Ikossi was no longer an employee, that former employees are not covered by Title VII, and that the demand was part of a settlement discussion whose admission is barred by Federal Rule of Evidence 408. The court held that under U.S. Supreme Court precedent, Title VII does apply to former employees and that the January 1999 letter was not part of settlement negotiations. Because the January 1999 letter was within the 300 day window of September 16, 1999 to assert Title VII claims with the EEOC, her retaliation claim was not time-barred.

Texas Supreme Court

City of DeSoto v. White, __ S.W.3d __, 2009 Tex. LEXIS 395 (Tex. 2009) The failure to provide mandatory notice to a suspended officer that by choosing to appeal his suspension to an independent hearing examiner, instead of to the Civil Service Commission, that he was thereby limiting his ability to seek further appellate review with a district court, did not deprive the hearing examiner of jurisdiction to hear the officer’s appeal. White was a police officer for the City of DeSoto police department. He was suspended for improper conduct, and the police chief delivered a letter to White placing him on indefinite suspension for various improper actions. The letter contained all of the items it was statutorily required to contain, with the exception that it did not indicate that an appeal to a hearing examiner (instead of the Civil Service Commission) would not allow him to further appeal the examiner’s decision to a district court except on the grounds that the panel was without jurisdiction, exceeded its jurisdiction, or that the order was procured by fraud, collusion, or other unlawful means. The court began its analysis with the presumption that the Legislature did not intend to make the notice at issue jurisdictional. The court found that while the notice provision was mandatory, the law does not contain any explicit language indicating that it was a prerequisite to suit or appeal and, therefore, not jurisdictional. The court did not find a specific consequence for noncompliance. The court also looked to the consequences resulting from each possible interpretation, and found that the interpretation of the notice provision as being jurisdictional could not have been what the Legislature intended because it would have the effect of reinstating an officer who was considered to have committed various acts of misconduct. In light of the mandatory, though not jurisdictional, nature of the notice provision, the court held that the case should be abated to cure the notice omission, allow proper notice to be provided, and allow White an opportunity to make his decision with full knowledge of the consequences of each path. Nabors Drilling, U.S.A., Inc. v. Escoto, __ S.W.3d __, 2009 Tex. LEXIS 394 (Tex. 2009) An employer has no duty to prevent injury due to the fatigue of its off-duty employee or to train employees about the dangers of fatigue. Robert Ambriz worked for Nabors Drilling in its oil fields. At 6:00 A.M., Ambriz finished his shift and left the field ten minutes later. At about 6:30 A.M., Ambriz fell asleep while driving and collided with another vehicle, killing everyone in both vehicles. Family members of those individuals killed in the accident brought suit against Nabors Drilling and Ambriz for negligence. Generally, an employer is not liable for torts committed by its off-duty employees, except when the torts were committed on the employer’s premises or with its chattels. The court has found exceptions to this general doctrine when an employer “affirmatively exercised control over its employee because of that employee’s incapacity,…, and when an employer required its employees to consume alcohol to the point of intoxication while working.” The court found, however, that neither of these exceptions apply to impose a duty on Nabors Drilling in the context of this case. There was no evidence that Nabors Drilling knew of any incapacity that Ambriz may have exhibited, and the evidence in the record indicated that Ambriz was not exhibiting any incapacity, that Ambriz never complained about fatigue, did not have trouble staying awake while driving, and stayed in trailers Nabors Drilling provided when he thought that he was too tired to drive. Even assuming that Nabors Drilling had knowledge of Ambriz’s incapacity, it did not exercise any post-incapacity control over Ambriz. Nabors Drilling’s only control was in establishing work conditions and setting the schedule, both of which occurred before Ambriz’s incapacity. Nabors Drilling did nothing to affirmatively create a risk of fatigue-related, off-duty accidents. The court also found that Nabors Drilling did not owe a duty to train employees about employment risks that are commonly known or already understood by the employee, both of which appeared to be the case in this matter. State of Texas v. Lueck, __ S.W.3d __, 2009 Tex. LEXIS 458 (Tex. 2009) An employee’s e-mail that warned of regulatory non-compliance, not a violation of law, and that was sent to his agency supervisor, not an appropriate law enforcement authority, does not establish a claim under the Texas Whistleblower Act. Lueck worked for the Texas Department of Transportation as the Assistant Director of its Traffic Analysis Section. When an agency supervisor suspended all work on a project, Lueck sent him an e-mail warning that TxDOT would never be in regulatory compliance without the project that had been cancelled by the supervisor. Lueck recommended that the supervisor have his e-mail “readily available” when the supervisor discussed the project with another TxDOT division. TxDOT fired Lueck because of his support for the project, reasoning that with Lueck’s knowledge of the project’s problems, his support for it evidenced negligence and lack of trustworthiness. Lueck sued the State and TxDOT under the Whistleblower Act pleading that he sent an email concerning future regulatory non-compliance to his supervisor. The court held that, because Lueck did not report a violation of law and because his supervisor was not a “law enforcement authority”, his suit was not properly under the Whistleblower Act. Because Lueck’s suit was not properly under the Whistleblower Act, there was no waiver of sovereign immunity for his erroneously pled Whistleblower claims and, therefore, the court lacked subject matter jurisdiction over the lawsuit. The court held that it was proper for the State to file a plea to the jurisdiction to assert its sovereign immunity from suit even when the court had to examine evidence to resolve the jurisdictional issue, because the facts underlying the merits and the court’s subject matter jurisdiction were intertwined. The court held that the elements of a Whistleblower claim “can be considered as jurisdictional facts, when it is necessary to resolve whether a plaintiff has alleged a violation under the [Whistleblower] Act.” The elements can be considered to determine both jurisdiction and liability.

FALL 2009 NEWSLETTER SCHOOL LAW UPDATE

admin — Wed, 21 Oct 2009 01:37:03 +0000

By John Husted

United States Supreme Court

Safford Unified School District v. Redding, __ U.S. __, 129 S. Ct. 174 (June 25, 2009) A strip search that goes beyond a search of outer clothing and belongings of a student under suspicion of possessing certain drugs violates the Fourth Amendment when the facts do not indicate that the drugs presented a danger by their power or quantity to students or that the drugs were concealed in the student’s underwear. The school’s policies strictly prohibited the nonmedical use, possession, or sale of any drug on school grounds. Another student reported that Redding, a 13-year-old girl, had been giving certain pain-relief pills to fellow students. After an initial search of her backpack turned up nothing, the assistant principle had the school nurse conduct a strip search. Redding’s mother filed suit alleging the strip search violated Redding’s Fourth Amendment rights. The strip search of Redding due to the suspicion of pill distribution was unreasonable and a violation of the Fourth Amendment where the principal knew the pills were common pain relievers, and any indication of danger to the students due to the quantity or power of the drugs and any reason to suppose the student was carrying pills in her underwear were missing. The search of Redding’s underwear violated the Fourth Amendment; however, the administrators and nurse were protected from liability by qualified immunity, because there was reason to question the clarity with which the Fourth Amendment right was established. Forest Grove School District v. T. A., __ U.S. __, 129 S. Ct. 2484 (June 22, 2009) Under the Individuals with Disabilities Education Act (IDEA), reimbursement to parents for private special-education services is authorized when a public school fails to provide a free appropriate public education (FAPE), and placement in a private-school can be appropriate, regardless of whether the child previously received special-education services through the public school. When T.A. was diagnosed with learning disabilities, his parents unilaterally removed him from the public school district, enrolled him in a private academy, and requested an administrative hearing on his eligibility for special-education services under IDEA. The school district found them ineligible and declined to offer him an individualized education program. Pursuant to an administrative review, the school district was ordered to reimburse the parents, but the district court set aside the award, holding that IDEA Amendments barred reimbursement unless the child had previously received special education or related services from the school. Affirming the Ninth Circuit, the Court found that when a school district fails to provide a FAPE and private placement is suitable, all relevant factors should be considered. As the district court did not properly consider the equities in the case, the Court remanded.

Fifth Circuit Court of Appeals

Palmer v. Waxahachie Independent School District., __ F.3d __, 2009 U.S. App LEXIS 18057 (5th Cir. Aug. 13, 2009) A school dress code that generally prohibits shirts containing messages is constitutionally content-neutral even though it does not prohibit stickers, pins, buttons, and wristbands containing messages, nor shirts containing messages that promote school organizations and school spirit and Palmer, a student at Waxahachie High School, brought a free speech case after the administration told Palmer the three shirts he submitted for approval under the dress code could not be worn to school. The dress code did not allow shirts with printed messages unless they were in connection with the school, though pins, buttons, sticker or wrist bands were not banned. Palmer submitted a t-shirt that read: “John Edwards for President ‘08”, a John Edwards for President polo shirt, and a t-shirt with “Freedom of Speech” on the front and the text of the First Amendment on the back. The court clarified that student speech can be regulated so long as the regulation is viewpoint-neutral and content-neutral. Despite the fact that shirts that promote school clubs, organizations, athletic teams, or “school spirit” were allowed, the code was content-neutral, because it was not attempting to suppress any student expression. Therefore, the court applied intermediate scrutiny, giving great deference to the administrators’ explanations of sufficiently important governmental interest. Further, the court found that the code does not restrict student dress outside of school and provides some means to communicate their speech during school. Therefore, the court affirmed the order denying a preliminary injunction.

FALL 2009 NEWSLETTER LOCAL GOVERNMENT LAW UPDATE

admin — Wed, 21 Oct 2009 01:44:32 +0000

by Joshua Skinner

United States Supreme Court

Northwest Austin Mun. Util. District No. One v. Holder, __ U.S. __, 129 S. Ct. 2504 (June 22, 2009) All local government entities are entitled to request bailout or exemption from the restrictions on election procedure imposed by Section 5 of the Voting Rights Act. Texas is a covered jurisdiction under the federal Voting Rights Act. As a result, all local governments in Texas are required to comply with Section 5 of the Act, which prohibits all changes to election procedure until those procedures are submitted to and approved by a three-judge Federal District Court in Washington, D.C., or the Attorney General. Entities subject to the Act may, however, seek to bailout of the Section 5 requirements by filing a claim with the three-judge Federal District Court. Northwest Austin Municipal Utility District No. One (“Northwest”) sought to bailout of the Act or, alternatively, requested that the court hold that Section 5 of the Act is unconstitutional. The three-judge court denied both requests, holding that Section 5 was constitutional and that Northwest was not the kind of political subdivision that could seek bailout. The Supreme Court held that Northwest is entitled to seek bailout from the restriction imposed by Section 5 of the Act. The Supreme Court declined to address whether Section 5 was constitutional, but noted that there is a substantial question regarding its constitutionality in light of the changed circumstances in the country since the Act was enacted over forty years ago. Ashcroft v. Iqbal, __ U.S. __, 129 S. Ct. 1937 (May 18, 2009) Civil rights claimants must meet the pleadings standard enunciated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), by showing that their factual allegations establish plausible claims. Also, when a public official asserts qualified immunity in a motion to dismiss, all discovery in the case should be stayed. Iqbal was arrested by federal officials in the wake of the September 11th attacks on criminal charges. After his conviction and eventual release, Iqbal brought suit against Ashcroft and other senior federal governmental officials alleging that they adopted an unconstitutional policy that subjected him to harsh conditions of confinement on account of his race, religion, or national origin. The defendants moved to dismiss the claims based on qualified immunity, but the trial court denied the motion. The court of appeals affirmed, concluding that the Supreme Court’s recent decision in Twombly did not apply. The Supreme Court held that all civil complaints, including those alleging civil rights or constitutional violations, must meet the new standard set forth in Twombly. In particular, the allegations in complaints must be sufficiently detailed that they allege violations of the rights claimed based on specific allegations of plausible facts. Conclusory claims are insufficient. Because the alleged policy of Ashcroft et al. did not include any reference to race, religion or national origin, Iqbal failed to allege facts sufficient to meet the standard in Twombly. Moreover, since the defendants asserted qualified immunity, the requirement of sufficiently detailed pleadings is of even greater importance. Permitting discovery, even cabined discovery, infringes on public officials’ entitlement to qualified immunity. No discovery should be permitted to proceed in a case so long as assertions of qualified immunity in a motion to dismiss remain unresolved.

Fifth Circuit

James v. Harris County, __ F.3d __, 2009 U.S. App. LEXIS 17318 (5th Cir. August 4, 2009) In order to hold a local government liable for the action of a government employee, the plaintiff must prove that a government policy was the “moving force” behind the action. Evidence that the sheriff had a policy or practice of failing to investigate possible excessive force by sheriff’s deputies and that a sheriff deputy had used excessive force was insufficient evidence without proof that the sheriff’s deputy was aware of the sheriff’s policy. Deputy Sheriff Wilkinson shot and killed Harrison during the course of a traffic stop. Harrison’s family brought suit against the County alleging that Wilkinson used excessive force and that the sheriff had a policy or practice of failing to investigate situations in which deputy sheriff’s may have used excessive force. The district court granted judgment for Harris County, holding that because there was no evidence that Wilkinson was aware of the sheriff’s alleged policy, there was no evidence that the policy was the “moving force” behind Wilkinson’s allegedly excessive use of force. Harrison’s family appealed and the Fifth Circuit affirmed. Frame v. Arlington, __ F.3d __, 2009 U.S. App. LEXIS 15136 (5th Cir. July 7, 2009) Title II of the Americans with Disabilities Act (ADA) authorizes claims against municipalities for failure to make city curbs, sidewalks and certain parking lots ADA-compliant. Such claims are subject to a two-year statute of limitations that accrues upon the city’s completion of any noncompliant construction or alteration. The plaintiff, individuals with disabilities who depend on motorized wheelchairs for mobility, brought suit against the City of Arlington alleging that the City failed to make various City curbs, sidewalks and certain parking lots ADA-complaint, in violation of the ADA and the Rehabilitation Act. The City filed a motion to dismiss, which the district court granted. The Fifth Circuit considered two issues of first impression: First, whether city curbs, sidewalks and parking lots constitute a service, program or activity within the meaning of Title II. The Court held that Title II does encompass claims based on city curbs, sidewalks and parking lots. Second, since plaintiffs’ claims are permitted under Title II, whether such claims are subject to a statute of limitations. The Court again held in the affirmative and concluded that the claims accrue upon the city’s completion of any noncompliant construction or alteration, and not when a disabled person encounters the noncompliant work, as was urged by the plaintiffs. However, the Court reversed and remanded the case because the district court had placed the burden of overcoming the statute of limitations defense on the plaintiffs rather than on the City, as is normally appropriate for an affirmative defense like statute of limitations. Goodman v. Harris County, 571 F.3d 388 (5th Cir. June 9, 2009) Forensic, physical and medical evidence that tended to contradict the testimony of the single (living) witness was sufficient support for the jury verdict against the defendant. Goodman was riding his bicycle down the wrong side of the street. Ashabranner, a deputy constable, stopped Goodman and some sort of altercation occurred. Goodman fled and Ashabranner ultimately shot and killed Goodman. Ashabranner claimed that Goodman had assaulted him, attempted to drown Ashabranner’s police dog and was pulling something out of his pocket that appeared to be a weapon when Ashabranner shot Goodman. Goodman’s estate brought suit and the case went to trial. Goodman’s estate relied upon forensic, physical and medical evidence that tended to challenge the reliability of Ashabranner’s version of the facts. The jury agreed with Goodman’s estate and found Ashabranner liable. Ashabranner appealed, arguing that since he was the only living witness, there was no basis for the jury verdict. The Fifth Circuit rejected Ashabranner’s argument, noting the various ways in which the forensic, physical and medical evidence tended to discredit Ashabranner’s version of the reasonableness of his use of force. The Court explained that it was not a case in which the parties disputed whether the officer had used deadly force. The question was whether the use of force was reasonable. Based on the expert testimony, the jury could believe that Ashabranner’s use of force was unreasonable.

Texas Supreme Court

Dallas County v. Posey, 52 Tex. Sup. J. 782, 2009 Tex. LEXIS 310 (May 22, 2009) A prisoner’s use of a telephone cord to commit suicide in a county holding cell does not constitute a “condition or use” of tangible personal property for which the Tort Claims Act waives governmental immunity. Posey was placed in a holding cell with an inoperative telephone that had a cord. Posey hung himself. His family brought suit, arguing that the use of the telephone cord is a “condition or use” of personal property for which the Tort Claims Act waives immunity. The County asserted governmental immunity in a plea to the jurisdiction. The trial court denied the plea and the court of appeals affirmed. The Texas Supreme Court held that there was no waiver of governmental immunity because the tangible personal property was not being used by the County, but rather by Posey. In addition, while the phone was defective, Posey’s death was not related to the defective nature of the phone.

FALL 2009 NEWSLETTER CIVIL RIGHTS LAW UPDATE

admin — Wed, 21 Oct 2009 01:55:02 +0000

By John Husted

United States Supreme Court

District Attorney v. Osborne, __ U.S. __, 129 S. Ct. 2308 (June 18, 2009) There is no absolute constitutional right to obtain post-conviction access to the State’s evidence for DNA testing. Osborne was convicted of sexual assault and other crimes. Years into his prison sentence, he filed this 42 U.S.C. § 1983 suit, claiming that he had a due process right to access the State’s evidence used against him in order to subject it to new DNA testing at his own expense. Relying on the prosecutorial duty to disclose exculpatory evidence established by Brady v. Maryland, the Ninth Circuit affirmed that Osborne had a limited constitutional right to the new testing where it was unavailable at trial, it could be accomplished at almost no cost to the State, and the results would likely be material. The Court found that the task of establishing DNA rules without unnecessarily overthrowing the established criminal justice system belongs primarily to the State and Federal legislatures. Further, the Brady right of pretrial disclosure does not extend to post-conviction relief. Instead, if a State’s post-conviction relief procedures do not offend fundamental principles of justice and fairness, they are sufficient to apply to situations involving DNA evidence. The Court also refused to recognize a freestanding, substantive due process right of access to State evidence for DNA testing. Caperton v. A.T. Massey Coal Co., Inc., __ U.S. __, 129 S. Ct. 2252 (June 8, 2009) The Federal Due Process Clause requires recusal of a judge because of a probability of bias, where a party’s contribution to the judge’s election campaign is disproportionately great enough to offer a possible temptation to the average judge to “lead him not to hold the balance nice, clear, and true.” A West Virginia jury found Massey, a coal company, liable for fraud, concealment, and tortious interference with existing contractual relations, and awarded Caperton $50 million in damages. Shortly thereafter, elections for the State Supreme Court of Appeals were held. Knowing that an appeal of the case would be considered by the State Supreme Court of Appeals, Massey gave $3 million in contributions to the incumbent justice’s challenger, Benjamin, who ended up winning by a relatively narrow margin. The $3 million in contributions exceeded the total amount spent by all other supporters and by Benjamin’s own committee. Caperton moved to disqualify Justice Benjamin, but he refused to recuse himself, and the court reversed the $50 million verdict. Caperton challenged the verdict under the Federal Due Process Clause. The Federal Due Process Clause previously required disqualification of a judge in only two types of instances: when the judge has a financial interest in a case and when the judge is trying a defendant for criminal contempt charged in his court. The Court expanded on this list to include situations where a party contributes to the judge’s election and the party’s contribution’s relative size and apparent effect on the outcome, as well as its close temporal relationship to the pendency of the case, establish a serious objective risk of actual bias. Though proof of actual bias is not necessary and was not shown, there is a serious risk of actual bias when a person with a personal stake in a particular case has a significant and disproportionate influence in placing the judge on the case by raising funds or directing the judge’s election campaign when the case is pending. Haywood v. Drown __ U.S. __, 129 S. Ct. 2108 (May 26, 2009) The Supremacy Clause of the U.S. Constitution prevents a State from divesting its trial courts of jurisdiction over 42 U.S.C. §1983 suits brought by inmates seeking money damages from correctional officers. New York passed a policy divesting State courts of jurisdiction over §1983 suits by inmates against State correctional officers, because it believed that these suits were largely frivolous and vexatious. Such claims would be dismissed for lack of jurisdiction and the prisoner would be left to pursue a damages claim against the State in the Court of Claims, a court of limited jurisdiction wherein the prisoner would not be entitled to attorney’s fees, punitive damages, or injunctive relief. Only a neutral jurisdictional rule is a valid excuse for departing from the presumption of State Court competency to hear a federal claim absent an express limit by Congress. Though States retain substantial leeway to establish the contours of their judicial systems, they do not have authority to nullify a federal right or cause of action because they believe it to be contrary to local policies. New York’s policy was contrary to Congress’ judgment that all persons who violate federal rights while acting under color of law shall be held liable for damages. This rule divesting State trial courts of jurisdiction over these suits violates the Supremacy Clause. Montejo v. Louisiana, __ U.S. __, 129 S. Ct. 2079 (May 26, 2009) Michigan v. Jackson, which forbids police from initiating interrogation of a criminal defendant once he has invoked his right to counsel at an arraignment or similar proceeding, is overruled. At a preliminary hearing, Montejo was charged with first degree murder and the judge ordered appointment of counsel. Shortly thereafter, after being read his Miranda rights, he agreed to go on an excursion with police to find the murder weapon, and he wrote an inculpatory letter of apology to the victim’s widow. This occurred all before meeting his appointed attorney. Montejo challenged the use of this letter under Michigan v. Jackson, which held that “if police initiate interrogation after a defendant’s assertion, at an arraignment or similar proceeding, of his right to counsel, any waiver of the defendant’s right to counsel for that police-initiated interrogation is invalid.” The Court overruled Jackson, finding that its application can be impractical and can lead to arbitrary distinctions, since appointment of counsel procedures vary on a State-by-State basis. Also, in practice, it can unreasonably prevent police-initiated interrogation entirely once the Sixth Amendment right attaches. Further, the Court did not find that stare decisis required the Court to expand and revise Jackson’s holding. The Court did, however, clarify that a defendant still has the overlapping prophylactic protections of Miranda and Edwards v. Arizona, which states that an interrogation must stop once a defendant invokes his Miranda right to have a lawyer present. The defendant still has the opportunity to attempt to suppress the confession under remaining jurisprudence.

Fifth Circuit Court of Appeals

Merced v. Kasson, __ F.3d __, 2009 U.S. App. LEXIS 17027 (5th Cir. July 31, 2009) A City’s complete ban on the home sacrifice of certain animals violates the Texas Religious Freedom and Restoration Act (TRFRA). Merced, a Santeria priest, sued the City of Euless under the TRFRA seeking a permanent injunction to bar the City from enforcing several ordinances that prevented the sacrifice of certain animals. The court found that the practice of Santeria in the United States largely depends on home sacrifices of certain animals. The priest never kept the four-legged animals at his home for longer than four hours before the sacrifice, consumed much of the edible parts of the animal, while properly disposing of the rest, and he performed these sacrifices for sixteen years without creating a health hazard or unduly harming animals. Applying the standard as set out in the Texas Supreme Court case Barr v. Sinton (discussed below), the Court found that Merced was motivated by sincere religious belief, the ordinances constituted a substantial burden, the City could not show that Merced’s practices specifically jeopardized the interests of public health and animal treatment, and the ordinances were not the least restrictive means. Therefore, the ordinances violated TRFRA, and Merced was entitled to an injunction against the City. U.S. v. Brigham, 569 F.3d 220 (5th Cir. May 20, 2009) An order requiring a prisoner that is out on supervised release to take a polygraph test does not violate the Fifth Amendment when the evidence obtained from the test could not incriminate him. Shortly after Brigham commenced a term of supervised release, the US Probation Office filed a petition alleging that he violated various release conditions. The district judge conducted a final revocation hearing and found violations of two special conditions and revoked Brigham’s supervised release. Brigham challenged several aspects of the order on appeal, including that the district court improperly allowed the probation officer to require that he submit to a polygraph examination, and that the district court considered the results of the polygraph in violation of Brigham’s right against self-incrimination. The Fifth Circuit held that the order that Defendant take a polygraph test did not violate the Fifth Amendment. Brigham did not demonstrate that the district court actually used the polygraph results as a basis for revoking Brigham’s release; but even if the court did consider it in connection with his revocation, his Fifth Amendment rights had not been infringed upon because the questions only attempted to ascertain whether he had violated conditions of his probation and could not serve as the basis for a future criminal prosecution.

Supreme Court of Texas

Barr v. City of Sinton, __ S.W.3d __, 2009 Tex. LEXIS 396 (Tex. June 19, 2009) The Texas Religious Freedom Restoration Act (TRFRA) prevents a municipality from banning certain religiously-based halfway houses for released prisoners. As part of a religious ministry, Barr offered recently released prisoners free housing and religious instruction in two homes he owned in the City of Sinton. The City passed a zoning ordinance that precluded the use of the homes for that purpose and effectively banned the ministry from the city. Though never charged with violating the ordinance, Barr sued the City under TRFRA, which prevents a governmental agency from substantially burdening a person’s free exercise of religion unless the action is the least restrictive means of furthering a compelling governmental interest. The court clarified that the impact of zoning on the free exercise of religion can be subject to strict scrutiny review and that zoning laws are not exempt from TRFRA. The Court applied TRFRA and found that the halfway house was substantially motivated by sincere religious belief, the ordinance substantially burdened Barr’s ministry, and the City failed to establish a compelling interest as applied particularly to Barr’s houses, and considering the City’s small size, its location restrictions effectively prevented any halfway houses in the City, thereby showing that it was not the least restrictive means. The Court considered the City’s arguments, and clarified that a burden on a person’s religious exercise is not insubstantial simply because he could always choose to do something else. Further, one does not have to be cited or charged with a crime for a government’s burden to be substantial, and a restriction need not be completely prohibitive to be substantial. Therefore, the ordinance as applied to Barr’s ministry violated TRFRA.

FALL 2009 NEWSLETTER TEXAS SUPREME COURT INSURANCE LAW UPDATE

admin — Wed, 21 Oct 2009 01:56:34 +0000

by Rebecca Raper

State Farm Lloyds v. Becky Johnson, 52 Tex. Sup. J. 1042 (Tex. July 3, 2009). Appraisal pursuant to the terms of an appraisal clause is appropriate even where there are causation and coverage disputes. A disagreement arose after the insured reported hail damage to her roof. State Farm concluded that only a small portion of the roof was damaged in the hail storm and that the cost to repair was less than the relevant deductible while the insured asserted that the entire roof had to be replaced. The insurer resisted the suggestion of appraisal because it took the position that an appraisal is only appropriate to determine the amount of repairs when there is an agreement on the scope or extent of damages. The insured, however, argued that as long as the parties agree there is some covered damage, an appraiser can be used to determine the extent of damages as well as the reasonable repair costs. The trial court agreed with the insured, holding that “if the parties agree there is coverage but disagree on the extent of damage, the dispute concerns the ‘amount of loss’ and that issue is determined in accordance with the appraisal clause.” The Texas Supreme Court reasserted the long-held view that appraisals are appropriate for deciding the amount of damages only, not the insurer’s liability. That being said, the court went on to hold that it is nonetheless appropriate to go forward with appraisal where causation and the extent of covered damages are disputed because (1) it is efficient to allow pre-suit appraisals; (2) “in most cases appraisal can be structured in a way that decides the amount of loss without deciding any liability questions”; (3) coverage disputes are often resolved in the appraisal process; and (4) if an appraisal award is flawed for any reason, including overreaching, it can re challenged and disregarded by a court. As such, under Johnson, the appraisal process cannot be avoided merely because the insurer and insured do not agree on causation or coverage.

FALL 2009 NEWSLETTER PRODUCTS LIABILITY UPDATE

admin — Wed, 21 Oct 2009 02:04:16 +0000

By Rocky Little

Timpte Indus. v. Gish, 286 S.W.3d 306 (Tex. 2009). Robert Gish was seriously injured when he fell from the top of a 48 foot trailer manufactured by Timpte. Mr. Gish fell while attempting to load fertilizer into the top of the trailer, after climbing on top of the trailer using a ladder attached to the trailer. It is not typically required that one get on top of the trailer to load it. However, in this instance, there was a problem with a downspout that is not part of the trailer, and Mr. Gish climbed on top of the trailer in order to lower the downspout by hand. While standing on the trailer’s top rail, which is about five inches wide and more than nine feet above the ground, a gust of wind hit him from the back, causing him to fall. Mr. Gish claimed that the trailer had the following two design defects:

The top two rungs of the ladder attached to the trailer allow a person to climb atop the trailer, and
The top rail of the trailer is too narrow for a person to walk safely.

In other words, Mr. Gish complains that the trailer design failed to prevent him from climbing atop the trailer, and then once there, failed to protect him from the risk of falling. The Texas Supreme Court, however, held that the top rail and ladder of the trailer are not unreasonably dangerous and granted Timpte’s Summary Judgment against Mr. Gish. The Texas Supreme Court reiterated that, in order to recover for a products liability claim alleging a design defect, a plaintiff must prove that:

The product was defectively designed so as to render it unreasonably dangerous,
A safer alternative design existed, and
The defect was a producing cause of the injury.

In order to determine whether a product is defectively designed so as to render it unreasonably dangerous, Texas courts apply a risk-utility analysis that requires consideration of the following factors:

The utility of the product to the user and to the public as a whole weighed against the gravity and likelihood of the injury from its use,
The availability of a substitute product which would meet the same need and not be unsafe or unreasonably expensive,
The manufacturer’s ability to eliminate the unsafe character of the product without seriously impairing its usefulness or significantly increasing its cost,
The user’s anticipated awareness of the dangers inherent in the product and their avoidability because of general public knowledge of the obvious condition of the product, or of the existence of suitable warnings or instructions, and
The expectations of the ordinary consumer.

The risk-utility analysis does not operate in a vacuum, but rather in the context of the product’s intended use and its intended users. In general, the obviousness of danger in and of itself is not an absolute bar to liability for a defective design. However, the obviousness of the claimed defect is an important consideration in determining whether the product is unreasonably dangerous, and may even be decisive in a particular case. Concerning knowledge of the risk of injury, the proper inquiry is whether an average user of the product would recognize the risk. The consumer’s perspective is that of an ordinary user of the product, not necessarily that of an ordinary person unfamiliar with the product. In the context of an obvious risk, the duty to warn of defects is distinct from the duty to design safe products. The warning of an obvious or generally known risk will not provide an effective additional measure of safety, and may diminish the significance of warnings of unobvious risks. The Supreme Court noted that the top rail was not intended to be a walkway, and widening the rail would only encourage others to use it as a walkway, therefore, making it less safe. Likewise, Gish could have climbed atop the trailer even if the ladder had been removed. The court also noted the structural and utility benefits to the trailer’s design as is. Therefore, the utility of the design outweighed the risk. Finally, the lack of warning of the design defect was not dispositive because the claimed defect was obvious, and Gish disregarded a written warning to always maintain a three-point contact with the trailer, which is impossible for a user standing on the top rail. 2. Smith Servs. v. Grinnell Corp., (Tex. App. – Amarillo, August 13, 2009). The issue in this case was whether a manufacturer, Grinnell Corporation, owed a defense (attorney fees, expenses, and court costs) and indemnity to Smith Services for a personal injury claim caused by a metal swedge/hammer union that came apart. The Court of Appeals found that Smith was not a “seller” pursuant to the statutory indemnity provision of Chapter 82 of the Texas Civil Practice & Remedies Code. Under §82.001(3), a “seller” is defined as “one who is engaged in the business of distributing or otherwise placing, for any commercial purpose, in the stream of commerce for use or consumption, a product or any component thereof.” Although an employee of Smith had exchanged the allegedly defective swedge/hammer union with an employee of Grey Wireline, the court noted that the exchange of tools was merely a casual act between men working on a well. Therefore, there was no effort by Smith to commercially distribute the tool in question, nor could one reasonably infer that Smith’s “business” included distributing or placing the product into the stream of commerce. Because Smith was not a “seller,” it was not entitled to receive defense and indemnity from the manufacturer of the product. 3. Wyeth v. Levine, 129 S.Ct. 1187 (U.S. March 4, 2009). This United States Supreme Court case concerns the labeling on the anti-nausea drug Phenergan, which is manufactured by Wyeth. The Food and Drug Administration’s (FDA) approval of a new drug includes the approval of the exact text in the proposed label. Generally, a manufacturer may only change a drug label after the FDA approves a supplemental application. However, there is an FDA regulation that permits certain label changes to be made prior to the agency’s approval. The United States Supreme Court held that federal law does not pre-empt a state law claim that Phenergan’s label did not contain an adequate warning. Wyeth argued that requiring it to comply with a state law duty to provide a stronger warning would interfere with Congress’ purpose of entrusting the FDA with drug labeling. According to the Court, the history of the Federal Food, Drug, and Cosmetic Act shows that Congress did not intend to pre-empt state law failure-to-warn actions. Also, it is the FDA’s own longstanding position that state law is a complimentary form of drug regulation. 4. Thermacor Process, L.P. v. BASF Corp., 567 F.3d 736 (5th Cir. May 7, 2009). Thermacor manufactures insulated pipe, and in 2004, requested BASF to pursue the development of a high temperature spray to apply to the pipe. BASF provided a spray foam along with a technical information and data sheet, which included the following: Any technical advice furnished is believed to be reliable, but seller makes no warranty, either express or implied, as to its accuracy or completeness or of the results to be obtained. Buyer assumes full responsibility for quality control, testing, and determination of suitability of product for its intended application or use. Seller makes no warranty of fitness for a particular purpose or warranty of merchantability. The United States 5th Court of Appeals held, among other things, that a disclaimer of warranty can, under some circumstances, bar claims for negligent misrepresentation, fraud, and deceptive trade practices. A disclaimer must be conspicuous so that a reasonable person against whom it is to operate ought to have noticed it.

FALL 2009 NEWSLETTER COMMERCIAL TRUCKING UPDATE

admin — Wed, 21 Oct 2009 02:06:02 +0000

By Dean Foster

Simpson v. Empire Truck Lines, Inc., 571 F.3d 475 (5th Cir. 2009). Empire hired Rodgers Trucking to transport goods pursuant to its contract with UPS. Plaintiff was injured when Rodgers fell asleep at the wheel. Plaintiff was in the sleeper compartment at the time of the accident. Plaintiff sued Rodgers, Rodgers Trucking and Empire, but he voluntarily dismissed his claims against Rodgers and Rodgers Trucking. The jury found Rodgers 100% liable. Simpson appealed contending that he is entitled to sue Empire for Rodgers negligence under the Texas Workers Compensation Act (TWCA) and Empire is foreclosed from asserting certain defenses, including contributory negligence. Rodgers and Empire executed a form that provided: “The undersigned motor carrier and the undersigned owner/operator agree that the owner/operator assumes the responsibilities of an employer for the performance of the work.” Thus, under Texas law, Plaintiff was not entitled to assert a claim against Empire under the TWCA. Relying on White v. Excalibur Insurance Co., 599 F.2d 50 (5th Cir. 1979), Plaintiff asserted that federal law preempts the TWCA on this issue. The court of appeals disagreed. When White was decided, the FMCSR required motor carriers to assume “full direction and control” of leased vehicles in order for the public to be protected from the torts of operators that were frequently insolvent. Pursuant to this statute, the White court held that employees of the owner-operator were statutory employees of the motor carrier. This portion of the FMCSR was later superseded by 49 U.S.C. §11107, which provides in part the regulations regarding leasing of vehicles are not intended to affect whether the lessor or driver provided by the lessor is an independent contractor or an employee of the authorized carrier lessee. An independent contractor relationship may exist when a carrier lessee complies with the FMCSR’s administrative requirements. Ultimately, the court determined the FMCSR did not contradict the TWCA. The mere fact that an owner-operator and the owner-operator’s employees have entered into a written agreement that evidences a relationship in which the owner-operator assumes the responsibilities of an employer for the performance of work does not transform the owner-operator’s employees into employees of the motor carrier. Therefore, the court of appeals affirmed the trial court’s ruling that Plaintiff was not entitled to sure Empire under the TWCA.

FALL 2009 NEWSLETTER SUCCESSES, VICTORIES and OTHER NEWS

admin — Wed, 21 Oct 2009 02:07:45 +0000

Fanning Harper Martinson Brandt & Kutchin, P.C. is pleased to provide you with our Fall 2009 Newsletter. Below you will find information regarding successes and activities in which our attorneys have recently been involved. Please click on the hyperlinks to our website to find interesting updates for issues relating to Commercial Trucking, School Law, Employment Law, Local Government Law, Premises Liability, Texas Supreme Court—Insurance Law, Civil Rights, and Products Liability. If you would like additional information regarding these updates, please contact the writers at 214-369-1300. To be removed from future e-mails from our firm, please respond to sgoode@fhmbk.com

SUCCESSES, VICTORIES and OTHER NEWS

Thomas P. Brandt and Joshua A. Skinner obtained a dismissal for the City of Arlington in Brown v. City of Arlington, Texas in the United States District Court for the Northern District of Texas, Fort Worth Division. The plaintiffs brought federal due process challenges to the City’s crime-scene investigation and open records procedures. FHMBK argued that the plaintiffs had failed to state a cause for which relief could be granted. The district court granted the City’s motion to dismiss. Thomas P. Brandt and Joshua A. Skinner obtained dismissal for Hood County in Loper v. Johnson County in the United States District Court for the Northern District of Texas, Dallas Division. The plaintiffs brought suit alleging that County jail personnel had failed to provide adequate medical care to one of the plaintiffs while he was incarcerated at the jail. FHMBK argued that there was no evidence that jail personnel had failed to provide adequate care and that it was the County’s policy and practice to provide adequate medical care to inmates. The district court granted judgment for the County. The Fort Worth Court of Appeals affirmed the dismissals granted in five cases brought against Hood County and various Hood County officials alleging that Hood County officials violated the due process rights of the plaintiff by allegedly refusing to investigate and prosecute individuals who allegedly robbed the plaintiff and assaulted him. Thomas P. Brandt and Joshua A. Skinner obtained dismissal of the case before the 355th District Court in Hood County pursuant to Chapter 14 of the Texas Civil Practice and Remedies Code and the trial court declared the plaintiff a vexatious litigant. The court of appeals affirmed on all issues. Thomas P. Brandt recently spoke on “Hot Topics in Employment Law” at the 21st Annual Suing and Defending Governmental Entities Course hosted by the State Bar. Joshua A. Skinner recently spoke on “Lawsuits against the Government” at the Bill of Rights 2009 Course hosted by the State Bar. Rocky Little has been approved for Recertification for another five years as being Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization. Thomas P. Brandt recently spoke to the Austin Claims Association at its summer seminar. Mr. Brandt spoke on the topic “Medicare/Medicaid Liens, Medicare Set-Asides, Hospital Liens.” Thomas P. Brandt and Frank Valenzuela obtained summary judgments for the City of Mansfield, Texas and one of its corrections officers in Smith v. Aguirre in the United States District Court for the Northern District of Texas, Fort Worth Division. The plaintiff brought excessive force claims under the Fourth, Eighth, and Fourteenth Amendments to the U.S. Constitution because of alleged injuries he suffered as a result of being tasered twice while being escorted to a holding cell. FHMBK argued for the City that it did not have a policy, custom, or practice allowing or authorizing excessive force and that the plaintiff had no evidence to the contrary. For the individual defendant, FHMBK argued that he had not engaged in excessive force and that the plaintiff had no evidence of the application of such force. The district court granted summary judgment.

SAVE THE DATE

EIGHTH ANNUAL TEXAS LEGAL UPDATE Presented by Fanning Harper Martinson Brandt & Kutchin, P. C. Thursday, November 12, 2009 Studio Movie Grill in Dallas. Details to follow. Put the date on your schedule now!! To find out more about these attorneys, or more about our firm, please visit our website at www.fhmbk.com 4849 Greenville Ave. Ste. 1300 • Dallas, TX 76206 • (214) 369-1300 • www.fhmbk.com This e-mail is established for informational purposes only. Nothing in this e-mail shall be construed as individual advice, and the use of the e-mail link for communications with the firm or any individual member of the firm does not establish an attorney-client relationship.

The Eighth Annual Texas Legal Update

admin — Wed, 20 Jan 2010 02:18:10 +0000

Hot Topics in Constitutional, Civil Rights and Local Government Law Hot Topics in Employment Law: Changes and Pending Legislation Medicare Secondary Payer and Reporting Prompt Payment of Claims Update The Role of Arbitration in Litigation Today Designation of Responsible Third Parties "It’s his fault; not mine." Supreme Court Update-- Insurance and Tort Law Insuring Contractual Risk Transfers in Texas Premises Liability Law in Texas

WINTER 2010 NEWSLETTER EMPLOYMENT UPDATE

admin — Thu, 21 Jan 2010 02:25:48 +0000

By Francisco J. Valenzuela

Fifth Circuit

Allen v. McWane Inc., 2010 U.S. App. LEXIS 487 (5th Cir. January 8, 2010) A collective bargaining negotiation between an employer and employee representatives is not necessary to find that a “custom or practice” existed under § 203 of the Fair Labor Standards Act. In this FLSA case, Plaintiff Allen asserted a claim that he and other similarly situated employees should be paid for pre- and post-shift time spent donning and doffing protective gear. The court noted that § 203(o) of the FLSA allows employers to exclude such time from compensation if there was a custom or practice of doing so under a collective bargaining agreement. Allen argued that the collective bargaining agreement was silent as to compensation for those items and, therefore, that there was no custom or practice. Looking to its own precedent and that of two other circuits, the Fifth Circuit held that “silence by the employees and their union as to the non-compensability of this time when the CBAs were executed meant that a custom or practice of nonpayment was established pursuant to a CBA, and thus the time was not to be calculated as ‘hours worked’ under § 203(o).” This is true even when negotiations over the compensability of this time never took place during the collective bargaining process, when a non-compensability policy had been in place for a “prolonged period of time” including at the time that the agreement was executed. If no such negotiations take place and there is no evidence of a prolonged period during which a non-compensability policy was in place, then additional evidence of the employee’s knowledge and acquiescence will be required. Finally, the Fifth Circuit noted that Allen, the plaintiff, had the burden of proof as regarding whether a custom or practice existed under § 203(o). Alaniz v. Zamora-Quezada, 2009 U.S. App. LEXIS 28052 (5th Cir. December 21, 2009) In a case involving numerous claims of sexual harassment and retaliation, a trial court did not err by allowing the jury to consider questions concerning the quid pro quo and retaliation claims because “but for” causation, required to establish a retaliation claim, is not the same as sole causation, alleged by the defendant as required to establish the plaintiff’s quid pro quo claims. The court analyzed numerous claims of sexual harassment and of a hostile work environment, including quid pro quo claims. One of the bases of the employer’s appeal was that the jury questions regarding the quid pro quo claims and the retaliation claims were erroneous because the jury was required to find two sole causes for the adverse employment action. The court held, based on prior precedent, that a “‘but for’ cause is simply not synonymous with ‘sole cause.’” For this reason, it was proper for both questions to be presented to the jury and for the jury to have found for the plaintiffs on both claims. Depree v. Saunders, 588 F.3d 282 (5th Cir. November 12, 2009) Saunders, the decision-maker who removed Depree from his teaching duties and evicted him from his office, was entitled to qualified immunity because her conduct did not violate a clearly established constitutional right. Decisions concerning teaching assignments, pay increases, administrative matters, and departmental procedures do not rise to the level of a constitutional deprivation, and, therefore, were not actionable adverse employment actions. The Court noted that prior to this case it had not applied the expanded definition of Title VII retaliation announced by the Supreme Court in Burlington N. and Santa Fe Ry. Co. v. White, 548 U.S. 53, 68 (2006), to its prior precedents concerning educational decisions and, for this reason, no clearly established law existed for Saunders to follow. The Fifth Circuit held that Saunders’ action was not objectively unreasonable. The court noted that in First Amendment retaliation cases, there “‘will rarely be a basis for a priori judgment that the termination or discipline of a public employee violated ‘clearly established’ constitutional rights.’” Only decision-makers can be held liable for First Amendment retaliation, unless the decision-maker acts as the “cat’s paw” of those acting with retaliatory motives. In order to establish the “cat’s paw” claim, a plaintiff must show that “(1) a co-worker exhibited [retaliatory] animus, and (2) that the same co-worker ‘possessed leverage, or exerted influence’” over the decision-maker. Depree provided no such evidence. Moreover, the court noted that Saunders acted based on the findings of her investigation. For these reasons, Depree could not pursue his claims against Saunders and the other individual defendants in their individual capacities. The Fifth Circuit also held that because “Depree’s tenure, salary and title remained intact, and he had no property interest in teaching, he had not been deprived of a constitutional property right.” No property interest exists in regards to the reassigning or transferring of an employee, unless a statutory or contract term exists to the contrary. Floyd v. Amite County School District, 581 F.3d 244 (5th Cir. August 27, 2009) In order for an employee to successfully assert a Title VII claim of discrimination based on a personal relationship between the employee and a person of a different race, the employee-plaintiff must present evidence of racial animus against the employee because of the employee’s race. Floyd was the track coach and principal and conducted a summer camp for track athletes on school grounds with Board permission. Floyd is an African American and his high school was predominantly African American. In May of 2002, Floyd obtained permission from the Board to conduct the camp, though he did not inform the Board that that year, unlike previous years, he would invite white students from private schools in the area. The president of the Board clearly exhibited racial animus against the white students. Floyd was ultimately suspended and terminated.In its analysis of the case, the court stated that Title VII allows Floyd to assert a discrimination claim based on his relationship with persons of a different race, but Floyd must show that the racial animus serving as the basis of his claim must be toward Floyd’s race, not the race of the white athletes. In this case, because the racial animus was toward the race of the white athletes, not Floyd, Floyd could not successfully assert a Title VII claim of discrimination.

Supreme Court of Texas

City of Pasadena v. Smith, 292 F.3d 14 (Tex. August 28, 2009)A hearing examiner exceeds his jurisdiction under the Fire Fighters and Police Officers Civil Service Act (the “Act”) when his acts are not authorized by the Act or are contrary to it, or when his acts invade the policy-setting realm protected by the non-delegation doctrine. The City of Pasadena indefinitely suspended Officer Smith, and Officer Smith chose to appeal the decision to a hearing examiner. At the time of hearing before the examiner, the examiner decided that because the Chief of Police, on whose statement the suspension was based, was not present at the hearing, that the charges against Smith should be dismissed. As support, the hearing examiner cited to a provision of the Local Government Code that does not exist, and even assuming that a related provision was what was intended, the related provision did not apply to cities the size of the City of Pasadena. The court noted that a hearing examiner’s jurisdiction under the Act is subject to constraints, including that the hearing examiner may only consider the evidence submitted during the hearing. The court held that the hearing examiner’s decision was not based on evidence but only on the absence of a witness that the City did not expect to call as a witness and that the Act did not require to be present.

Texas Court of Appeals

Martinez v. Wilson County, 2010 Tex. App. LEXIS 198 (Tex. App. – San Antonio January 13, 2010, no pet. h.) A female plaintiff who served letters to superiors complaining about the conduct of a co-worker and used the term “hostile work environment” but did not provide any information that she was being discriminated against on the basis of her gender, did not engage in a protected activity that could serve as the basis of a retaliation claim. On May 24, 2006, Martinez sent a letter to a superior complaining about the unprofessional behavior of a male drill instructor, which consisted of the male instructor yelling at her. On June 2, 2006, Martinez sent a letter to the same superior and the Board of Directors titled “Notice of Hostile Work Environment” requesting action against the drill instructor. On June 7, 2006, Martinez was terminated for conspiring with her superior in regards to an accident to a student and the student’s injury which took place on May 11, 2006. Martinez filed suit claiming gender discrimination under the TCHRA. In reaching its decision, the court noted that in order to engage in a protected activity, an employee must make a complaint of a type of discrimination covered by the TCHRA, not just some vague charge. Moreover, the court noted that for workplace comments to “‘provide sufficient evidence of discrimination, those comments must be (1) related to plaintiff’s protected class, (2) proximate in time to the adverse employment decision, (3) made by an individual with authority over the employment decision at issue, and (4) related to the employment decision at issue.’” Stray remarks by non-decision makers are insufficient. Martinez did not introduce any evidence that she engaged in any protected activity by complaining about a type of discrimination prohibited under the TCHRA, nor that the drill instructor was a decision maker or that he was in a position to influence the decision maker. Santi v. The University of Texas Health Science Center at Houston, 2009 Tex. App. LEXIS 8957 (Tex. App. – Houston [1st Dist.] November 19, 2009, no pet.) First, a charge of discrimination adequately notifies an employer of the existence of a sex discrimination claim by asserting facts indicating such discrimination, notwithstanding that the box for sex discrimination was not checked-off. Second, an untimely filed complaint with the EEOC alleging two discrete acts, one of which was beyond the statutory limitations period, does not give the court jurisdiction over the first discrete act. Third, post-termination actions in connection with a former-employee’s compensation can be the subject of a retaliation claim. In this case, Santi, a professor, filed a charge of discrimination with the EEOC. Charges of discrimination are construed liberally, but must still provide a factual basis to notify the employer of the nature of the charges. When completing the charge, Santi marked the box next to the word “RETALIATION“, but not the box next to the word “SEX.” Within the section wherein she described the underlying facts, she “alleged instances when she was treated differently than male counterparts and described making both informal and formal complaints of gender discrimination to the University.” The court held that the description was sufficient to place the university on notice that she was alleging sex discrimination. In regard to the timing of her charge of discrimination, the court held that the trial court did not have jurisdiction over one of the two instances during which Santi claims she was discriminated against. The first instance took place on June 1, 2006 and the second instance was December 20, 2006, but Santi did not file her charge of discrimination until March 5, 2007. Because Santi could not show that these two discrete acts (the decision not to renew her contract and the denial of a right to license derivative materials) did not constitute a continuous violation, the trial court did not have jurisdiction over the June 1st instance of alleged discrimination. Finally, in regard to the claim about the denial of the right to license derivative materials, the court noted that it was not an action “in connection with compensation” that would be required to waive the university’s sovereign immunity. While post-termination acts may be the subject of a retaliation claim, in this instance no evidence was presented that the right to license derivative materials was considered part of Santi’s compensation. Overstreet v. Underwood, 2009 Tex. App. LEXIS 8809 (Tex. App. -- Amarillo November 16, 2009, no pet.) An employee had sixty days from the date of her first complaint with the Texas Workforce Commission alleging harassment and retaliation to file suit and failure to do so prevents the employee from filing suit. Overstreet filed a complaint against Lubbock County on February 23, 2007. When that complaint was dismissed after receiving the right to sue letter (April 26, 2007), Overstreet filed a second complaint on April 28, 2007 which named Underwood as the employer, but was otherwise identical to her first complaint. On August 23, 2007, Overstreet filed suit in federal court. On September 21, 2007, another right to sue letter was issued, and Overstreet filed suit in state court on October 15, 2007. The court held that the first discrimination administrative complaint sufficiently described her claims against Underwood, even though the employer named was Lubbock County, and, therefore, the controlling right to sue letter was the one from April 26, 2007. Because Overstreet failed to file suit within 60 days of the April 26, 2007 letter, her suit was untimely. Lueck v. State of Texas, 2009 Tex. App. LEXIS 8782 (Tex. App. -- Austin November 13, 2009, no pet.) Section 21.202 of the Texas Labor Code’s requirement of the filing of an administrative complaint is mandatory; failure to abide by that requirement prevents a plaintiff from bringing suit in court for alleged employment discrimination. In this case, the plaintiff argued that the Texas Supreme Court’s decision in Dubai Petroleum Co. v. Kazi, 12 S.W.2d 71 (Tex. 2000), should be interpreted to mean that § 21.202’s requirements are not jurisdictional. The court of appeals disagreed and held that the established law in Texas is that the requirements continue to be mandatory and jurisdictional. Greenway v. Roccaforte, 2009 Tex. App. LEXIS 8290 (Tex. App. – Beaumont October 29, 2009, no pet.) The preparation and service of a letter to TALX Employer Services and an F-5 Report required by the Texas Commission on Law Enforcement Officer Standards and Education (“TCLEOSE”), neither of which was shown to have impacted Roccaforte’s ability to obtain another law enforcement job, do not constitute publication for the purpose of a claim asserting deprivation of a liberty interest under the due process clause. Moreover, statements by a supervising officer that he would not terminate a subordinate employee without good cause were not sufficiently specific to modify the subordinate’s status as an at-will employee. Greenway, a constable, would tell employees, including at-will employees, that he would not fire them without good cause. After Hurricane Rita, Greenway fired Roccaforte, a deputy constable, as a result of various instances of alleged misconduct. Roccaforte sued claiming deprivation of a liberty and property interest under the due process clause of the U.S. Constitution. The court of appeals noted that reputation by itself is not a protected liberty interest, but instead that a complainant must show stigma plus an infringement of another interest. In this case, the court of appeals did not find that information about Roccaforte had been publicized in any manner nor that any evidence existed that the letter to TALX or the report to TCLEOSE made Roccaforte unable to find another law enforcement job. In regard to his property interest claim, the court noted that “[a]bsent a property interest created from an independent source, such as by operation of contract, state law, or a policy, a government employee does not have a property interest in government employment.” The court also found that without a “definite, stated intention to the contrary, an at-will employment agreement cannot be modified by an employer’s oral assurance that he will not terminate an employee except for good cause.” Because Greenway’s statements were not sufficiently specific, they did not modify Roccaforte’s status as an at-will employee, and therefore, Roccaforte “had no expectation of continued employment.” Texas Department of Public Safety v. Alexander, 2009 Tex. App. LEXIS 8189 (Tex. App. – Austin October 22, 2009, pet. filed) The statutory limitations period for filing a discrimination complaint began to run when the employer announced the names of the persons being promoted, not when the announced individuals were actually promoted. The Texas Department of Public Safety (“TDPS”) had 11 openings for captain positions. As a result of a written and oral exam, 11 individuals were selected for promotion. The announcement as to the 11 to be promoted was given on November 30, 2001, with the promotions taking effect on December 15, 2001. The court ruled that the plaintiff had to file a charge of discrimination within 180 days after November 30th, not December 15th, though timely filed intake questionnaires can, at times, satisfy the timeliness requirement. To satisfy the timeliness requirement, there should be evidence as to the date that the intake questionnaire was completed, even if complete documents are later submitted that perfect the questionnaire and which relate back to the timely filed document. The court held that because no evidence existed in the record that an appropriate complaint was timely filed, the court found that the plaintiffs did not exhaust the required administrative remedies. The plaintiffs also filed a claim under the Declaratory Judgment Act. The court held that they could not circumvent the administrative exhaustion requirements under the TCHRA by filing a declaratory judgment action. In order to bring such an action, the plaintiff would have to show that they met the requirements for asserting a TCHRA claim. City of Houston v. Tones, 2009 Tex. App. LEXIS 7840 (Tex. App. – Houston [14th Dist.] October 8, 2009, no pet.) Under the Fire Fighters’ and Police Officers’ Civil Service Act (the “Act”), unfounded allegations that a hearing examiner misapplied the law do not amount to the examiner’s exceeding his jurisdiction under City of Pasadena v. Smith, 292 F.3d 14 (Tex. August 28, 2009). For this reason, the district court did not have jurisdiction to hear the City’s appeal. The City did not assert that the hearing examiner acted outside the scope of the Act or that he applied an inapplicable provision, but simply that the examiner misinterpreted the correct statutory provision. The court noted that the Supreme Court in City of Pasadena stated that assertions of an incorrect decision was not equivalent to saying that the examiner did not have jurisdiction, and that the Supreme Court provided two instances wherein an examiner exceeds his jurisdiction: (1) when the examiner’s acts are not authorized by the Act or are contrary to it or (2) when an examiner’s decision constitutes policy-setting. The court found that unsupported allegations of a misapplication of the correct statutory provision does not constitute an examiner’s exceeding his jurisdiction, and for this reason, the district court lacked jurisdiction to hear the City’s appeal. Perry v. University of Houston—Downtown, 2009 Tex. App. LEXIS 7710 (Tex. App. – Houston [1st Dist.] October 1, 2009, no pet.) An employee asserting a retaliation claim against her employer may establish a causal link (the third part of a plaintiff’s prima facie case) between engaging in a protected activity and an adverse employment action (using circumstantial evidence) by showing an employer’s failure to follow its normal policies or procedures, discriminatory treatment in comparison to similarly situated employees, knowledge of the employee’s protected activity by those carrying out the adverse employment action, evidence that the reasons for the adverse employment action were false, and through temporal proximity between the protected activity and the adverse employment action. In this employment discrimination case, the employer’s motion for summary judgment focused solely on the lack of a causal link between Perry’s (the plaintiff) prior statements of discrimination and her termination. In its review, the court noted that Perry failed to provide any evidence that her employer did not follow its discipline policy or that other similarly situated employees were treated better than Perry. The court also found that the evidence showed that the decision-maker had no knowledge of Perry’s prior complaints. In regards to the temporal proximity issue, the court noted that “[t]emporal proximity between the filing of an EEOC charge or a discrimination suit and a disciplinary action may be evidence of a causal connection when they are separated by weeks, as opposed to months or years.” The court noted that Perry’s EEOC charges were filed in 2001 and the spring of 2004, but that she was not terminated until June of 2005. “A year between protected activity and a disciplinary action is not sufficiently proximate to show a causal link without other evidence that the firing was retaliatory.” Additionally, in regard to a federal lawsuit that she had filed, Perry admitted that her employer did not know that she had filed a federal lawsuit before it terminated her and that her employer was not served until after her termination. The court found that Perry could not establish a causal link between her protected activities and her termination. Bates v. Randall County, 297 S.W.3d 828 (Tex. App. – Amarillo September 25, 2009, pet. filed) Employees who verbally tried to initiate the County’s grievance process but who were thwarted from doing so may be able to establish that their efforts were sufficient to toll the 90-day limitations period to file litigation under the Texas Whistleblower Act. In this whistleblower case, the County terminated two employees, Bates and Reynero. After the reading of their termination letters, Reynero attempted to discuss the decision with the decision-maker but was prevented from doing so. The County argued that there was no applicable grievance procedure for the plaintiffs to engage in because they were no longer employees, though the County treated later actions as attempts to initiate the grievance process. The court found that “when it is unclear whether an employer has a post-termination grievance procedure, the terminated employee’s notice to the employer that he believes an adverse personnel action was taken against him due to a good faith report of a violation of the law by the governmental entity, if made within 90 days, is sufficient to toll the limitations period of section 554.005.” The court also noted that the Act does not require exhaustion of the grievance process, but only that the employees initiate it. In regard to attorney’s fees, the County argued that because the plaintiffs did not recover more than was offered to them in settlement, that the court was required to assess the costs of suit against the plaintiffs under § 89.004 of the Texas Local Government Code. Section 89.004 requires that before a person can sue a county or an elected county official, that the person must present the claim to the commissioners court, and if the commissioners court does not offer to settle the plaintiff’s claims for more than the plaintiff recovers after trial, then the plaintiff shall pay the costs of the suit. The court held that because compliance with the Texas Whistleblower Act’s grievance procedures provides notice as to the plaintiff’s claims, § 89.004’s presentment requirement does not apply. Yarbrough v. Texas A&M University—Kingsville, 2009 Tex. App. LEXIS 7456 (Tex. App. – Corpus Christi—Edinburg September 24, 2009, no pet.) A public employer satisfies § 617.005 of the Government Code’s requirement to give employees an opportunity to present their grievance if it allows its employees to access persons in positions of authority who have the authority to actually correct the alleged wrong. In this case, Yarbrough received a negative evaluation from her supervisor with which she disagreed. Yarbrough asked her supervisor to change the negative portion of her evaluation but was refused. Under Texas A&M University—Kingsville’s (“TAMUK”) policies, Yarbrough’s “exclusive remedy” for contesting her evaluation was to submit a rebuttal letter to be placed in her file. Instead of submitting the rebuttal letter, Yarbrough pursued her complaint up the chain of command, meeting with individuals who did not have the power to change her evaluation. Only Yarbrough’s supervisor (who had given her the allegedly improper evaluation) had the power to change the evaluation. Yarbrough appealed the negative evaluation to the faculty grievance committee, but a hearing never took place because the provost informed the committee that it lacked authority to hear the appeal. The court held that TAMUK’s actions impaired Yarbrough’s “right to present her grievance to a person with the authority to remedy her complaint.” Donna Independent School District v. Rodriguez, 2009 Tex. App. LEXIS 7324 (Tex. App. – Corpus Christi—Edinburg September 17, 2009, no pet.) If a timely charge of discrimination is filed as to one act of discrimination, the continuing violation doctrine, which applies when unlawful employment acts manifest themselves over time as opposed to discrete acts, serves to expand the scope of the events that can be challenged, if one of the events took place within the 180 day statutory time frame under the TCHRA. In this employment discrimination case, the plaintiff filed a TCHRA complaint on May 27, 2004, more than 180 days after her first grievance against her employer. The court held that the continuing violation doctrine did not apply because she was clearly alerted to the alleged discriminatory act at the time she filed her grievance against her employer. The court noted that, in order to proceed under the doctrine, the plaintiff must show “‘an organized scheme leading to and including the present violation, so that it is the cumulative effect of the discriminatory practice, rather than any discrete occurrence, that gives rise to the cause of action.’” The court did find that the plaintiff’s TCHRA complaint was timely in regard to her claims about an April 4, 2004 pay raise, even though her TCHRA complaint does not reference that particular pay raise. The court reasoned that “a subsequent suit filed pursuant to the TCHRA may be based on claims made in the discrimination complaint as well as any ‘factually related claims that could reasonably be expected to grow out of the [TCHR]’s investigation of the charge.’” The court held that whether or not the plaintiff received an insufficient pay raise could reasonably have been expected to grow out of the TCHR’s investigation into the plaintiff’s initial wage complaint. Woods v. VanDevender, 296 S.W.3d 275 (Tex. App. – Beaumont August 31, 2009, pet. filed) Article III, section 52e of the Texas Constitution does not bar a deputy sheriff from recovering salary continuation benefits during a 2001 term of office for an incapacity resulting from an on-the-job injury that occurred during his prior term of office. On April 11, 2000, VanDevender was injured in the course of his duties as a deputy sheriff and was incapacitated for some time, but he was able to return to work and complete his term of office ending on December 31, 2000. VanDevender was re-appointed on January 1, 2001 as deputy sheriff and began another term. In March of 2001, VanDevender underwent surgery related to the April 11th injury, and he was incapacitated for the remainder of his term, ending on December 31, 2004. Article III, section 52e of the Texas Constitution reads in pertinent part: “providing that while said…Deputy Sheriff… is hospitalized or incapacitated that the county shall continue to pay his maximum salary; providing, however, that said maximum salary shall cease on the expiration of the term of office to which such official was elected or appointed.” Based on principles of interpretation, and the provision’s history and intent, the court held that benefits are “available for any period of incapacity” caused by a work related injury while the individual is a sworn deputy of the county. Because VanDevender met this description, he was entitled to the required supplemental salary continuation benefits. Cory v. Brady Independent School District, 2009 Tex. App. LEXIS 7034 (Tex. App. – Austin August 31, 2009, no pet.) A plaintiff who was terminated and replaced by another individual and who brings a claim of age discrimination under the Age Discrimination in Employment Act (“ADEA”), cannot establish a prima facie case of discrimination by showing that she was “otherwise discharged because of her age.” In order for a discharged employee to establish a prima facie case under the ADEA, she must establish that the employee (1) was part of the protected class (i.e. over the age of 40); (2) was qualified for her position; (3) suffered an adverse employment action; and (4) was (i) replaced by an individual outside of her protected class, (ii) replaced by a younger person, or (iii) was “otherwise discharged because of her age.” The third alternative of the fourth prong applies when the plaintiff is not replaced. In reaching its decision affirming a summary judgment in favor of the defendant, the court noted that the plaintiff’s replacement was older than the plaintiff and that the plaintiff could not argue that she was “otherwise discharged because of her age” because she had been replaced. For these reasons, the plaintiff could not establish a prima facie case under the ADEA.

WINTER 2010 NEWSLETTER TAKINGS AND ZONING CASE LAW UPDATE

admin — Thu, 21 Jan 2010 02:29:19 +0000

By John Husted

Texas Supreme Court

City of Houston v. Trail Enterprises, Inc., 2009 Tex. LEXIS 872 (Tex. October 30, 2009) For a regulatory takings claim to be ripe, futile variance requests or re-applications are not required; rather, it is ripe upon enactment of an ordinance absolutely prohibiting precisely the use the owners intend to make, subject to potential exceptions. A Houston ordinance prohibited drilling for minerals in a Control Area. Mineral owners filed a regulatory takings claim, and the jury awarded damages of nearly $17 million, but before the court entered final judgment, it granted the City’s motion for summary judgment on ripeness grounds, because the owners did not first seek a permit or variance request. The Texas Supreme Court found that that the takings claim was ripe because futile variance requests or reapplications are not necessary for ripeness. The court went on to hold that the court of appeals erred by rendering a money judgment against the city on the mineral interest owners regulatory takings claim.

Texas District Courts

2800 La Frontera No. 1A, Ltd. v. City of Round Rock, 2010 Tex. App. LEXIS 243 (Tex. App.—Austin Jan. 12, 2010, no pet. h.) Even if a City’s primary motivation for re-zoning was to assist a private developer, if the diminution in value of the plaintiff property owners’ property is especially small, and the degree of interference with the reasonable investment-backed expectations of the property owner is modest, the ordinance does not go “too far” such that fairness and justice require the property owner’s cost to be borne by the public. City of Houston v. Norcini, 2009 Tex. App. LEXIS 8961 (Tex. App. – Houston [1st Dist.] November 19, 2009, pet. filed) (mem. op.) A regulatory takings claim is ripe where the claimant alleges a concrete plan to sell property to a builder and has taken steps to sell the property, but was prevented due to the City’s ordinance. In 2006, the City amended its flood-control ordinances. Under the amendment, new residential construction was severely restricted on property located in a floodway. Norcini sued the City alleging that the amendment constituted an unconstitutional taking of his property, which was in a floodway. Norcini alleged that the amendment effectively deprived him use of his property and drastically reduced its value. The City filed a plea to the jurisdiction, asserting that the trial court lacked subject-matter jurisdiction because the claims were not ripe for adjudication. Norcini alleged that the 2006 amendments deprived him of the “use, benefit, and enjoyment” of the Property because he could not sell it to anyone who desired “to construct any improvements in or upon the property.” Norcini testified in his affidavit that he intended to sell the property to a builder, and had a definitive plan for the property, which was effectively destroyed by the enactment of the 2006 amendment. The court concluded that Norcini had alleged a “concrete injury,” which was definitive and not hypothetical or contingent. Therefore, his claims were ripe. Canty v. City of Nacogdoches, 2009 Tex. App. LEXIS 7981 (Tex. App. – Tyler October 14, 2009, no pet.) For actions seeking declaratory judgment and injunction regarding the rezoning of neighboring property, a plaintiff does not have standing unless the rezoning affects the plaintiff differently than other members of the general public. A property owner has standing to challenge an ordinance rezoning neighboring property where rezoning would inflict on that owner a special and peculiar injury. The landowners’ complaint about the rezoning was that it was not done according to proper procedure. This indicated no injury different than what would be suffered by any member of the general public. The property owners pleaded that they were owners of a home located near the rezoned property. It was their burden to assert a particularized, legally protected interest that was actually or imminently affected by the rezoning. However, the court concluded that the injury complained of was merely hypothetical, so the landowners lacked standing to assert their claims for declaratory and injunctive relief.

FALL 2009 NEWSLETTER PREMISES LIABILITY UPDATE

admin — Wed, 21 Oct 2009 02:05:23 +0000

By Dean Foster

Tex. Dept. of Transportation v. Gutierrez, 52 Tex. Sup. J. 780, 2099 Tex. Lexis 300 (Tex. 2009). This appeal posed the question whether loose gravel on a road is a “special defect” under Texas Civil Practice and Remedies Code sec. 101.022(b). Stephanie Gutierrez was commuting to work on FM 624 in Wells County. TxDOT had repaired a portion of the road the previous night, but some excess gravel was left on the road. Gutierrez lost control of her vehicle on the gravel and pulled to the side of the road to inspect her car for damage. While standing near her vehicle, Gutierrez was struck by a second driver that lost control of his vehicle on the same loose gravel. Gutierrez sued TxDOT asserting that the loose gravel constituted a special defect. The jury returned a verdict for Gutierrez. TxDOT filed a post-trial plea to the jurisdiction, which was denied. TxDOT then filed an interlocutory appeal, but a divided court of appeals held the loose gravel was a special defect and the jury had concluded TxDOT had failed to give an adequate warning of the condition. The Texas Supreme Court first noted the Tort Claims Act does not define “special defect” but likens it to “excavations and obstructions.” The central inquiry then is whether the condition is of the same type or class as excavations and obstructions. Because loose gravel does not physically block the road and does not impair a car’s ability to travel on the road in the same manner as an excavation or obstruction, it falls outside the special defect class as a matter of law. As a result, the judgment in favor of Gutierrez was reversed and the case dismissed. Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 483 (Tex. 2009). Entergy contracted with IMC to assist in the performance of certain maintenance, repair and other technical services at its various facilities. The parties agreed that Entergy would provide, at its own cost, workers' compensation insurance for IMC's employees through an owner provided insurance program, or OPIP, in exchange for IMC's lower contract price. John Summers, an IMC employee, was injured while working at Entergy's Sabine Station plant. He applied for, and received, benefits under the workers' compensation policy purchased by Entergy. He then sued Entergy for negligence. Entergy moved for summary judgment on the ground that it was a statutory employer immune from common-law tort suits. See TEX. LAB. CODE § 408.001(a). The trial court agreed and granted judgment for Entergy. The court of appeals reversed. The question for the Texas Supreme Court was then whether a premises owner that contracts for the performance of work on its premises, and provides workers' compensation insurance to the contractor's employees pursuant to that contract, is entitled to the benefit of the exclusive remedy defense generally afforded only to employers by the Texas Workers' Compensation Act. While the Act specifically confers statutory employer status on general contractors who qualify by providing workers' compensation insurance for their subcontractors' employees, it says nothing about whether premises owners who act as their own general contractor are also entitled to employer status, and thus the exclusive remedy defense. The Supreme Court held that the exclusive remedy defense for qualifying general contractors is, likewise, available to premises owners who meet the Act's definition of "general contractor," and who also provide workers' compensation insurance to lower-tier subcontractors' employees. Because Entergy Gulf States, Inc. met the definition of "general contractor" under the Act, and because Entergy otherwise qualified under the Act as having provided workers' compensation insurance under its written agreement with International Maintenance Corporation (IMC), it was entitled to the exclusive remedy defense against the negligence claims brought by IMC's employee, John Summers. The court of appeals' judgment was reversed and judgment rendered for Entergy.

NEWSLETTER WINTER 2010 PRODUCTS LIABILITY UPDATE

admin — Thu, 21 Jan 2010 02:31:36 +0000

By Rocky Little

1. In re: Deere & Co., 53 Tex. Sup. J. 213 (Tex. 2009). On Petition for Mandamus, the Texas Supreme Court considered whether a trial court’s order compelling production of documents was overly broad. In this products liability lawsuit alleging a design defect, the trial court issued an order requiring John Deere to produce documents pertaining to backhoe loaders. However, there was no time limitation, and therefore the documents requested could go back for decades, which was not a reasonable time period. The Supreme Court held that, under the circumstances of this case, documents going back only 15 years were required. 2. Whirlpool Corp. v. Camacho, 53 Tex. Sup. J. 179 (Tex. 2009). In this products liability case, the jury found that a design defect in a Whirlpool clothes dryer caused a fatal fire. The case was appealed to the Supreme Court of Texas to determine whether the dryer design was defective because it incorporated a corrugated lint transport tube as part of its air circulation system. Plaintiff’s expert witness, Clayton, opined that the corrugated lint transport tube caused excessive lint to be blown through the lint chute seal, and that some of the lint particles remained airborne and were drawn into the heater box where they ignited and were circulated to the dryer drum inlet grill. Once there, the lint either passed through one-quarter inch openings in the grill into the drum or ignited more lint that was trapped on the grill which in turn was circulated through the grill openings into the dryer drum, and the ignited lint survived to ignite the clothing in the dryer. Clayton based his opinion in part on lint ignition tests described in a report titled “Final Report on Electric Clothes Dryers and Lint Ignition Characteristics,” prepared by the Consumer Product Safety Commission (CPSC). However, Clayton admitted that the dryers which were tested, and form the basis for the report, were dissimilar to the Whirlpool dryer which allegedly caused the fatal fire. Likewise, Clayton neither performed tests, had tests performed, nor did calculations to determine whether (1) the size of lint particles that could be blown through the lint chute seal would remain airborne in the dryer cabinet; (2) lint particles that were ignited were small enough to pass through the inlet grill’s one-quarter inch openings into the dryer drum and were capable of remaining lit for more than a few seconds or produce sufficient heat to ignite clothes in the dryer drum; or (3) how ignited lint particles small enough to pass through the inlet grill could survive and smolder inside a tumbling clothes load. The Texas Supreme Court did not decide whether Whirlpool’s evidence conclusively proved that Clayton’s opinions were invalid. The court did, however, conclude that the data on which Clayton relied did not support his opinions. Clayton’s opinions therefore were subjective, conclusory, and not entitled to probative weight. As a result, there was no evidence to support the finding that a design defect in the dryer caused the fire. 3. In re: Digitek (R) Litigation, Multidistrict Litigation Panel of Texas, 2009. Plaintiffs in 19 lawsuits pending in 12 counties allege that improperly manufactured Digitek tablets delivered an excessive dosage and caused toxicity-related injuries. Digitek is a generic prescription drug that is used to treat certain abnormal heart rhythms and other problems. Seven Defendants asked the Multidistrict Litigation Panel of Texas to assign a pretrial judge for the 19 cases pending in 12 counties pursuant to Texas Rule of Judicial Administration 13. Rule 13 authorizes the transfer of “related cases” from different trial courts to a single pretrial judge “if transfer will (1) serve the convenience of the parties and witnesses, and (2) promote the just and efficient conduct of the litigation.” It is undisputed that the cases involve the same drug, the same production process, and the same nationwide recall. It is also uncontested that some plaintiffs consume different dosages and have different medical histories and outcomes. The court indicated that the goals of Rule 13 are convenience, efficiency, and justice, and that these goals are furthered by (1) eliminating duplicative and repetitive discovery, (2) minimizing conflicting demands on witnesses, (3) preventing inconsistent decisions on common issues, and (4) reducing unnecessary travel. Therefore, the court concluded that the motion to transfer cases to a single pretrial judge should be granted. However, the court denied the request for a specific judge and indicated that it is improper for a motion to seek transfer to a specific court or county. The court noted that such express requests are improper because Rule 13 is not meant to be a venue-changing or judge-selecting procedure. Rather, the MDL procedure simply promotes convenience to witnesses and parties along with judicial efficiency. 4. Hunter v. Ford Motor Co., (Tex. App. – Waco, November 10, 2009). Bob Hunter was killed in a post-collision fire that occurred after the 1999 Ford F350 diesel pickup truck he was driving collided nearly head on with a Toyota pickup truck. The Toyota’s driver was killed instantly, and Bob’s truck ended up on its side. Bob was alive and conscious with three broken ribs, but his legs were trapped and he was unable to get out. A small fire started which led quickly to the cab area, and by the time a fire truck arrived, Bob’s truck was completely aflame and Bob burned to death. The Hunters sued Ford on the theory that the fire was started by a design defect in the cable connecting the truck’s dual battery system. Ford’s theory was that the source of the fire was flammable transmission fluid spewing from the ruptured transmission housing onto the hot surfaces of nearby engine components. The jury unanimously found that there was no design defect, and the Court of Appeals affirmed the trial court’s judgment. The Waco Court of Appeals noted that the Hunters were required to prove their design defect claim with expert testimony, and that Ford did not have the burden of proof. In other words, Ford was not required to prove that there was no defect, and not having the burden of proof, it need not have presented any expert testimony. Therefore, the alleged unreliability of Ford’s expert testimony was immaterial because holding otherwise would improperly shift the burden of proof to Ford. The court noted that uncontroverted expert testimony may be regarded as conclusive if the nature of the subject matter requires the fact finder (i.e., jury) to be guided solely by the opinion of experts and the evidence is otherwise credible and free from contradictions and inconsistency. The court also noted that an expert’s testimony may be contradicted by the testimony of other witnesses or by cross-examination of the expert witness. The Hunters used four testifying experts at trial to prove their theory that the fire started on the battery cable in the front of the engine compartment. There was one fact witness that testified that he saw fire coming out from under the right front of the truck’s hood, which is consistent with the Hunters’ theory of causation. However, two other fact witnesses testified that they first saw flames coming from other parts of the truck, which is inconsistent with the Hunters’ theory. The court held that even if Ford’s expert testimony was disregarded, the Hunters through their four expert witnesses did not conclusively prove their design defect claim. A reasonable jury could have disbelieved the Hunters’ theory as to how the fire started either because of the disputed testimony among the fact witnesses or because they found the Hunters’ experts or their theory not to be credible. Likewise, a reasonable jury could have disbelieved the Hunters’ experts’ proposed safer alternative designs or it could have believed that the truck was not unreasonably dangerous, based on the record as a whole.

WINTER 2010 NEWSLETTER SUPREME COURT UPDATE – INSURANCE LAW

admin — Thu, 21 Jan 2010 02:44:02 +0000

By Rebecca Raper and Leslie Echols Pitts

D.R. Horton-Texas, Ltd. v. Markel Int'l Ins. Co., 53 Tex. Sup. Ct. J. 170 (Dec. 11, 2009). In D.R. Horton, a general contractor sought a defense and indemnity in a construction defect lawsuit as additional insured on its subcontractor’s CGL policy. The insurer prevailed in the lower courts, arguing that it has no duty, under the eight-corners doctrine, to provide a defense or indemnity because the homeowners’ petition in the underlying liability action did not implicate its named insured, the subcontractor that performed the allegedly defective work. D.R. Horton, the general contractor seeking coverage, argued for the adoption of an exception to the eight-corners doctrine to allow parties to introduce extrinsic evidence relating to coverage-only facts in the duty-to-defend analysis. The Texas Supreme Court refused to consider the extrinsic-evidence exception because the issue had not been properly reserved for appellate review. However, the court went on to address and solidly reject the insurer’s argument that because there was no duty to defend under the relevant pleadings, there was likewise was no duty to indemnify. In holding that there can be a duty to indemnify where there is no duty to defend, the court explained:

The insurer’s duty to indemnify depends on the facts proven and whether the damages caused by the actions or omissions proven are covered by the terms of the policy. Evidence is usually necessary in the coverage litigation to establish or refute an insurer’s duty to indemnify. This is especially true when the underlying liability dispute is resolved before a trial on the merits and there was no opportunity to develop the evidence, as in this case. We hold that even if Markel has no duty to defend D.R. Horton, it may still have a duty to indemnify D.R. Horton as an additional insured under Ramirez’s CGL insurance policy. That determination hinges on the facts established and the terms and conditions of the CGL policy.

Metro Allied Ins. Agency, Inc. v. Lin, 53 Tex. Sup. Ct. J. 174 (Dec. 11, 2009). In Metro Allied, a premium amount for CGL coverage with contractual liability coverage was quoted by the agent and received from the insured contractors. Said coverage was never procured, however. After the contractors' public works contract was terminated, the surety company completed the contract under the performance bond. The contractors settled with the surety and then sued the insurance company and agent in negligence and under the DTPA, alleging that the surety's indemnity claim would have been covered by the CGL policy, had it been issued. At trial, the contractors did not present any expert testimony or other evidence that a typical CGL policy would provide coverage for breach of an indemnity agreement under a performance bond. In the absence of such evidence, the Court found no right of recovery established holding that the DTPA’s producing cause standard contained a cause-in-fact element, and thus required more than simply a misrepresentation of coverage:

The law is clear that misrepresentations about insurance coverage cannot, under the doctrine of estoppel, expand coverage provided in an insurance policy. [citations omitted]. An insurance agent's independent representations may affect his responsibilities to his client, but they cannot add to or alter the coverages of any insurance contract or provision. [citations omitted]. Therefore, Lin's testimony regarding McGlothlin's statements about coverage is no evidence that a contract, had one existed, would actually have covered his damages. There must be proof of an insurance policy that would cover the alleged injury.

Chrysler Ins. Co. v. Greenspoint Dodge of Houston, Inc., 297 S.W.3d 248 (Tex. Oct. 30, 2009). Chrysler represents a rare per curiam case where an opinion was rendered without the benefit of oral arguments. In Chrysler, the issue was whether a known-falsity exclusion applied to defeat coverage for a corporation where the corporation’s employees made defamatory statements against the claimants while knowing that the statements were false. Under the policy’s known-falsity exclusion, coverage for defamation was excluded for statements made or directed by the insured with knowledge of their falsity. The intermediate appellate court held that the exclusion was inapplicable to the insured company because no corporate officer knew that the defamatory statements were false. The Texas Supreme Court, however, disagreed, holding that the exclusion applied because the employees’ knowledge of the falsity of the defamatory statements must be imputed to the corporation because there was a finding that the employees involved – a general manager, a comptroller, and a used car sales manager - were corporate vice-principals. As such, the exclusion applied and the insured company took nothing against the insurer.

Rehearing was denied in the case on December 11, 2009.

NEWSLETTER WINTER 2010 COMMERCIAL TRUCKING LITIGATION UPDATE

admin — Thu, 21 Jan 2010 02:46:18 +0000

By Dean Foster

“Bodily Injury” to any fellow “employee” of the “Insured” arising out of and in the course of the fellow “employee’s” employment or while performing duties related to the conduct of your business.

The court noted that the Motor Carrier Safety Act and its attendant regulations govern the meaning of terms under insurance policies designed to comply with federal requirements for motor carriers. Because evidence pertaining to Williams’ employment relationship with Moses fell outside the eight corners of the pleadings and policy, the lower court held that it could not find Williams to be a statutory employee. The Court of Appeals found that the underlying complaint did not establish Moses’ role in the truck at the time of the accident, and therefore a determination of his status as an “employee” required consideration of evidence outside the eight corners of the Complaint and the policy. The District Court inquired into whether Williams qualified as a statutory “employee” under the statute, but applied a strict “eight corners” approach in doing so. Ooida urged the Appellate Court to examine the extrinsic evidence under an exception to the eight corners rule recognized by some Texas Appellate Courts. In allowing an exception to the eight corners rule, the Court of Appeals relied on prior statements of the Texas Supreme Court indicating that it would recognize an exception in the limited case where it is initially impossible to discern whether coverage is potentially implicated and when the extrinsic evidence goes solely to a fundamental issue of coverage which does not overlap with the merits of or engage the truth or falsity of any facts alleged in the underlying case. As a result, based on a review of the extrinsic evidence, including Williams’ deposition, the Court of Appeals held that Moses was a statutory “employee” under §390.5 of the Motor Carrier Safety Act and the fellow employee exclusion applied to negate Ooida’s duty to defend the underlying suit.

NEWSLETTER WINTER 2010 PREMISES LIABILITY UPDATE

admin — Thu, 21 Jan 2010 02:48:08 +0000

By Dean Foster

City of Waco v. Debra Kirwan, Individually and as Representative of the Estate of Brad McGehee, 53 Tex. Supp. J. 140 (Nov. 20, 2009) In this case, the Supreme Court was considering whether a landowner owes a duty, under the Recreational Use statute, to recreational users to warn or protect them against the danger of a naturally occurring condition or otherwise refrain from gross negligence with respect to the condition. The court found that a landowner owes no such duty. On April 24, 2004, Brad McGehee was watching boat races in Cameron Park, a municipal park in the City of Waco. McGehee was sitting on top of a cliff in an area known as Circle Point, when, the plaintiffs alleged, a solid rock ground collapsed underneath McGehee, causing him to fall approximately 60 feet to his death. The Municipal Services Director for the City of Waco swore in an affidavit that the cliff was a naturally occurring cliff consisting of loose rock and natural cracks, that it was not created by the City of Waco nor had the City altered, modified, or excavated the limestone cliff beyond the stone wall in front of the cliff. Plaintiff filed a premises liability suit against the City of Waco, alleging that McGehee’s death was proximately caused by the gross negligence of the City, thus waiving the City’s immunity against suit and liability under the Texas Tort Claims Act. While the original lawsuit was pending, the Texas Supreme Court issued its decision in State v. Shumake, 199 S.W.3d 279 (Tex. 2006). Shumake was another case which addressed the Recreational Use statute and defined gross negligence as “an act or omission involving subjective awareness of an extreme degree of risk, indicating conscious indifference to the rights, safety, or welfare of others.” As evidence of the City of Waco’s subjective awareness of the cliff’s alleged extreme degree of risk, Kirwan relied on a student report which had been submitted to the City and had warned of falling rocks in Cameron Park and had recommended the use of warning signs. As evidence of the City’s alleged conscious indifference to these risks, Kirwan cited the lack of any signs specifically warning of the risk of fatality resulting from the condition of the Cameron Park premises and evidence showing that despite the fact that other park patrons had died or had been seriously injured by the condition, the City continued to allow park patrons into the area with the unstable rock. The City responded by filing a Second Amended Plea to the Jurisdiction arguing that Kirwin’s pleadings affirmatively negated the court’s jurisdiction. More specifically, the City relied on Shumake to argue that as a matter of law a landowner may not be grossly negligent for failing to warn of the inherent dangers of nature. The trial court agreed and signed an order dismissing the case against the City. The Court of Appeals reversed the trial court’s judgment and remanded, reasoning that Shumake did not suggest that all natural conditions are per se open and obvious or that a natural condition may never serve as a basis of premises defect claim. Instead, the Court of Appeals held that the Recreational Use statute permits premises defect claims based on natural conditions as long as the condition is not open and obvious and the plaintiff furnishes evidence of the defendant’s alleged gross negligence. The Court of Appeals concluded that Kerwan’s pleadings and evidence raised fact issues as to the City’s alleged gross negligence. Noting that the Recreational Use statute was enacted to encourage government and private parties to open their land to the public, the Texas Supreme Court stated it is generally unreasonable and unduly burdensome to ask a landowner to seek out every naturally occurring condition that might be dangerous and then warn of the condition or make it safe. In most circumstances, the court noted, the magnitude of the burden in requiring a landowner to make perfectly safe, or post signs warning of, every potentially dangerous naturally occurring condition on his property would be immense. As a result, the court determined that, with some exceptions that did not apply in this case, a landowner generally owes no duty under the Recreational Use statute to warn or protect against the dangers of natural conditions, and the City did not owe McGehee a duty in this case. The judgment of the Court of Appeals was therefore reversed and the case was dismissed with prejudice. Haney v. Jerry’s GM,Inc., No. 08-07-00183-CV (Tex.App.—El Paso, Feb. 12, 2009), 2009 Tex. App. Lexis 1056 This was an appeal from a summary judgment dismissing plaintiff’s premises liability and negligent activities suit. Plaintiff slipped on ice located in the parking lot of a car dealership where he was making a vehicle exchange. The Court of Appeals affirmed the trial court’s dismissal. Plaintiff was employed by a company transporting dealer trade vehicles. On December 9, 2005, Mr. Haney was told a trade had been completed, and that he would need to drive to Weatherford, Texas to exchange a Chevrolet Silverado. Mr. Haney knew there had been an ice storm in Weatherford three days before his trip. He first encountered ice upon arriving at the dealership. He saw the ice, and found a spot to park in front of the showroom where the ice had already melted. As Mr. Haney was getting ready to unlock the truck he was to transport, he slipped on a patch of ice he did not see. Mr. Haney knew that there was ice present on the lot, but did not think there was any where he was trying to get into the truck. Upon his return to Kerrville, Texas, Plaintiff went to the emergency room and was treated and released. A few days later, Plaintiff went to see an Orthopedist and was diagnosed with a broken fibula and L-2 compression fracture of his spine. Mr. Haney then filed suit under premises defect and negligent activity theories of recovery. Plaintiff tried to distinguish his case from other cases where courts have held that a landowner is not responsible for a naturally occurring condition by arguing that a sales lot of a dealership is its retail area and is therefore distinguishable from the other cases. The Court of Appeals disagreed and found that it was still just a parking lot. The court therefore ruled consistently with the other Courts of Appeals that have addressed similar issues and held that naturally forming ice is not an unreasonably dangerous condition that would impose liability on a premises owner/operator.

WINTER 2010 NEWSLETTER CIVIL RIGHTS LAW UPDATE

admin — Thu, 21 Jan 2010 02:52:32 +0000

By John Husted

United States Supreme Court

Michigan v. Fisher, __ U.S. __, 130 S. Ct. 546 (December 7, 2009) Officers do not need iron-clad proof of a likely, serious, life-threatening injury to invoke the emergency aid exception to the Fourth Amendment prohibition of warrantless searches.Responding to a disturbance complaint, police officers arrived at a household that was in considerable chaos, (blood outside, a pickup with a smashed window in the driveway, broken house windows). Through the window, the officers saw the Defendant, Fishers, screaming and throwing things and he had a cut on his hand. After Fisher refused the officers entry, they pushed the door in and went into the house, at which point Fisher pointed a rifle at one of the officers. Fisher was charged with assault with a dangerous weapon and possession of a firearm during the commission of a felony, but the trial court concluded that the officer violated the Fourth Amendment upon entering the house, so the court suppressed the resulting evidentiary statements about Fisher pointing a rifle at the officer. The Court concluded that the lower court’s decision was contrary to the emergency aid exception to the Fourth Amendment. It was reasonable to believe that Fisher had hurt himself and needed treatment that in his rage he was unable to provide, or that Fisher was about to hurt, or had already hurt someone else.

Fifth Circuit

World Wide Street Preachers Fellowship v. Town of Columbia, __ F.3d __, 2009 U.S. App. LEXIS 27993 (5th Cir. December 21, 2009) Unless a subordinate’s actions are sufficiently extreme—for instance, an obvious violation of clearly established law—a policymaker’s ratification or defense of his subordinate’s actions is insufficient to establish an official policy or custom for municipal liability under §1983. Officers of the Columbia Police Department violated the First Amendment rights of World Wide Street Preachers Fellowship (WWSPF) members by jailing them for various violations stemming from a public demonstration. WWSPF brought suit pursuant to §1983 against Columbia. In order to show that Columbia ratified the officers actions, thereby establishing an official policy or custom for municipal liability for the constitutional violation, WWSPF pointed to a letter that Columbia sent to WWSPF’s counsel alleging that the police officers were within the law to ask them to relocate their demonstration The Fifth Circuit concluded that Columbia’s letter did not constitute ratification, because, among other things, it listed other bases for why the officers actions were within the law. Therefore, it was not sufficiently extreme to establish an official policy or custom. Hoog-Watson v. Guadalupe County, __F.3d__, 2009 U.S. App. LEXIS 27639 (5th Cir. December 16, 2009) For a search and seizure suit, even where a plea agreement was entered on the proceeding that discussed dropping “criminal charges” against the plaintiff, there is a genuine issue of fact as to whether a §1983 claim can be dismissed under the principles of Heck v. Humphrey when the proceeding took place before a Justice of the Peace and it followed the procedures of a civil statute. County officials conducted a warrantless search of Hoog-Watson’s property and seized several animals that they perceived were in eminent danger. Officials later brought a proceeding against Hoog-Watson before the local Justice of the Peace, but before any hearing, they reached an agreement wherein Hoog-Watson agreed to pay some of the county’s costs and submit to periodic inspections. Hoog-Watson later brought suit under §1983 alleging that the search and seizure was unconstitutional. The defendants filed a motion for summary judgment on the basis of, among other things, the doctrine of Heck v. Humphrey. According to the Supreme Court decision, Heck v. Humphrey, if a judgment in favor of the plaintiff in a §1983 suit would necessarily imply the invalidity of the plaintiff’s previous conviction or sentence, the complaint must be dismissed. Defendants provided evidence that, if taken alone, would have justified summary judgment, because it supported the position that the proceeding that was settled was criminal in nature; however, the Fifth Circuit court found that Hoog-Watson created a fact question by showing that the proceeding took place in the Justice Court, which do not have jurisdiction over criminal animal cruelty proceedings, and the proceeding followed the procedures of the Texas Health and Safety Code, which is a civil statute. Therefore, summary judgment under Heck v. Humphrey was improper. Wernecke v. Garcia, __F.3d__, 2009 U.S. App. LEXIS 27636 (5th Cir. December 15, 2009) A temporary emergency custody order to seize a child from his or her parents pursuant to Texas Family Code §262.102 meets the warrant requirement in the context of a search of the child’s home to locate the child. However, the warrantless seizure of that child’s siblings in the absence of any imminent danger is a constitutional violation. The Wernecke’s had four children, three boys and a girl. The girl successfully underwent chemotherapy, but her physicians recommended that she also receive radiation treatment to prevent reoccurrence of the disease, but the Wernecke’s refused consent. Protective Services obtained an order for temporary custody of the girl, but Garcia, the investigative specialist, did not seek or obtain a warrant entitling her to enter and search the home. Garcia entered the home and the daughter was not there; however, a Protective Services official, Trainer, authorized Garcia to seize the three boys without a custody order, and Garcia took custody of the two boys that were present. The Wernecke’s filed a §1983 action alleging violations of their Fourth and Fourteenth Amendment rights. Garcia and Trainer’s motion for summary judgment based on qualified immunity was denied by the district court. The Fifth Circuit court found it reasonable and permissible for Garcia to enter the home pursuant to the order for the daughter; however, an exigency did not exist that justified the removal of two of the boys from the home despite several factors, such as the condition of the home, weighing in favor of the reasonableness of the removal. Peterson v. City of Fort Worth, 588 F.3d 838 (5th Cir. November 17, 2009) Without proper context, pointing to 27 incidents of excessive force by a police department does not suggest a pattern so common and well-settled as to constitute a custom that fairly represents a municipal policy of condoning excessive force. After a night of heavy drinking, Peterson and his wife went to sleep in their truck instead of driving home. Police officers attempted to awaken Peterson, and he resisted. While cuffed, an officer kneed Peterson in the thigh, causing an injury that required extensive medical treatment. Peterson filed a §1983 action against the City alleging that his Fourth Amendment rights were violated through an unlawful detention and the use of excessive force. The district court granted summary judgment for the City. The Fifth Circuit court concluded that though there was sufficient evidence to establish Peterson’s excessive force claim, there was no municipal liability for the alleged misconduct of the individual officers. Conceding that there was no applicable written policy, Peterson attempted to show evidence of a pattern of excessive force in making arrests, by pointing to 27 complaints of excessive force between 2002 and 2005. The Fifth Circuit court concluded that the 27 incidents do not show an official policy of condoning excessive force, because the plaintiffs failed to provide context—such as the actual number of arrests made or the number of officers in the department—that would show a pattern of establishing a municipal policy. Brewster v. Dretke, 587 F.3d 764 (5th Cir. November 10, 2009) A court need not offer an opportunity for a pro se litigant to amend his complaint before it is dismissed when the litigant gives no indication that he did not plead his best case. Brewster, a Texas inmate proceeding pro se and in forma pauperis, alleged that during a shake-down of his cell, prison officials verbally abused him and confiscated some items including his spare glass eye. Brewster challenged both the procedure and the merits of the district court’s dismissal of his §1983 action. Though in general a pro se litigant should be offered an opportunity to amend his complaint before it is dismissed, the Fifth Circuit noted that granting leave to amend is not required if the plaintiff has already pleaded his “best case”. Since Brewster gave no indication that he did not plead his best case or state any material facts that he would have included in an amended complaint, he failed to show that the district court abused its discretion by dismissing his complaint without first giving him leave to amend. Reyes v. City of Farmers Branch, 586 F.3d 1019 (5th Cir. November 3, 2009) Under the Voting Rights Act (“VRA”), only voting-age citizens should be considered when determining the population of “voters” who “could form a majority”. The City uses a numbered at-large system to elect its five-member city council. Instead of having voters elect a candidate for a particular geographical district, candidates run for a particular numbered position and all voters can vote for all five slots. Three Hispanic citizens of the City of Farmers Branch brought suit under the VRA against the City alleging that it diluted the strength of its Hispanic vote. The district court rejected the Plaintiffs’ claim that this process dilutes the voting rights of Hispanic residents in violation of §2 of the VRA. On appeal, the Fifth Circuit court considered the Plaintiffs’ argument that under the recent Supreme Court’s decision in Bartlett v. Strickland, only the voting-age population, as opposed to the citizen voting-age population, should be considered when determining whether minority voters could form a majority in a single-member district. The Fifth Circuit court, siding with several sister Circuits, disagreed, because the Bartlett opinion uses the terminology “minority voters”, and only citizens can be “voters”. Hill v. Carroll County, 587 F.3d 230 (5th Cir. October 28, 2009) An officer’s use of four-point restraints (hog tying) on an obese, physically aggressive female arrestee for transfer did not constitute excessive force, even if the cause of the woman’s death during transport was positional asphyxiation from the four-point restraint position. Carroll County officers responded to a call about a fight between two women. One of the women, Loggins, attacked one of the officers, and spiritedly fought against the officers attempts to restrain her. After failing several times to deposit Loggins in the car with just handcuffs, the officers put her into a four-point restraint using additional sets of hand-cuffs. Loggins, who was obese and hypertensive, was transported several miles in this position, and transferred to a different vehicle, while continuing to struggle excessively. Upon arrival at the jail, the driving officer left Loggins to go request assistance with removing her. By the time the officers returned to the car, Loggins had died. The exact cause of her death is unclear, but it may have been from positional asphyxia. Loggins’ administrator, her mother, filed an excessive force claim against the county and several officers. The Fifth Circuit held that no reasonable jury could have found that the officers used excessive force to subdue Loggins. The Plaintiff could not show that four-point restraints pose such a serious risk of inflicting death by positional asphyxia that the method is necessarily disproportionate to the need to restrain, nor that the officers were unreasonable to use the method of restraint. Villafranca v. United States, 587 F.3d 257 (5th Cir. October 28, 2009) Federal law enforcement agents can invoke the Texas state law enforcement privilege. DEA agents entered a salon to execute a search warrant while Villafranca was waiting in the lobby for a haircut. Villafranca refused the agents’ orders to end his cell phone conversation and remain seated. When he resisted the agents’ subsequent attempt to search, he was forced to the ground and forcibly cuffed. Villafranca claimed that he suffered severe shoulder injuries as a result and filed suit under the Federal Tort Claims Act alleging that the DEA agents committed the torts of assault and negligence under Texas Law. The Government asserted the affirmative defense that its agents’ conduct was privileged under Texas law. In certain circumstances, Texas Penal Code §9.51 justifies the use of force by a “peace officer” when reasonable and immediately necessary to assist in making an arrest or search. The Fifth Circuit held that the law provides a statutory civil privilege defense for all “peace officers,” including Federal agents. Manis v. Lawson, 585 F.3d 839 (5th Cir. October 15, 2009) Under the circumstances, a police officer could have reasonably believed that a suspect in a car who refused orders to show his hands posed a threat of serious physical harm to himself or to others if the suspect moved his arm out of sight and reasonably appeared to be reaching under his seat for a weapon, such that the officer’s use of deadly force was objectively reasonable. Police officer Zemlik fatally shot Manis while responding to a call that Manis’s vehicle was idling on a railroad intersection. Manis’s children brought this Fourth Amendment case alleging excessive force. Zemlik and other witnesses confirmed that Manis ignored approximately five commands to show his hands and repeatedly reached under the front seat, and that Zemlik fired at Manis when Manis made a bigger lunge to retrieve something. Since deadly force is reasonable when a suspect moves out of the officer’s line of sight such that the officer could reasonably believe the suspect was reaching for a weapon, the Fifth Circuit court concluded that Zemlik’s use of deadly force was reasonable. Furthermore, Zemlik would be entitled to qualified immunity, since under applicable precedent, the use of deadly force is upheld when a suspect reached below an officer’s sight line in defiance of contrary orders and appeared to retrieve a gun. Fairley v. Hattiesburg, 584 F.3d 660 (5th Cir. September 29, 2009) A plaintiff’s Voting Rights Act (“VRA”) challenge to the redistricting of a city’s voting wards fails if it supports its challenge with a plan that would exclude bona fide city residents from voting. Also, it is not arbitrary or discriminatory for a city to base its redistricting on the voting age population rather than voter registration figures. The City’s voting populations were nearly evenly split between black and white voters, but the redistricting plan allegedly “packed” primarily white university students living in dormitories into one of the white majority voting wards, preventing the election of a black city council member form that ward. The City had a black mayor elected at large, two black council members from the two black-majority wards, and three white council members from the white-majority wards. Black voters brought suit challenging a redistricting plan, alleging that it packed the college students into one of the white wards and unnecessarily packed black voters into two wards, and, therefore denied the black voters equal opportunity and violated §2 of the VRA. The district court decided for the City. The Fifth Circuit court affirmed, because the plaintiffs could not show the possibility of creating more than the existing number of reasonably compact districts with a sufficiently large minority population to elect candidates of its choice in order to establish a violation of §2 of the VRA. Their proposed plan was faulty because it was based on excluding the college students, and bona fide City residents may not be excluded for voter apportionment purposes. Furthermore, the redistricting plan did not violate the one person, one vote principle of the Equal Protection Clause, because, the wards under the new redistricting plan were within the accepted population deviance percentages. There was no showing that the redistricting was arbitrary or tainted by discrimination, where the City based its figures on the voting age population figures rather than voter registration figures. RTM Media, L.L.C. v. City of Houston, 584 F.3d 220 (5th Cir. September 28, 2009) A city’s sign code that places a lesser value on “off-premise” than “on-premise” signs, while excluding from regulation all noncommercial signs, is constitutional where it is shown that commercial billboards pose a greater nuisance than noncommercial ones. The City sued RTM for violating its sign code and being a public nuisance. The City’s sign code threatens to eliminate most of the 59 billboards owned by the outdoor advertising company RTM. RTM brought a federal suit alleging that the code violates the First Amendment. The code requires the abatement of off-premise signs while allowing on-premise signs and excluding entirely from regulation all noncommercial signs. Applying the First Amendment standards articulated by the Supreme Court in Metromedia and Discovery Network, the Fifth Circuit court determined that the City’s sign code was constitutional. Even with the commercial/noncommercial distinction, the City’s code was carefully calculated to ameliorate aesthetic and safety problems caused by billboards, because the City produced substantial evidence that the vast majority of area billboards are commercial and that the code had been effective in reducing signage by half over a 28-year period. Boyd v. Driver, 579 F.3d 513 (5th Cir. August 13, 2009) A handwritten pro se complaint is read liberally in order to find inexplicit allegations of a constitutional deprivation that would support an inmate’s Bivens action. Boyd, a federal prisoner who was tried and acquitted on assault charges between him and prison employees, alleged that the prison employees committed perjury at his assault trial and destroyed and tampered with video evidence showing he was a victim. He filed a Bivens action and labeled his cause of action a “malicious prosecution conspiracy.” The Fifth Circuit court held that since the assertion of malicious prosecution states no constitutional claim, that claim alone does not support a Bivens action; however the court construed Boyd’s handwritten pro se complaint liberally, and found that his description of the defendants’ actions to manufacture evidence along with perjured testimony to obtain a wrongful conviction constituted an allegation of a Due Process Clause violation, thereby supporting a Bivens action.

Courts of Appeals of Texas

Scott v. Crites, 2009 Tex. App. LEXIS 6687 (Tex. App.—Corpus Christi, August 26, 2009, no pet.) A court has the authority to dismiss an action as frivolous even before service of process or an answer by the defendants, and the Texas Department of Criminal Justice’s (TDCJ) policy limiting the wearing of Native American medicine bags by inmates and authorizing their inspection does not violate the Religious Land Use and Institutionalized Persons Act (RLUIPA). Inmate Scott, a Cherokee Native American, was required by TDCJ employees to have the small, sealed medicine bag that he wore around his neck searched before attending a scheduled visitation with his spouse. The TDCJ Chaplaincy Policy Manual limits the wearing of a medicine bag to the offender’s cell or immediate bunk area and to and from religious services. TDCJ policy also states that a medicine bag may be inspected at any time for valid security reasons. Scott brought a §1983 action, primarily based on his rights under RLUIPA, against TDCJ employees for the inspection. The defendants did not file an answer, but the attorney general suggested that, because there is no probability that Scott would prevail, his suit should be dismissed as frivolous. Scott filed a motion for default judgment, and without holding a hearing or ruling on the motion, the trial court dismissed Scott’s lawsuit as frivolous under chapter 14. The court of appeals concluded that the court had the authority to dismiss Scott’s action even though the defendants failed to file an answer. The court found that Scott presented no argument showing how the TDCJ policy substantially burdens his exercise of religion under RLUIPA.

WINTER 2010 NEWSLETTER LOCAL GOVERNMENT LAW UPDATE

admin — Thu, 21 Jan 2010 03:02:24 +0000

By Joshua Skinner

Texas Supreme Court

City of Waco v. Kirwan, 2009 Tex. LEXIS 969, 53 Tex. Sup. J. 140 (November 20, 2009) (publication status pending) A landowner, lessee, or occupant, under the Recreational Use Statute, does not generally owe a duty to others to protect or warn against the dangers of natural conditions on the land, and therefore may not ordinarily be held to have been grossly negligent for failing to have done so. McGehee was on the edge of a cliff in a public park when part of the cliff crumbled and McGehee fell to his death. Kirwan brought suit against the City on behalf of McGehee’s estate alleging that the City should be held liable. The City filed a plea to the jurisdiction, contending that there was no waiver of governmental immunity as to natural conditions that the City had not modified. Kirwan contended that governmental immunity was waived by the Texas Tort Claims Act and the Recreational Use Statute because, Kirwan argued, the City’s conduct was grossly negligent. The Court held that it is possible for a local government to be held liable under the gross negligence standard for failing to warn of premises defects that result from natural conditions, but that the dangers of falling off of a cliff are not of the sort that require the City to warn visitors to public parks.

Texas Courts of Appeals

City of Houston v. Cheman, 2010 Tex. App. LEXIS 255 (Tex. App. – Houston [1st Dist.] January 14, 2010, no pet. h.) Approval of a building permit based on factually inaccurate statements by the applicant cannot provide a basis for equitable estoppel when the City notifies the applicant that the structure built will need to be removed. Cheman was notified by the City that a brick wall on his property was in violation of City Code because it was falling down. Cheman began repairs on the wall without requesting a building permit. After the City cited Cheman for lack of a building permit, Cheman requested a building permit and submitted an affidavit asserting that the brick wall was entirely on Cheman’s property and acknowledging that any inaccuracies in the affidavit could mean that Cheman would be responsible for paying to remove the new brick wall. The City later discovered that the wall extended onto City property and issued a notice to Cheman stating that he must remove the wall. Cheman brought suit against the City alleging equitable estoppel as well as various other causes of action. The trial court denied the City’s plea to the jurisdiction. The City appealed and the Court of Appeals reversed the decision of the trial court. The Court of Appeals held that there was no basis for holding the City equitably estopped from requiring Cheman to remove the new wall. Miers v. Tex. A&M Univ. Sys. Health Sci. Ctr., 2009 Tex. App. LEXIS 9818 (Tex. App. – Waco December 30, 2009, no pet. h.) An allegedly negligent decision to perform a medical procedure does not constitute the use or misuse of tangible personal property under the Texas Tort Claims Act. Consequently, so long as the procedure was performed correctly, there is no waiver of governmental immunity merely because the decision to perform the procedure was negligently made. Miers brought suit alleging that Texas A&M should be held liable for allegedly negligent dental services received at the university’s Baylor College of Dentistry. Miers alleged that governmental immunity was waived under the “tangible personal property” provision because tangible personal property – dental equipment – was used in performing the dental services that Miers received. Texas A&M filed a motion for summary judgment, alleging that there was no waiver of governmental immunity because the alleged negligence occurred in the decision to perform the procedure, not in the use of the dental equipment itself. In other words, Miers did not contend that the dental equipment was used negligently, but that the resident dentist who provided the dental services negligently chose to perform the procedure at all. The Court held that negligent decisions to use tangible personal property do not constitute negligent use of tangible personal property. City of Tyler v. Smith, 2009 Tex. App. LEXIS 9457 (Tex. App. – Tyler December 14, 2009, no pet. h.) Landowners can file a declaratory judgment action to determine whether a local government had or has an easement on the landowner’s property because there is no waiver of governmental immunity as to such a claim. The Smiths brought suit against the City of Tyler seeking a declaration as to whether the City had or has a drainage easement on the Smiths’ property. The City filed a plead to the jurisdiction contending that there was no waiver of governmental immunity as to the Smiths’ claim. The Court agreed, holding that there is no waiver of immunity as to whether the City had an easement because that would constitute an attempt to recover damages from the City and that there is no waiver of immunity as to whether the City has an easement because that would constitute an attempt to control the City’s actions. The Court held that the declaratory nature of the action does not change the fact that there is no waiver of governmental immunity. City of Arlington v. Randall, 2009 Tex. App. LEXIS 9874 (Tex. App. – Fort Worth December 10, 2009, pet. filed) If a plaintiff brings claims against a governmental entity and its employees for alleged violations of the Texas Constitution and requests damages, the governmental entity may move for automatic dismissal of its employees pursuant to Texas Civil Practice & Remedies Code Section 101.106(e). Randall brought suit against the City of Arlington and one of its police officers in her official capacity alleging tort and Texas Constitutional claims relating to a warrant that was issued for Randall’s arrest. The City moved for dismissal of its officer pursuant to Texas Civil Practice and Remedies Code Section 101.106(e), which permits a governmental entity to move for dismissal of its employees from a lawsuit when both the entity and the employees are sued and the claim brought against the entity is brought “under” the Texas Tort Claims Act. The trial court denied the City’s motion. The Court of Appeals held that the trial court should have granted dismissal of the employee as to the negligence claim and the constitutional claim for damages. However, the Court held that the individual was not entitled to dismissal as to the constitutional claim for injunctive and declaratory relief. The Court held that when a plaintiff seeks damages for alleged violations of the Texas Constitution, such constitutional claims qualify as being “under” the Texas Tort Claims Act for purposes of Section 101.106(e). Dallas County v. C. Green Scaping, 2009 Tex. App. LEXIS 9341 (Tex. App. – Dallas December 9, 2009, no pet. h.) Failure to present a claim to the County Commissioners Court as required by Section 89.004 of the Texas Local Government Code is a jurisdictional defect. Failure to make the required presentation of a claim deprives the courts of jurisdiction because there is no waiver of governmental immunity. C. Green Scaping (Greenscaping) brought suit against Dallas County in connection with an alleged failure to pay Greenscaping amounts due under a landscaping contract. After the lawsuit was filed, the County asserted that Greenscaping had failed to provide sixty-days pre-suit notice of its claim to the County Commissioners Court as required by Section 89.004 of the Texas Local Government Code. Greenscaping promptly provided the notice, but the County filed a motion to dismiss and plea to the jurisdiction. The trial court delayed hearing the motion and plea until after sixty-days from the notice provided by Greenscaping. Then the trial court denied the motion and the County appealed. The Court of Appeals held that the pre-suit notice requirement in Section 89.004 is a jurisdictional defect and that there is no waiver of governmental immunity if the notice is not provided. Since notice was not provided by Greenscaping sixty-days prior to the suit, the Court reversed the decision of the trial court and rendered judgment in favor of the County. McKinney & Moore, Inc. v. City of Longview, 2009 Tex. App. LEXIS 9299 (Tex. App. – Houston [14th Dist.] December 8, 2009, no pet. h.) When a contract permits a contractor to rely on a report provided by a governmental entity, or an agent of the governmental entity, governmental immunity is waived for a breach of contract claim based on the negligent preparation of the report. The City of Longview hired McKinney & Moore, Inc. (MMI) to construct Lake O' the Pines Raw Water Intake Structure. The contract entered into between the City and MMI permitted MMI to rely on a geotechnical report prepared by URS Grenier Woodward Clyde (URS). During the course of construction, MMI encountered two problems that substantially increased its costs: (1) high rainfall which led to unprecedented lake levels, and (2) a layer of iron ore rock which had not been revealed in the URS report. MMI requested that the City cover the additional expenses incurred by MMI resulting from the two problems. The City denied that it was responsible for the additional expenses and MMI brought suit. The City filed a plea to the jurisdiction and a motion for summary judgment, both of which were granted by the trial court. In its plea to the jurisdiction, the City argued that MMI’s claims were barred by governmental immunity because the claims were tort claims rather than contract claims and because MMI was seeking consequential damages. On appeal, the Court of Appeals held that MMI’s claim based on the water level was a tort claim rather than a breach of contract claim. However, since the contract specified that MMI could rely on the URS report, the Court held that MMI’s claim based on the URS report was a breach of contract claim, for which governmental immunity was waived. In addition, the Court held that the damages being sought by MMI were direct damages rather than consequential damages because the contract language contemplated them. As a result, governmental immunity was waived as to the damages claim. However, the Court upheld the grant of summary judgment and affirmed judgment for the City. Solis v. Tex. Dep’t of Crim. Justice, 2009 Tex. App. LEXIS 9248 (Tex. App. – Waco December 2, 2009, no pet.) There is no waiver of governmental immunity when a prison inmate contracts an illness from a contaminated razor provided to him by prison employees. Solis brought suit against the Texas Department of Criminal Justice (TDCJ) pursuant to the Texas Tort Claims Act alleging that, while an inmate with the TDCJ, an employee with the prison provided him with a razor to use for shaving that was contaminated and use of the razor led to him contracting Hepatitis C and Herpes. The TDCJ filed a plea to the jurisdiction arguing that there was no waiver of governmental immunity and the trial court granted the plea. On appeal, Solis contended that governmental immunity was waived because he was alleging negligence in the condition or use or tangible personal property. The Court of Appeals rejected Solis’ argument, holding the claim was not based on the “condition” of the razor, as that term is used in the Texas Tort Claims Act, because Solis was not alleging that the razor lacked an integral safety component. In addition, Solis’ claim did not fit under the “use” of tangible personal property exception because Solis, rather than an employee of the TDCJ, was the person using the tangible personal property. Doye Baker v. City of Robinson, 2009 Tex. App. LEXIS 9250 (Tex. App. – Waco December 2, 2009, no pet.) A city’s misrepresentation of the zoning classification of a piece of real property as inducement to get a purchaser to purchase the property is not a governmental function for which the city is entitled to governmental immunity. Doye Baker (Baker) brought suit against the City of Robinson alleging breach of contract in connection with the sale of real property by the City to Baker. The City allegedly misrepresented the zoning classification for the property in order to induce Baker to purchase the property. The City filed a motion for summary judgment, arguing that governmental immunity was not waived because zoning is a governmental rather than proprietary function. Baker responded by arguing that the sale of the property was a proprietary function, for which there is no governmental immunity, rather than a governmental function. The trial court granted the City’s summary judgment motion. The Court of Appeals reversed the grant of summary judgment, holding that the dispute related to the sale of the property, not the ability of the City to zone the property in a particular fashion. The dispute did not relate to the governmental function of zoning. Consequently, the Court concluded that the City had not conclusively established that it is entitled to governmental immunity from Baker’s claim. Note: In contrast, in Smith v. City of Blanco, 2009 Tex. App. LEXIS 7889 (Tex. App. – Austin 2009, no pet.), discussed below, the Austin Court of Appeals held that the governmental/proprietary function distinction has not been extended to breach of contract claims. Wardlaw v. Tex. Dep’t of Transp., 2009 Tex. App. LEXIS 9063 (Tex. App. – San Antonio November 25, 2009, no pet.) In order to establish a special defect claim for which governmental immunity is waived by the Texas Tort Claims Act, the plaintiff must allege that the dangerous condition poses a threat to users of the roadway. Gwendolyn Wardlaw was traveling down the Guadalupe River on an inner tube with her husband and two friends. As they approached the point where FM 1350 cross the river, Ms. Wardlaw and her two friends were sucked into the man-made culverts going underneath the road. Due to recent heavy rain and flooding, however, one of the culverts was clogged with debris and Ms. Wardlaw drowned. Mr. Wardlaw brought suit against the Texas Department of Transportation (TxDOT) alleging premises and special defect claims. TxDOT filed a combined plea to the jurisdiction and motion for summary judgment, which was granted by the trial court. The Court of Appeals affirmed the decision of the trial court. On the premises defect claim, the Court held that Mr. Wardlaw had failed to established that TxDOT had actual knowledge of the clogged culvert, rather than merely knowledge that the culvert tends to become clogged under similar conditions. As to the special defect claim, the Court held that, to establish a special defect for which governmental immunity is waived under the Texas Tort Claims Act, the dangerous condition must pose a threat to users of a roadway. Because Ms. Wardlaw was not a user of any roadway and because the clogged culvert did not pose a threat to ordinary users of the roadway, the claim falls outside the Tort Claims Act’s narrow special-defect class as a matter of law. Univ. Med. Ctr. v. Harris, 2009 Tex. App. LEXIS 8965 (Tex. App. – Amarillo November 19, 2009, no pet.) Placement of a towel inside a patient during surgery and failure to remove that towel prior to the conclusion of the procedure constitutes the use of tangible personal property for which governmental immunity is waived by the Texas Tort Claims Act. Harris underwent a surgical procedure (a hysterectomy) at University Medical Center (UMC). During the course of the procedure, the surgeon packed Harris’ intestines with a twelve-by-eighteen inch blue towel. The surgeon failed, however, to remove the towel and, after complaining of severe pain in her abdomen, an additional surgery was performed a month later and the towel was discovered and removed. Harris brought suit against UMC. UMC filed a plea to the jurisdiction, asserting that Harris’ claim did not fall within the waiver of governmental immunity in the Texas Tort Claims Act. The trial court denied the plea and UMC took an interlocutory appeal. The Court of Appeals affirmed, holding governmental employees (a nurse and a surgical technician) were involved in the use of the towel in providing it to the surgeon for insertion into the patient and were jointly responsible with the surgeon for removal of the towel. The Court held that the involvement of the nurse and surgical technician constituted the negligent use of tangible personal property by a governmental employee for which governmental immunity is waived. Berkman v. City of Keene, 2009 Tex. App. LEXIS 8497 (Tex. App. – Waco November 4, 2009, pet. filed) A contract in which a municipality promises to provide water and sewer service in exchange for the conveyance of a piece of real estate to the municipality is not a contract for services to the municipality for which governmental immunity is waived. Berkman brought suit against the City of Keene alleging breach of a contract to provide water and sewer service for a specified period of time in exchange for a piece of real property. The City filed a motion for summary judgment, arguing that Berkman was not a party to the contract in question and that the contract had not been assigned to Berkman. The trial court granted summary judgment and Berkman appealed. The Court of Appeals reversed, holding that the City had not conclusively shown that the contract did not create a covenant running with the land. Since Berkman was the successor in title to the original party to the contract, the Court remanded for further proceedings. The City filed a motion for rehearing, arguing that the contract did not fall within the limited waiver of governmental immunity applicable to contract claims against local governments. The Court of Appeals agreed, vacated its earlier ruling, and dismissed the case for want of jurisdiction. Lieberman v. Romero, 2009 Tex. App. LEXIS 8414 (Tex. App. – Dallas November 3, 2009, no pet.) Section 101.106(f) of the Texas Civil Practice and Remedies Code permits a public official who is sued to file a motion to dismiss asserting that he was acting in the course and scope of his employment and that the case is one that could have been brought against the official’s governmental entity employer. If the case is one that could have been brought against the employer under the Texas Tort Claims Act, then the plaintiff must either plead the case against the employer and drop the public official or have the entire case dismissed. In order for a case to qualify as one that could have been brought against the employer, however, it must be one for which the Tort Claims Act waives governmental immunity, not merely a tort cause of action. Smith v. City of Blanco, 2009 Tex. App. LEXIS 7889 (Tex. App. – Austin October 8, 2009, no pet.) A plaintiff who pleads only claims that are barred by governmental immunity is not entitled to leave to amend his petition to add claims for which governmental immunity might be waived. Smith contends that in 1964 he entered into an oral contract with the City of Blanco to permit the City to construct a reservoir on Smith’s property so long as the City maintained a bridge to Smith’s property. After flood damage occurred in 1974, Smith brought suit against the City and received a judgment holding that the City had entered into the contract. After further damage occurred in 2004, Smith brought suit against the City a second time. The City filed a plea to the jurisdiction, which the trial court granted. Smith argued that governmental immunity was waived because the contract related to a proprietary, rather than governmental, function. The Court of Appeals noted that the proprietary vs. governmental function distinction has not been applied to breach of contract claims. However, the Court concluded that it did not need to decide that issue because, as a matter of state statute, the reservoir and bridge are governmental functions for which the City was entitled to governmental immunity. Smith also argued that he should be permitted to amend his pleadings to allege claims for which governmental immunity might be waived. The Court denied Smith’s request, explaining that Smith is not entitled to amend to add viable claims when the claims currently pled are barred by governmental immunity. Since Smith’s petition affirmatively negated the possibility of jurisdiction, Smith was not entitled to amend to add claims for which jurisdiction might exist. City of Pasadena v. Belle, 297 S.W.3d 525 (Tex. App. – Houston [1st Dist.] October 1, 2009, no pet.) A public official is not entitled to official immunity unless the official considers both the justification for the general course of action taken by the official, as well as the manner in which the official pursues his or her goal. In the context of an emergency police response, the officer must consider other, less dangerous methods of responding to the response. A Pasadena police officer was involved in an automobile collision with James West and Steven Belle while responding to an emergency dispatch. The officer had sped up to twice the speed limit but had not activated his emergency lights or siren. West was turning and the officer’s car collided with the car occupied by West and Belle. West and Belle brought suit. The City filed a plea to the jurisdiction, asserting governmental immunity because the officer was entitled to official immunity or emergency response immunity. The trial court denied the plea and the City took an interlocutory appeal. The Court of Appeals affirmed the decision of the trial court. The Court held that the City had not conclusively established that the officer was entitled to “good faith” (official) immunity because there was no evidence in the record to suggest that the officer had considered less dangerous methods of responding to the call and the plaintiffs have provided expert testimony that there were other, less dangerous methods. The Court held that the City had not conclusively established that the officer was entitled to emergency response immunity because there was a fact question regarding whether the officer was reckless. The testimony of the officer as to his own conduct conflicted with the plaintiffs’ expert who concluded that the conduct was reckless. Brazoria County v. Van Gelder, 2009 Tex. App. LEXIS 7579 (Tex. App. – Houston [14th Dist.] September 17, 2009, pet. filed) A bump in a road is not a special defect for which the Texas Tort Claims Act waives governmental immunity. Van Gelder was injured when the car she was riding in hit a bump on a road and went off the road. Van Gelder brought suit against the driver, whom she promptly settled with, and Brazoria County. Van Gelder alleged that the bump constituted a special defect or a premises defect for which governmental immunity was waived. Brazoria County filed a plea to the jurisdiction, which was denied by the trial court. The County appealed and the Court of Appeals reversed and rendered judgment for the County. The Court of Appeals held that a bump is a not a special defect as that term is used in the Texas Tort Claims Act. The Court also held that Van Gelder’s premises defect claim fails because her allegations relate to discretionary actions, for which the County retains governmental immunity. Hanna v. Impact Recovery Sys., 295 S.W.3d 380 (Tex. App. – Beaumont August 27, 2009, no pet.) A curb separating two lanes of traffic was not a special defect for which governmental immunity was waived. City of Plano v. Homoky, 294 S.W.3d 809 (Tex. App. – Dallas August 25, 2009, no pet.) The operation of a golf course by the municipality, including the operation of a clubhouse and restaurant on the golf course, is a governmental function and the municipality is entitled to governmental immunity except to the extent it is waived by the Legislature. Homoky brought suit against the City of Plano under a theory of premises liability for injuries she sustained when she tripped and fell in a City-owned golf course clubhouse. The City filed a plea to the jurisdiction, which was denied by the trial court. The City appealed and the Court of Appeals reversed and dismissed the case for lack of subject matter jurisdiction. Homoky argued that operation of the golf course, or at least of the clubhouse and restaurant, was a proprietary rather than governmental function and, consequently, the City was not entitled to governmental immunity. Homoky also argued that, even assuming the City is entitled to governmental immunity, the City failed to fulfill its duty to Homoky. The Court of Appeals held that operation of a golf course, including a clubhouse or restaurant on the golf course, is a governmental function for which the City generally has governmental immunity. As to the standard of care, the Court concluded that the Recreational Use Statute applies, despite Homoky’s claim that she was not “recreating” at the time of her injury.

WINTER 2010 NEWSLETTER SCHOOL LAW UPDATE

admin — Thu, 21 Jan 2010 03:07:08 +0000

by Francisco J. Valenzuela

Fifth Circuit

El Paso Independent School District v. Richard R, 2009 U.S. App. LEXIS 27638 (5th Cir. December 16, 2009) A plaintiff who was a prevailing party was not entitled to attorney’s fees under the Individuals with Disabilities Education Act (“IDEA”) because he refused to enter a settlement offer and the relief that he finally obtained was not more favorable than the proposed settlement offer. At the pre-hearing resolution meeting, EPISD offered to “(1) conduct a full evaluation of R.R. within sixty days of the parents’ consent to evaluate; (2) convene an ARDC meeting within thirty days from the completion of the evaluation; (3) continue to comply with the applicable federal and state laws regarding the provision of prior written notice and procedural safeguards to parents; and (4) pay attorney’s fees.” Later, EPISD sent a written settlement offer with these same terms and suggested an attorney’s fee award of $3,000. The court looked to whether the plaintiff was substantially justified in refusing EPISD’s settlement offer, and found that because the settlement offer would have been judicially enforceable, that he was not justified in protracting litigation unnecessarily. The court found that 20 U.S.C. § 1415(i)(3)(D)(i) prohibited the awarding of attorney’s fees for work done after the written settlement offer was provided. Also looking to the statutory language, the court held that IDEA prohibits the awarding of attorney’s fees for work done during the resolution meeting. Finally, in regards to claims for the fees for work done prior to the resolution meeting, the court found that those fees should not have been awarded because EPISD “wisely included the payment of reasonable attorney’s fees to R.R. as part of its settlement offer,” leaving no need for continued litigation. Morgan v. Plano Independent School District, 2009 U.S. App. LEXIS 26154 (5th Cir. December 1, 2009) A school district policy that permits distribution of materials by students (1) for 30 minutes before and after school, (2) at three annual parties, (3) during recess, and (4) during school hours, in a passive manner at designated tables, while prohibiting the distribution of such materials at other times, is facially constitutional. In reaching its holding, the Fifth Circuit used the standard laid out in United States v. O’Brien, 391 U.S. 367 (1968), for examining the policy at issue because Plano ISD’s policy was a content and viewpoint neutral regulation of student speech. The appropriate standard is the time, place, and manner test. “[A] regulation must be content and viewpoint neutral, and must be ‘narrowly tailored to serve a significant government interest, and…leave open ample alternative channels for communication of the information.’” The Fifth Circuit found that Plano ISD’s regulations, being applied in this case to elementary school students, served a significant government interest in the efficient running of schools, classrooms, and lunchrooms and in providing a focused learning environment, and that the elementary school students had ample alternative channels of communication available to them. While the central issues on the appeal involved the application of the O’Brien test to the provisions applicable to elementary school students, the Court specifically noted that it was not deciding whether the First Amendment applied in the elementary school context to such policies. AM v. Cash, 585 F.3d 214 (5th Cir. October 9, 2009) A high school can prohibit two students from bringing purses bearing the image of the confederate flag to school because school officials reasonably anticipated that the images would cause “substantial disruption of or material interference with school activities.” In this case, Burleson High School had a policy prohibiting students from displaying the confederate flag on campus. This policy had been established as a result of numerous instances of racial tension and hostility at the high school, some of which involved the use of the confederate flag. Under the U.S. Supreme Court’s decision in Tinker v. Des Moines Independent Community School District, 393 U.S. 503 (1969), school officials can “prohibit student speech and expression upon showing ‘facts which might reasonably have led school authorities to forecast [that the proscribed speech would cause] substantial disruption of or material interference with school activities.’” School officials must base their decisions on facts. The court held that the school officials in this case reasonably anticipated that displays of the confederate flag would cause “substantial disruption of or material interference with school activities,” as the undisputed evidence indicated that “elements of the BHS student body have continually manifested racial hostility and tension,” at times with the confederate flag. While school officials had a history of racial problems to draw on, the court noted that Tinker does not require such a history, but explained that school officials could meet their burden “by establishing that they had a reasonable expectation, grounded in fact, that the proscribed speech would probably result in disruption.” It should also be noted that the plaintiffs filed due process and equal protection claims. The plaintiffs’ due process claim consisted of an allegation that the school district’s policy was unconstitutionally vague. The court disagreed, however, noting that schools are allowed a degree of flexibility not permitted in a criminal code. The court found that the policy was not unduly vague in light of precedent and that, as in prior precedent, the plaintiffs here were warned and given a light sanction. In regards to their equal protection claim, the plaintiffs argued that other students with different dress code violations were not disciplined. Because the court found that the defendants’ policy did not infringe their fundamental rights and that plaintiffs never alleged that they were being treated differently based on some protected classification, the defendants’ policy only had to be rationally related a legitimate state interest. The court found that, based on the facts, the defendants’ policy clearly met that standard. Houston Independent School District v. VP, 582 F.3d 576 (5th Cir. September 9, 2009) Parents of a disabled child seeking reimbursement under the Individuals with Disabilities Education Act (“IDEA”) of monies expended in placing their child in a private school for one year, do not have to ask for funding at the beginning of the second school year. In September of 2004, VP’s parents enrolled their disabled child in a private school and sought reimbursement from Houston ISD for the costs associated with the private school. The Fifth Circuit affirmed the district court’s finding that Houston ISD was not providing VP with a free, appropriate education and, therefore, that VP’s move to the private school was justified. The court also had to decide, however, whether VP should be reimbursed for the costs of the private school for the 2005-2006 school year. The court examined U.S. Supreme Court precedent and federal regulations, both of which stand for the proposition that “the decision by the Texas Education Agency hearing officer on February 10, 2005, was an agreement between HISD and V.P.’s parents that the Parish School was the appropriate placement,” and that that agreement lasts until the end of the review of the administrative decision. The court found that federal regulations do not require that parents seek a court order establishing that the alternative placement was correct. The court also noted that VP placed Houston ISD on notice through its filing of a motion to introduce additional evidence that costs for 2005-2006 would be sought, that the magistrate’s statements and order gave VP a reason to believe that “appropriate expenses for the 2005-2006 school year would be reimbursed if the hearing officer’s decision was affirmed,” and that subsequent steps were taken consistent with this understanding. Richardson Independent School District v. Michael Z, 580 F.3d 286 (5th Cir. August 21, 2009) In order for a residential placement to be appropriate under [the Individuals with Disabilities Education Act “IDEA”], the placement must be 1) essential in order for the disabled child to receive a meaningful educational benefit, and 2) primarily oriented toward enabling the child to obtain an education.” In order for parents to be reimbursed for placing their disabled child in a private school, the parents must prove that (1) an individualized education program (“IEP”) “calling for placement in a public school was inappropriate under IDEA, and (2) the private placement was proper under the Act.” After concluding that the district court did not err in finding that the IEP was inappropriate, the court turned to whether the private placement was appropriate. The Fifth Circuit had not previously enunciated a test for determining “when, in the face of an inappropriate IEP, a private residential placement is proper under the Act.” The court set forth the following test: “[i]n order for a residential placement to be appropriate under IDEA, the placement must be 1) essential in order for the disabled child to receive a meaningful educational benefit, and 2) primarily oriented toward enabling the child to obtain an education.” Under the first part of the test, a court must find that the private placement was essential for the student to receive a meaningful benefit. Under the test’s second prong, the court noted that school districts are not required to pay for medical expenses, just educational benefits. The court remanded the case to the district court to determine whether the second prong of the test was met.

Texas Court of Appeals

Hollingsworth v. Hackler, 2009 Tex. App. LEXIS 9939 (Tex. App. – Fort Worth December 31, 2009, no pet. h.) A principal and assistant principal are entitled to qualified immunity for transferring a disabled student to an alternative education school based on misbehavior that an admission, review, and dismissal (“ARD”) committee found was not a manifestation of the student’s disability. In this case, a disabled child made an obscene gesture toward classmates who were making fun of him and was later accused of making physical threats to one or more students. An ARD committee met to determine if the student’s behavior was a manifestation of his ADD. The committee determined that the misbehavior was not a manifestation of the student’s ADD, and later that same day, the assistant principal informed the Hacklers that their son would be disciplined by a temporary transfer to an alternative school. The Hacklers sued asserting various claims, including a § 1983 claim premised on their belief that the discipline imposed on their son should have been referred to the ARD committee. In evaluating the § 1983 claim, the court noted that the Individuals with Disabilities Education Act (“IDEA”) provides that if an ARD committee determines that a student’s misbehavior is not a manifestation of his disability, then the student may be disciplined by school officials in the same manner as they would discipline any other student who is not disabled, including by placement in an interim alternative school. The Hacklers admitted that this was accurate and did not introduce any evidence that the disciplinary procedures for non-disabled students required parental involvement in the disciplinary decisions. Moreover, the court noted that IDEA does not authorize the ARD committee to determine what, if any, discipline is appropriate if the misbehavior is found not to be a manifestation of the student’s disability. Copperas Cove Independent School District v. Brown, 2009 Tex. App. LEXIS 9814 (Tex. App. – Waco December 30, 2009, no pet. h.) A school district’s immunity is waived as to a plaintiff’s claim of sexual harassment under Chapter 21 of the Texas Labor Code. Kessling v. Friendswood Independent School District, 2009 Tex. App. LEXIS 8412 (Tex. App. – Houston [14th Dist.] November 3, 2009, no pet.) Individuals can assert a Texas Public Information Act (“TPIA”) declaratory judgment claim, but an individual does not have the authority to file a private cause of action to require a school district to meet the dictates of the Texas Education Code to follow certain accounting practices and to prepare certain required reports. In Kessling, the plaintiff asserted numerous claims under the Texas Open Meetings Act, the TPIA, and the Education Code. In regards to the TPIA, the court considered whether the state was the sole entity that could file a declaratory judgment claim. After closely analyzing the TPIA’s text, the court determined that nothing in the TPIA barred individuals from asserting such a claim on an individual basis, in addition to allowing the state to assert such claims. After analyzing the Education Code, on the other hand, the court noted that nothing in the Code authorized private individuals to file a claim to compel a school district to follow accounting practices or generate required financial reports. For this reason, Kessling lacked standing to assert such a claim under the Education Code. In re: Donna Independent School District, 2009 Tex. App. LEXIS 7833 (Tex. App. – Corpus Christi--Edinburg October 6, 2009, no pet.) A person (“Cassiano”) requesting permission to take pre-suit depositions under Rule 202 of the Texas Rules of Civil Procedure for the purpose of determining if he has a claim for slander and tortious interference with a contract based on the comments of a concerned citizen at a Donna ISD Board meeting may be allowed to depose Donna ISD Board members. In this case, Donna ISD and the Board members at issue (collectively the “Relators”) argued that the court lacked jurisdiction over the possible suit because the Relators are entitled to governmental immunity from suit and that Cassiano had not exhausted his administrative remedies under the Education Code. The Relators assumed that Cassiano intended to sue the Relators in their official capacities. In deciding that the depositions may go forward, the court noted that it was not clear that Cassiano’s eventual claims would be against the Relators, and that Rule 202 did not require that the person proposed for deposition be a potential defendant. Moreover, the court noted that it was not clear that Cassiano would have to exhaust administrative remedies under the Education Code because that requirement only applies to claims alleging violations of school laws or district employment contracts. In this case, Cassiano’s possible claims consisted of slander and tortious interference with contract by a “concerned citizen”. Thomas v. Beaumont Heritage Society, 296 S.W.3d 350 (Tex. App. – Beaumont September 18, 2009, no pet.) The trial court had the authority to temporarily enjoin Beaumont ISD from using bonds funds to demolish a school pending a trial on the merits. In 2007, Beaumont ISD’s Board called for an election seeking a bond issue “for the purpose of acquiring, constructing, renovating, improving and equipping new and existing school buildings and school facilities in the District.” Prior to the bond election, school officials or their agents made representations that South Park Middle School would not be demolished, and the court found that there was a dispute in the record as to whether such statements were authorized, ratified, or approved by Beaumont ISD. In response to arguments by the school district and its superintendent that the temporary injunction was overly broad because it prevented the use of other funds to demolish the school, the court noted that there (1) was no evidence that the Board had voted to demolish the school, that (2) the superintendent admitted that such a vote had not taken place, and that (3) there had been no showing that Board approval would not be needed for such a demolition. For these reasons, the court held that the trial could enjoin the demolition of South Park Middle School.

WINTER 2010 NEWSLETTER Successes and victories

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Fanning Harper Martinson Brandt & Kutchin, P.C. is pleased to provide you with our Winter 2010 Newsletter. Below you will find information regarded successes and activities in which our attorneys have recently been involved. Please click on the hyperlinks to our website to find interesting updates for issues relating to School Law, Local Government Law, Civil Rights, Premises Liability, Commercial Trucking, Texas Supreme Court—Insurance, Products Liability, Takings and Zoning, and Employment Law. If you would like additional information regarding these updates, please contact the writers at 214-369-1300. To be removed from future e-mails from our firm, please respond to sgoode@fhmbk.com

SUCCESS AND VICTORIES

VICTORY BEFORE THE U.S. SUPREME COURT! FHMBK obtained a significant victory before the United States Supreme Court for a local police officer. This case involved the arrest of a man for the alleged sexual abuse of his daughter. After investigating the allegations of sexual abuse, our officer signed a probable cause affidavit and presented it to a magistrate. The magistrate reviewed the affidavit and signed an arrest warrant. The Plaintiff was arrested on charges of sexual assault but the charges were later dismissed by the District Attorney. Following the dismissal of the criminal charges, Plaintiff sued the officer for alleged violations of Plaintiff’s constitutional rights. We successfully asserted our officer’s entitlement to qualified immunity before the District Court and the Fifth Circuit Court of Appeals. Plaintiff filed a petition for writ of certiorari with the U.S. Supreme Court. After reviewing Plaintiff’s petition, the Supreme Court asked us to file a response. After reviewing our response, the United States Supreme Court agreed with us and denied Plaintiff’s petition. Quinn v. Roach et al, No. 09-252 (Jan 11, 2010). Thomas P. Brandt, John F. Roehm III and Joshua Skinner worked together to achieve this significant victory before the U.S. Supreme Court. VICTORY BEFORE THE COURT OF APPEALS! FHMBK obtained a significant appellate victory for the City of Keene, Texas before the Waco Court of Appeals in a case involving allegations of a breach of contract against a municipality. This case arises out of the City’s purchase of real property. The City entered into an agreement to purchase certain parcels of real property in exchange for free water and sewer service for a period of years. Pursuant to the terms of the agreement, the seller of the property had the right to assign the benefits of the contract to others. Despite this right to assignment, no assignment of rights was ever made. The Plaintiff sued the City seeking to enforce his alleged right to free water and sewer service. FHMBK argued that the city was immune from Plaintiff’s claim and the Waco Court of Appeals agreed. Berkman v. City of Keene, No. 10-08-00073-CV (Nov. 4, 2009). Thomas P. Brandt, Joshua Skinner, Frank Valenzuela and John Husted worked together to achieve this significant appellate victory. TRIAL VICTORIES! FHMBK successfully represented the City of Keene in a preliminary injunction trial involving an annexation dispute. The plaintiffs and intervenors alleged that the city had violated the procedural requirements of the Local Government Code in its efforts to annex certain areas. Plaintiff and intervenor asked the judge to enter into a preliminary injunction against the City. After a full preliminary injunction trial, the court agreed with our position and refused to grant an injunction against the City as to four areas proposed for annexation. The court agreed with our position that the plaintiffs and intervenors did not have standing to assert their claims and that only the State of Texas may assert such claims and may only do so in a quo warranto proceeding. This case was tried in the 18th Judicial District Court in Johnson County, Texas. Roberts v. City of Keene, et al, No. C200900707 (Dec. 2009). Frank Valenzuela and John Husted worked together to achieve this significant victory. FHMBK successfully represented a restaurant in a dispute arising out of the sale of contaminated food. At a bench trial in Denton County, we obtained a ruling from the court that required the manufacturer of the food to reimburse our client for all attorney’s fees and costs incurred in defending the case under Chapter 82 of the Texas Civil Practice and Remedies Code. This case was tried before a Denton County Court on December 29, 2009. Marc Fanning achieved this trial victory. FHMBK successfully represented an individual in a negligence case in which liability was stipulated and only damages were disputed. The suit arose from a two-car rear-ender accident in Dallas with minor damage to the car. The police weren’t called, and both cars were driven from the scene. However, the plaintiffs alleged injury to their necks and backs, for which chiropractic treatment began one week after the accident. The defendant stipulated to liability and denied that any of the plaintiffs were injured in the accident. The plaintiffs claimed $15,539 in medical expenses. The unanimous verdict from the jury was for $2,000.00 in medical expenses. This victory was otained in a county court at law in Dallas County by Rocky Little. PRE-TRIAL VICTORIES! FHMBK successfully represented a local city in a flooding case. This case arose out of the flooding of Plaintiff’s home as a result of a water main break in the alley. FHMBK won a motion for summary judgment based on governmental immunity. The lawsuit was filed in the 101st District Court of Dallas County. Thomas P. Brandt and John F. Roehm III worked together to achieve this victory. FHMBK successfully represented two former city council members of a local city against RICO and conspiracy claims. This case involves a dispute regarding the alleged breach of a multi-million dollar development agreement. After considering the strength of our arguments in our motions to dismiss, the Plaintiff agreed to drop its RICO and conspiracy claims against our clients, the two former city councilmembers. Thomas P. Brandt and John F. Roehm III worked together to achieve this victory. FHMBK obtained dismissal for its client, a halfway house, in a case involving allegations of deliberate indifference to a resident’s medical condition. Martinez v. GEO Group, Inc, No. 071-23082708 (Nov. 2009). This case was pending in the 17th District Court of Tarrant County. Thomas P. Brandt and Joshua Skinner worked together to achieve this victory. FHMBK successfully represented a national nonprofit organization and its president in a case involving allegations of breach of contract and fraud. The case was pending in the 14th District court in Dallas County. Armstrong International, Inc. v. Blacks in Government, et al. No. 08-2100. (Dec. 2009). Thomas P. Brandt and John F. Roehm III worked together to achieve this victory. FHMBK achieved a favorable outcome for an insurance client who referred a case to us after a $2.5 million default judgment had been entered. We discovered a defect in the judgment and filed a bill of review challenging it. In light of the strength of the arguments contained in the bill of review, the plaintiff agreed to resolve the matter for $100K, a reduction of $2.4 million! Barry Fanning obtained this favorable outcome. FHMBK obtained a favorable outcome for a local municipality in a premises liability case involving the death of a young child. Based on the strength of the arguments we raised, Plaintiffs agreed to drop their claims against our client in exchange for an agreement to install a new fence. Thomas P. Brandt and John F. Roehm III worked together to achieve this favorable result. FHMBK obtained a summary judgment for a large grocery store chain in a premises liability case. This case was pending in the 162nd Judicial District Court in Dallas County. Summary judgment was granted on January 5, 2010. Marc Fanning obtained this favorable result. FHMBK obtained a judgment in favor of an insurance company client in a coverage matter involving the duty to defend and indemnify under a commercial general liability policy. The court agreed with our position that the insurer owed no duty to defend or indemnify the insureds for the claims asserted in a pending property damage case. Don Martinson and Leslie Echols Pitts obtained this favorable result.

HONORS

Don Martinson, Thomas P. Brandt and Joshua Kutchin were named as Super Lawyers in 2009 by the publishers of Texas Monthly. Thomas P. Brandt was, once again, selected to serve on the planning committee of the State Bar’s annual seminar entitled “Suing and Defending Governmental Entities.” Mr. Brandt has served as a planning committee member for many years and served as the chair of the seminar in 2006. Thomas P. Brandt has been selected to speak on the topic of “Individual Immunity for Public Officials” at the State Bar’s annual conference entitled “Suing and Defending Governmental Entities.” Joshua Skinner has been invited to speak on June 11th at the State Bar Annual Meeting during a CLE presentation sponsored by the Individual Rights and Responsibilities Section of the State Bar. Joshua Skinner is scheduled to speak on July 14th at the 2010 Suing and Defending Governmental Entities Boot Camp sponsored by the Government Lawyer’s Section of the State Bar. Joshua Skinner has been asked to speak on May 28th at the 2010 Bill of Rights Course sponsored by the Individual Rights and Responsibilities Section of the State Bar. Rebecca Raper served as judge for the YMCA Youth and Government Mock Trial Competition at TCU. Francisco Valenzuela has been asked to serve on State Bar History and Preservation Committee.

ATTORNEYS RECOGNIZED AS OUTSTANDING BY RESPECTED PEER-REVIEW PUBLICATIONS

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September 17, 2009 Fanning Harper Martinson Brandt & Kutchin, P.C. is proud to announce that three of its attorneys have been selected for inclusion in 2009 Texas Super Lawyers. Don D. Martinson – Environmental Litigation Thomas P. Brandt – Civil Rights/First Amendment Joshua T. Kutchin – Personal Injury Defense: General Selection is based on statewide nomination process, review of resumes and peer evaluation by practice area. Only five percent of the lawyers in the state are named to the list.

SPRING 2010 NEWSLETTER EMPLOYMENT UPDATE

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by Francisco J. Valenzuela

Changes to the Fair Labor Standards Act – 29 U.S.C. § 207(r) As part of the recent health care legislation, the Fair Labor Standards Act (“FLSA”) was amended to include subsection (r). Subsection (r) requires employers to provide a “reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth each time such employee has need to express the milk.” Moreover, covered employers must also provide a place (not a bathroom) “that is shielded from view and free from intrusion from coworkers and the public” to express the milk. An employer is not required to pay an employee for such break time. Employers with fewer than 50 employees are not subject to subsection (r) “if such requirements would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.”

Supreme Court of the United States

Lewis v. City of Chicago, 2010 U.S. LEXIS 4165 (May 24, 2010) A plaintiff can assert a disparate impact claim under Title VII by filing a charge of discrimination within the appropriate time-period after an application, as opposed to adoption, of the challenged practice. In July 1995, Chicago administered a written examination to applicants seeking employment in the fire department. On January 26, 1996, Chicago announced that those who scored 89 or above on the exam (the “well qualified”) would proceed to the next phases of the application process. Those who scored below 65 were turned down. Those who scored between 65 and 88 (the “qualified”) were notified that they would probably not be selected to move on in the process, but that their names would be kept on file. In May 1996 and again in October 1996, Chicago selected groups of well qualified applicants to advance to the next stages of the application process, and conducted nine such rounds over the next six years. In the last round, the well qualified pool was exhausted, so some qualified applicants were awarded slots. On March 31, 1997, Crawford Smith, an African American applicant, filed a charge of discrimination, and later, five others filed charges, as well. On July 28, 1998, the EEOC issued right to sue letters, and two months later they filed suit alleging that Chicago’s practices of selecting only the well qualified (those who received 89 or above) for advancement caused a disparate impact on African Americans. Significantly, Chicago stipulated that the “89-point cutoff had a ‘severe disparate impact against African Americans’” but argued that the cutoff score was justified by business necessity. Writing for a unanimous Court, Justice Scalia noted that a plaintiff establishes a prima facie disparate impact claim “by showing that the employer ‘uses a particular employment practice that causes a disparate impact’ on one of the prohibited bases”; no showing of intentional discrimination is required. The Court found that the conduct of which the plaintiffs complained (i.e. exclusion of applicants scoring below 89) falls within the terms “employment practice”, so that when Chicago engaged in an advancement round that excluded applicants who scored 88 or below, it constituted an employment practice. For this reason, the plaintiffs could assert disparate impact claims concerning the advancement rounds. Hardt v. Reliance Standard Life Ins. Co., 2010 U.S. LEXIS 4164 (May 24, 2010) In an ERISA case, a court, in its discretion, may award fees and costs to either party if the fee claimant has achieved “‘some degree of success on the merits.’” In this case, the district court denied both parties’ motions for summary judgment but, in denying Hardt’s motion, it stated that it found “‘compelling evidence’” that Hardt was totally disabled and wrote that it was inclined to rule in Hardt’s favor. The court, however, gave Reliance an opportunity to “‘address the deficiencies in its approach’” to determine if Hardt was totally disabled. The court believed that Reliance failed to comply with ERISA guidelines, meaning that Hardt “did not get the kind of review to which she was entitled.” After conducting the review, Reliance found that Hardt was eligible for long term disability benefits and awarded her past-due benefits. Hardt moved for, and was awarded, attorney’s fees by the district court, but that award was reversed by the Fourth Circuit because there was no showing that Hardt was a “prevailing party”. The Supreme Court noted that, under ERISA, a court may award “a reasonable attorney’s fee and costs of action to either party,” and that there was no mention of the term “prevailing party” in the statute. Moreover, the Court noted that, in its Brief, Reliance conceded that the statute “‘does not expressly demand, like so many statutes, that a claimant be a ‘prevailing party.’’” For these reasons, the Court held that “a fee claimant need not be a ‘prevailing party’ to be eligible for an attorney’s fees award.” Additionally, the Court noted that Hardt persuaded the district court that the plan administrator did not comply with ERISA guidelines, that she did not get the kind of review to which she was entitled, that there was “compelling evidence” that Hardt is totally disabled, and that it was inclined to rule in Hardt’s favor. After Reliance conducted the review ordered by the court, it reversed its decision, consistent with the court’s appraisal. The Supreme Court found that those facts established that Hardt achieved “far more” than “‘trivial success on the merits’ or a ‘purely procedural victory,’” but instead “‘some success on the merits.’” Significantly, the Court cautioned, however, that it was not deciding whether a remand order (like the one the district court issued to Reliance), “without more, constitutes ‘some success on the merits’ sufficient to make a party eligible for attorney’s fees.” Conkright v. Frommert, 2010 U.S. LEXIS 3479 (April 21, 2010) A single, honest mistake by an ERISA plan administrator with discretionary authority to interpret a plan does not justify stripping him of the deference granted to him for subsequent related interpretations of the plan. In this case, the district court rejected a reasonable interpretation of an ERISA plan by the plan administrator “because the Court of Appeals had overturned a previous interpretation by the” plan administrator. The Supreme Court rejected that “one strike” rule as inconsistent with its decisions in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) and Metropolitan Life Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008). The Court stated that the Firestone deference preserves the balancing between ensuring “‘fair and prompt enforcement of rights under a plan and the encouragement of the creation of such plans’” and promotes efficiency, predictability, and uniformity in plan interpretation.

Fifth Circuit

Jackson v. Cal-Western Packaging Corp., 602 F.3d 374 (5th Cir. March 26, 2010) In cases where a defendant-employer terminates a plaintiff-employee based on the complaints of other employees and the employee brings a claim under the Age Discrimination in Employment Act (“ADEA”), the issue in considering whether the employer’s stated reason is merely a pretext for discrimination is not the truth of the allegation against the employee, but whether the employer “‘reasonably believed the employee’s allegation and acted on it in good faith.’” Moreover, an employer’s stray remarks are insufficient to defeat summary judgment. Jackson was accused of violating his employer’s sexual harassment policy. Internal and external investigations were conducted and the offensive behavior was corroborated by male and female employees. When Jackson was interviewed, he admitted to being vindictive and that he would try to “legally” get back at those asserting the allegations. In light of all of this, Cal-Western terminated Jackson. The Fifth Circuit affirmed the grant of summary judgment because it found that Jackson presented no evidence that suggested that Cal-Western’s decision to trust the results of the two investigations was unreasonable or in bad faith. Jackson also argued that a superior had stated that Jackson was an “old, gray-haired fart.” In its decision, the Fifth Circuit explained that comments qualify as evidence of discrimination if they are “‘(1) related to the protected class of persons of which the plaintiff is a member; (2) proximate in time to the complained-of adverse employment decision; (3) made by an individual with authority over the employment decision at issue; and (4) related to the employment decision at issue.’” Comments not meeting this criteria are considered stray remarks. In this case, the Fifth Circuit found that the remark, made no closer than one year prior to the termination, was not proximate in time, and that it seemed completely unrelated to Jackson’s termination. Sullivan v. Leor Energy LLC, 2010 U.S. App. LEXIS 5383 (5th Cir. March 15, 2010) A contract stated for a longer term that one year “is not taken out of the statute of frauds when there is a mere possibility of termination within one year due to contingent events set forth in the contract, including termination by a party.” In this case, among the claims plaintiff asserted, is a claim that the draft contract (which neither party signed) between him and Leor Energy reflects the essential term of their agreement. The draft stated that his employment would last for about two and a half years, prohibits him from competing with the company for one year, and provides that either party may terminate the agreement. Sullivan argued that because he could be terminated without cause, that the draft contract created an employment-at-will relationship of an indefinite term that was performable in one year, and thus not barred by the statute of frauds. The Fifth Circuit found that a contract is not taken out of the statute of frauds simply because a possibility exists of termination within one year “due to contingent events set forth in the contract, including termination by a party.” Moreover, the court noted that the Texas Supreme Court had recognized that the same reasoning is applicable “when a contract expressly grants either party the right to terminate at any time a contract with a stated term of more than one year.” The court held that because the alleged agreement was for a term of more than one year and Leor Energy “did not sign any document reflecting the parties’ agreement, enforcement is barred by the statute of frauds.” Moreover, Sullivan did not fall within the partial-performance exception to the statute of frauds simply because he received a salary, as “the services were fully explained by the salary without supposing any additional consideration.” Schexnayder v. Hartford Life & Accident Ins. Co., 2010 U.S. App. LEXIS 5385 (5th Cir. March 12, 2010) When reviewing the combination of factors a court must study to determine whether an ERISA plan administrator decision was an abuse of discretion, a court may give more weight to a conflict of interest where the circumstances surrounding the administrator’s decision suggest “procedural unreasonableness”. In this case, Hartford both administered and paid for the plan. The record before the court indicated that Hartford was presented with conflicting medical evidence concerning the extent of the plaintiff’s disability and his ability to work. Hartford credited the evidence from its physicians whose conclusions favored it. Although Hartford’s decision was based on substantial evidence, the Fifth Circuit held that it was required to consider other factors under Metropolitan Life Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008), like the conflict of interest and Hartford’s treatment of Schexnader’s Social Security Administration (“SSA”) award. Under Glenn, a conflict of interest is one factor to be taken into account, and the weight to be accorded to this factor depends on the surrounding circumstances of Hartford’s decision. The Fifth Circuit noted that a decision by Hartford to pay benefits would have affected its bottom-line, and Hartford failed to take precautions to avoid or minimize the conflict. Moreover, Hartford failed to address Schexnader’s contrary SSA award that found that he was totally disabled. The Fifth Circuit noted that failure to take such a contrary award into account can suggest procedural unreasonableness, and that it is a factor that can render the denial of benefits arbitrary and capricious. In fact, the Fifth Circuit held that Hartford’s failure to take the award into account made its decision procedurally unreasonable, justifying the district court in giving more weight to the conflict of interest as it suggested a financial bias. The Fifth Circuit found that “[a]lthough substantial evidence supported Hartford’s decision, the method by which it made the decision was unreasonable, and the conflict, because it is important under the circumstances, acts as the tiebreaker for us to conclude that Hartford abused its discretion.”

Supreme Court of Texas

In re: United Services Automobile Association, 2010 Tex. LEXIS 282 (Tex. March 26, 2010) Labor Code filing deadlines, against non-governmental entities, are mandatory but not jurisdictional. Additionally, the tolling statute, Tex. Civ. Prac. & Rem. Code § 16.064, applies to TCHRA claims. After the Texas Supreme Court dismissed James Brite’s case for want of jurisdiction because Brite filed suit in a county court that did not have jurisdiction over the amount in controversy, Brite filed suit in a Bexar County district court. USAA argued that the court lack jurisdiction because Brite did not bring his suit within the two year limitation for TCHRA claims and that the tolling provision in § 16.064 did not apply. In its decision, the Supreme Court noted that since Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76 (Tex. 2000), it has been reluctant to hold a provision to be jurisdictional, “‘absent clear legislative intent to that effect.’” The Court found that there was no clear legislative intent to find the Labor Code filing deadlines jurisdictional, as opposed to mandatory. Moreover, the Court noted that federal courts treat Title VII filing requirements as mandatory and not jurisdictional. In regards to whether § 16.064, a statute tolling the time when a claim may be re-filed in a proper court after dismissal from a court where the case was improperly filed, the Court found that “absent language indicating that section 16.064 was not intended to apply to TCHRA claims, the statute of limitations is tolled for those cases falling within section 16.064’s savings provision.” In this case, because Brite was not mistaken about which court to file in, but made a strategic decision to file in county court notwithstanding that the amount in controversy exceeded the jurisdictional amount, the limitations were not tolled. Galveston Indep. Sch. Dist. v. Jaco, 2010 Tex. LEXIS 125 (Tex. February 12, 2010) The elements of a claim under the Texas Whistleblower Act can be considered to determine jurisdiction and liability. In this case, Jaco, the Athletic Director, sued his employer-school district for allegedly demoting him for having reported a football player’s violations of UIL rules to UIL officials. The school district filed a plea to the jurisdiction asserting that Jaco’s claims were barred by governmental immunity and that the court lacked jurisdiction because Jaco failed to make a good faith report of a violation of law to an appropriate law enforcement authority. The trial court denied the plea, and its decision was affirmed by the court of appeals. The Supreme Court reversed based on its holding in State v. Lueck, 290 S.W.3d 876, 883 (Tex. 2009) which held that the elements of the Whistleblower Act are considered to determine both jurisdiction and liability.

Spring 2010 Newsletter Successes, Victories and Other News

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Fanning Harper Martinson Brandt & Kutchin, P.C. is pleased to provide you with our Spring 2010 Newsletter and Legal Update. Below you will find information regarding successes and activities of our attorneys. Please click on the hyperlinks to our website to find interesting updates for issues relating to School Law, Local Government Law, Civil Rights, Premises Liability, Commercial Trucking, Products Liability, Takings and Zoning, and Employment Law. Please call us with your questions or comments.

VICTORIES AND HONORS

VICTORY BEFORE THE TEXAS SUPREME COURT FHMBK attorneys Thomas P. Brandt, Joshua Skinner, Francisco Valenzuela, and John Husted successfully represented the City of Keene before the Texas Supreme Court in Case No. 09-1054, Bret “Doc” Berkman v. City of Keene. This case involved a dispute which arose out of an agreement to provide water and sewer services. This victory marks the third and final victory for our client after victories before the trial court and the Waco Court of Appeals. TRIAL VICTORIES FHMBK attorney Rocky Little successfully represented a convenience store in a premises liability cause of action involving an elderly customer who claimed that the burglar bars attached to a self-closing door tripped her as she exited. The elderly Plaintiff suffered multiple fractures of her upper arm and shoulder for which shoulder-replacement surgery was required. The Kaufman County jury rendered a unanimous verdict that the convenience store was not negligent and the court rendered a Take-Nothing Judgment in favor of the store. This case was tried in the 86th Judicial District Court in Kaufman County, Texas. FHMBK attorney Rocky Little successfully defended a driver in a suit for personal injuries arising from a nine-car accident. Two drivers were sued on a negligence cause of action. The minor Plaintiff, who was 19 months of age when the accident happened, was taken by ambulance to the emergency room where he was examined and released. His father, the other Plaintiff, was examined in the emergency room and received a multi-month course of chiropractic treatment. The jury unanimously determined that the accident was the result of a sudden emergency, and was not caused by the negligence of any of the drivers. A Take-Nothing Judgment was rendered against the Plaintiffs in favor of the Defendants. This case was tried in the 362nd Judicial District Court in Denton County, Texas. FHMBK attorneys Francisco Valenzuela and John Husted successfully represented the City of Keene and a large number of individual defendants in an annexation dispute. The plaintiff and intervenors alleged that the City and the individual defendants violated the procedural requirements of the Local Government Code in its efforts to annex certain areas and that they were trying to annex territory outside of the City’s extraterritorial jurisdiction. After a preliminary injunction trial, the court found that the plaintiff lacked standing to assert any of his claims and that the intervenors lacked standing to challenge the annexation procedures. This case was litigated before the 18th Judicial District Court in Johnson County, Texas. Roberts v. City of Keene, et al, No. C200900707 (Dec. 2009). PRE-TRIAL VICTORIES FHMBK attorneys Thomas P. Brandt and Joshua Skinner successfully represented a community college district in an employment discrimination and retaliation case in the United States District Court for the Northern District of Texas. The plaintiff alleged national origin and religious discrimination as well as retaliation in violation of Title VII and the Texas Commission on Human Rights Act. FHMBK filed a motion for summary judgment and the magistrate judge issued a report recommending that the case be dismissed. FHMBK attorneys Thomas P. Brandt and Joshua Skinner successfully represented a central Texas county and county commissioner. The plaintiff brought suit alleging that the county commissioner had defamed him and had instigated a criminal prosecution of the plaintiff, which the plaintiff prevailed on at his criminal trial. After FHMBK filed a motion to dismiss, the plaintiff agreed to non-suit his claims against the county and county commissioner.

HONORS

FHMBK is pleased to announce that Francisco Valenzuela has been named as a member of the firm. Since joining the firm as an associate in 2007, Mr. Valenzuela has distinguished himself in the areas of school litigation, employment litigation and municipal law. FHMBK is pleased to announce that Rebecca Raper, Joshua Skinner, Francisco Valenzuela and John Husted have recently been named as “Rising Stars” by Texas Monthly Magazine. Ms. Raper’s practice focuses on insurance coverage, appellate advocacy and school law. Mr. Skinner’s practice focuses on Constitutional law, local government law, school law and employment law. Mr. Valenzuela’s practice focuses on school litigation, employment litigation, municipal law and municipal litigation. Mr. Husted’s practice focuses on local government defense, employment litigation, school litigation and appellate advocacy. FHMBK is pleased to announce that Thomas P. Brandt was recently featured on the cover of Texas Lawyer in relation to his representation of two elementary school principals in the high-profile “candy cane” case. The article followed the oral argument before the Fifth Circuit which was held at SMU’s law school. The issues in the case dealt with freedom of speech, freedom of religion and qualified immunity. John Roehm served as a judge for the National Trial Competition, co-sponsored by the Texas Young Lawyers Association and the American College of Trial Lawyers on March 25. The top two law school teams from 14 regions across the country competed for the national championship. Francisco Valenzuela and John Husted served as judges at the Texas Undergraduate Moot Court Association tournament hosted by the University of Dallas in Irving, Texas. They judged oral arguments concerning constitutional law questions centering around the Fourth and Eighth Amendments to the Constitution of the United States. This marks the third time in the last three years that Mr. Valenzuela has been invited to judge a Texas Undergraduate Moot Court Association tournament. To find out more about these attorneys, or more about our firm, please visit our website at www.fhmbk.com If you want to be removed from our mailing list, contact Sara Goode at sgoode@fhmbk.com

Spring 2010 Newsletter School Law Update

admin — Thu, 01 Apr 2010 12:09:50 +0000

by John D. Husted

Fifth Circuit

US v. Texas, 601 F.3d 354 (5th Cir. 2010) For an alleged Equal Education Opportunities Act (EEOA) violation, the particular local school district(s) at issue must be made parties to the suit in order to determine the appropriate district court. LULAC and G.I. Forum brought suit against the State of Texas, the Texas Education Agency (TEA), and the Texas Commissioner of Education in the Eastern District court alleging that Mexican American students with limited-English proficiency (LEP students) were denied equal educational opportunities in Texas public schools, thereby violating the EEOA as well as a long-standing injunctive order relating to LEP students in Texas schools. The facts as alleged specifically pertained to only three school districts, none of which were in the Eastern District. The Court found that there was no statewide de jure segregation of Mexican Americans in Texas, and thus the lower court erred in finding that plaintiffs could establish a violation against the defendants. Based on a previous case under the long-running injunctive order, the Fifth Circuit noted that the alleged language issues necessarily vary by district, and that absent problems existing on a statewide basis, the claims should be aimed at the particular districts. The Fifth Circuit concluded that the plaintiffs’ EEOA claim could not properly be addressed in the absence of individual school districts as parties.

Texas Supreme Court

Presidio Independent School District v. Scott, 53 Tex. Sup. J. 648 (Tex. 2010) When a school district brings suit to review the Commissioner of Education’s decision to require the reinstatement of a teacher, the school district and the teacher, not the Commissioner, are the adverse parties for the purpose of determining venue. Presidio ISD issued a notice of termination to a teacher. This initiated the statutory administrative process. After a hearing, the examiner recommended termination, and the school board agreed and adopted the recommendation. The teacher filed a petition for review with the Commissioner. The Commissioner reversed the board’s decision, and determined that the teacher should be reinstated or paid a year’s salary in lieu of reinstatement. Presidio ISD appealed and chose the Travis County district court as its venue. The teacher concurred with the choice of venue. The Commissioner, however, objected to venue, contending that because he is a party to the appeal, his consent is required. The court of appeals agreed with the Commissioner on rehearing. The Texas Supreme Court determined that the Commissioner’s consent before an appeal of his decision is not required by the Education Code. The Commissioner is a “neutral arbiter” performing a limited review of the board’s decision and does not have a direct stake in the outcome, in the way that a “party” would. Galveston Independent School District v. Jaco, 303 S.W.3d 699 (Tex. 2010) Under the Texas Whistleblower Act, whether the reporting of a violation of the University Interscholastic League’s (UIL) rules to UIL officials is a good-faith report of a violation of law to an appropriate law-enforcement authority is a jurisdictional question. Jaco sued Galveston ISD under the Texas Whistleblower Act alleging that he was demoted from Director of Athletics and Extracurricular Activities for reporting a high school football player’s violations of the UIL’s eligibility rules to UIL officials. In its plea to the jurisdiction, Galveston ISD asserted that governmental immunity barred Jaco’s claims, because Jaco failed to make a good-faith report of a violation of law to an appropriate law-enforcement authority as required by the Whistleblower Act. The Court held that whether Jaco’s reporting of a violation of the UIL rules to the UIL was a good faith report of a violation of law to an appropriate law-enforcement authority is a jurisdictional question. The court reversed and remanded to the court of appeals to determine whether Jaco alleged a violation under the Whistleblower Act.

Texas Court of Appeals

McCandless v. Pasedena Independent School District, 2010 Tex. App. LEXIS 2383 (Tex. App. – Austin, April 2, 2010, no pet. h.) Neither the Education Code nor the Local Government Code’s limited waiver of immunity based on contracts waives governmental immunity for the District or the Commissioner of Education where a principal’s decision to not recommend an intern for teacher certification pursuant to an alternative teacher-certification course was appealed to the Commissioner. McCandless was enrolled in an alternative teacher-certification course, which included as part of its process, an internship with the District. Pursuant to the certification process, the principal completed an evaluation form, on which she declined to recommend McCandless for certification and instead recommended that she repeat the internship. McCandless filed a grievance, arguing that the principal acted arbitrarily or capriciously, and the action was an abuse of discretion. McCandless filed grievances requesting that the principal recommend her, but they were denied on the basis that the original grievance was untimely filed. McCandless appealed to the Commissioner of Education. The Commissioner noted that McCandless was improperly denied a hearing to determine the timeliness of her grievance; however, the Commissioner found that he had no statutory jurisdiction to hear the administrative appeal. McCandless asserted that the principal’s failure to recommend her violated the “purposes” section of the Teach for Texas Pilot Program Relating to Alternative certification;” however, that provision imposes no duties on the principal or anyone else in the District, nor did it confer any rights on McCandless. Her breach claim based on her employment contract also failed to establish jurisdiction, because the contract did not require a recommendation for certification. Texas School for the Blind and Visually Impaired v. Dugosh, 2010 Tex. App. LEXIS 2207 (Tex. App. – Austin, March 26, 2010, no pet. h.) In a death caused by a student’s choking, Tex. Civ. Prac. Rem. Code §101.021 did not waive governmental immunity for personal injury or death caused by a condition or use of tangible personal property, where, though school personnel prepared, served, and even helped the student get the large food pieces on his spoon, it was the student that put it to its intended use, and where the food did not completely lack an integral safety component. Christopher, a student with profound developmental defects, choked to death on chunks of poorly chewed food soon after a meal at the school. His physician had previously advised the school that Christopher was at risk of choking. School personnel cooked, cut and prepared the food. School personnel even helped Christopher get the food onto his spoon. Christopher’s parents sued the school on the basis that the school personnel’s negligence or gross negligence proximately causing Christopher’s death. In its plea to the jurisdiction, the school argued that the parents failed to allege facts that would demonstrate a negligent “condition or use” of tangible personal property that proximately caused Christopher’s death, so as to waive immunity under Tex. Civ. Prac. Rem. Code §101.021. The court held that immunity was not waived. Though school personnel prepared, served, and even helped the student get the large food pieces on his spoon, it remained the student, not the school, that ultimately put the food to its intended use by eating it. Also, there was not a complete absence of an integral safety component to the food’s condition, as the food was cut into smaller pieces.

Spring 2010 Newsletter Local Government Law Update

admin — Thu, 01 Apr 2010 12:08:08 +0000

by Joshua Skinner

Texas Supreme Court

Klein v. Hernandez, 2010 Tex. LEXIS 352, 53 Tex. Sup. J. 693 (May 7, 2010) (publication status pending) A resident physician working at a public hospital as part of a an agreement with his private medical school, is a governmental employee for purposes of Texas Civil Practice and Remedies Code § 51.014(a)(5) and, consequently, is entitled to an interlocutory appeal from a denial of his assertion of immunity. Klein was a Baylor Medical School obstetrics and gynecological resident physician at Ben Taub General Hospital when he delivered Hernandez’s daughter. Hernandez brought suit against Klein and Baylor alleging malpractice, but non-suited Baylor during the pendency of the appeal. Klein filed a motion for summary judgment, asserting immunity from Hernandez’s claims against him. His motion was denied and the court of appeals dismissed Klein’s appeal for want of jurisdiction, holding that Klein was not entitled to an interlocutory appeal under Texas Civil Practice and Remedies Code § 51.014(a)(5) because he was not an employee of Ben Taub General Hospital. The Supreme Court held that Klein was a government employee for purposes of Texas Civil Practice and Remedies Code § 51.014(a)(5) because he was working at Ben Taub General Hospital, a county hospital, pursuant to an agreement between Ben Taub and Baylor Medical School. The Court reversed and remanded for consideration of the merits of Klein’s assertion of immunity. City of Dallas v. Abbott, 304 S.W.3d 380 (Tex. February 19, 2010) The timeliness of a request for an attorney general opinion under the Public Information Act is measured from the date a party seeking public information responds to a governmental body’s good-faith request for clarification or narrowing of an unclear or overbroad information request. The City of Dallas received a Public Information Act request. The City sent a letter to the requestor seeking clarification or narrowing of the request pursuant to Texas Government Code § 552.222(b). The requestor subsequently submitted his response and the City requested an attorney general opinion within ten (10) days of the amended request. The attorney general ruled that the City’s request for an opinion was untimely because it was not done within ten days of the original request. The attorney general concluded that the City’s request for clarification or narrowing merely served to toll the deadline, not reset it. The City brought suit seeking a declaratory judgment that it could withhold the documents in question. The trial court rejected the City’s argument and the court of appeals affirmed. The Supreme Court reversed, holding that when a governmental entity, acting in good faith, requests clarification or narrowing of an unclear or overbroad request for public information, the ten-day period to request an attorney general opinion is measured from the date the request is clarified or narrowed.

Texas Courts of Appeals

Maxwell v. Willis, 2010 Tex. App. LEXIS 3412 (Tex. App. – Eastland May 6, 2010, no pet. h.) In determining whether a public official acted in good faith for purposes of official immunity, the court should use an objective standard, asking whether a reasonably prudent official, under the same or similar circumstances, could have believed that his conduct was justified based on the information he possessed when the conduct occurred. Willis was a student in the Texas Tech University Physician’s Assistant Program. Maxwell is the program director. After allegations surfaced that Willis had threatened another student with a firearm, Maxwell suspended Willis and had him removed from campus. The allegations were investigated and Willis was eventually dismissed from the program. Willis brought various claims, including a defamation claim against Maxwell because Maxwell had informed other students that Willis was dangerous. Maxwell contended that he was entitled to official immunity from Willis’ defamation claim. The Court of Appeals held that Maxwell is entitled to official immunity from Willis’ defamation claim because a reasonable public official, possessing the same information possessed by Maxwell, could have made the same decision to inform other students that Willis was dangerous. Maxwell had conflicting evidence regarding the danger posed by Willis, but it was within Maxwell’s responsibilities to oversee the safety of the other students in the program. The Court concluded that it did not matter whether Maxwell was motivated by some other interest (disagreement with Willis on an unrelated matter) because the official immunity test is an objective standard rather than a subjective standard based on the actual motivation of the individual public official. Zellers v. Cortez, 2010 Tex. App. LEXIS 3398 (Tex. App. – Corpus Christi, May 6, 2010, no pet. h.) A plaintiff’s claims against a public official were construed as being made against the public official in his official capacity only because they involved events that occurred while the defendant was acting as a public official. Cortez, mayor of the City of McAllen, made various derogatory remarks about Zellers during a radio broadcast in which Cortez was there as mayor. Cortez also authorized advertisements that contained derogatory remarks about Zellers. Zellers brought suit against Cortez alleging intentional torts, but failing to specify whether his claims were brought against Cortez in his official or individual capacity. The trial court held that the claims were brought against Cortez in his official capacity and dismissed based on governmental immunity. The Court of Appeals affirmed, holding that because Zellers failed to specify whether his claims were brought against Cortez in his official or individual capacity, they would be construed as brought against Cortez exclusively in his official capacity in light of the fact that they involved actions by Cortez as mayor of the City of McAllen. McCollum v. Tex. Dep’t of Licensing & Regulation, 2010 Tex. App. LEXIS 2958 (Tex. App. – Houston [1st Dist.] April 22, 2010, no pet. h.) A plaintiff may bring an employment discrimination suit against an employer if it is filed within sixty (60) days after the date the plaintiff receives notice from the Texas Workforce Commission of his or her right to sue. This timeliness provision, found in Texas Labor Code § 21.254, is not a jurisdictional prerequisite to a suit against a governmental entity. McCollum brought suit against the Texas Department of Licensing and Regulation alleging employment discrimination. While McCollum filed her lawsuit within the sixty (60) days after receiving a right to sue letter from the Texas Workforce Commission, the Department was not served until after the sixty (60) days had elapsed. The Department filed a plea to the jurisdiction, asserting that the sixty day deadline found in Texas Labor Code § 21.254 is a jurisdictional prerequisite to suit against a governmental entity under Texas Government Code § 311.034. The trial court granted the plea and McCollum appealed. The court of appeals held that Texas Labor Code § 21.254 is not a jurisdictional prerequisite to suit. The court also held that Section 21.254 does not fall within the scope of Texas Government Code § 311.034 and, consequently, is not a jurisdictional prerequisite to suit against a governmental entity. Since compliance with Section 21.254 was not a jurisdictional prerequisite, the trial court erred in granting the Department’s plea to the jurisdiction. The trial court’s decision was reversed and the case was remanded for further proceedings. Rodriguez-Escobar v. Goss, 2010 Tex. App. LEXIS 2770 (Tex. App. – Corpus Christi April 15, 2010, no pet. h.) A doctor working as a governmental employee is entitled to assert official immunity as to the exercise of “governmental discretion,” but not “medical discretion.” Beverly Goss committed suicide while under the treatment of Dr. Escobar, a psychiatrist at Rio Grande State Center. Her estate brought suit against Dr. Escobar alleging medical malpractice. Dr. Escobar asserted official immunity, but the trial court refused to present a question to the jury regarding official immunity. The jury returned a verdict for Ms. Goss’s estate and Dr. Escobar appealed. The court of appeals held that physicians working as government employees are entitled to assert official immunity under some circumstances, but not as to all of the decisions they make. The court held that “governmental discretion” must be distinguished from “medical discretion.” A government-employed doctor or nurse has official immunity from claims arising out of the exercise of governmental discretion, but no immunity from liability from the exercise of medical discretion. In some cases, medical personnel may have duties and responsibilities that overlap with private-sector providers. In such cases, if governmental factors and concerns colored the doctor’s or nurse’s discretion, then public policy may require official immunity. The court of appeals affirmed the decision of the trial court. Jones v. Tex. Dep’t of Criminal Justice, 2010 Tex. App. LEXIS 2716 (Tex. App. – Waco April 14, 2010, no pet. h.) Dismissal of public official defendants based on a motion filed by the governmental entity pursuant to Texas Civil Practice and Remedies Code § 101.106(e) is not subject to an interlocutory appeal by the plaintiff. Jones brought suit against the Texas Department of Criminal Justice and various state officials connected with the Department. The Department filed a motion to dismiss the state officials pursuant to Texas Civil Practice and Remedies Code § 101.106(e) because Jones brought tort claims against both the individual officials and the Department. The trial court granted the motion and Jones appealed. The court of appeals dismissed Jones’ appeal on the Section 101.106(e) issue because it was an interlocutory appeal. The court held that while public officials may be entitled to an interlocutory appeal from denial of a Section 101.106(e) motion to dismiss, a plaintiff is not entitled to an interlocutory appeal from the grant of such a motion. Dallas Area Rapid Transit v. Carr, 2010 Tex. App. LEXIS 2744 (Tex. App. – Dallas April 6, 2010, no pet. h.) An employee cannot establish a Whistleblower Act retaliation claim based on complaints that police officers working for the same employer failed to arrest a suspect. If, how, and when to arrest a suspect is within a police officer’s discretion and failure to do so does not constitute a violation of law for purposes of the Whistleblower Act. Carr was employed by Dallas Area Rapid Transit (DART) as a bus operator. A patron approached her bus, spoke to her in an aggressive tone, used a racial epithet, and pulled a knife on her. Carr called dispatch. A DART police officer caught the man but, instead of arresting him, the officer issued the man a citation for disorderly conduct. After learning that the man only received a citation, Carr appeared at a DART board meeting to complain. Subsequently, Carr was involved in another altercation with a patron, which led to the patron filing a complaint against Carr. The complaint was investigated and Carr was terminated. Carr brought suit alleging retaliation in violation of the Whistleblower Act. DART filed a plea to the jurisdiction, which the trial court denied. On appeal, the court of appeals reversed the decision of the trial court and rendered judgment for DART, holding that complaints about a police officer’s failure to arrest a subject do not constitute complaints of illegal conduct for purposes of the Whistleblower Act. City of Dallas v. Hillis, 2010 Tex. App. LEXIS 2854 (Tex. App. – Dallas March 30, 2010, no pet. h.) Use of a police vehicle in a high speed chase of a suspect is not “operation or use of a motor-driven vehicle” under the Texas Tort Claims Act as to injuries sustained by a suspect who sustained fatal injuries after he lost control of the vehicle he was driving and crashed. A City of Dallas police officer attempted to initiate a routine traffic stop of Hillis, who was operating a motorcycle. When Hillis did not stop, the officer pursued in his police car at speeds exceeding 110 miles per hour. Hillis entered the ramp of an overpass, but lost control of his motorcycle, causing him and his passenger to fall off the overpass and sustain fatal injuries. Hillis’ estate brought suit against the City alleging various forms of negligence. The City filed a plea to the jurisdiction, asserting that it has governmental immunity from Hillis’ claims. Hillis responded, arguing that his claim fell within the limited waiver of governmental immunity in the Texas Tort Claims Act. Specifically, under Section 101.021(1)(A), governmental immunity is waived if several elements are met, one of which is that the injury or death sued upon must “arise[] from the operation or use of a motor-driven vehicle or motor-driven equipment.” The trial court granted in part and denied in part the City’s plea to the jurisdiction and both parties appealed. The court of appeals affirmed in part and reversed in part, holding that Hillis’ claim did not fall within the “motor-driven vehicle” exception and the City retained its governmental immunity. Hillis’ flight and reckless driving was an intervening cause between the officer’s use of a motor-driven vehicle and the accident.

Spring 2010 Newsletter CIVIL RIGHTS LAW UPDATE

admin — Thu, 01 Apr 2010 12:07:50 +0000

by John F. Roehm III

United States Supreme Court

Smith v. Spisak, 558 U.S. __ (January 12, 2010) The inadequacy of a closing argument can violate a person’s Sixth Amendment rights if a reasonable probability exists that adequate representation would have led to a different result. Spisak was convicted of three murders and two attempted murders and sentenced to death. Spisak appealed his conviction alleging that his counsel’s closing argument at the penalty phase of the preceding was so inadequate that it violated his Sixth Amendment right to effective assistance of counsel. The U.S. Supreme Court held that to prevail on an ineffective counsel claim, one must show that counsel’s representation fell below an objective standard of reasonableness and that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different. The U.S. Supreme Court found no reasonable probability that a better closing argument without the defects alleged would have made a significant difference and thus, there was no Sixth Amendment violation. Presley v. Georgia, 558 U.S. __ (January 19, 2010) The Sixth Amendments right to a public trial in criminal cases extends to the jury selection phase of trial and in particular, the voir dire of prospective jurors. Presley was convicted of a cocaine trafficking offense. Presley appealed his conviction alleging that his Sixth and Fourteenth Amendment rights to a public trial were violated when the trial court excluded the public [his uncle] from the voir dire of prospective jurors. The U.S. Supreme Court held that trial courts are required to consider all reasonable alternatives to closing the proceeding. Courts are obligated to take every reasonable measure to accommodate public attendance at criminal trials. While a court may find reasons exist to override a Defendant’s constitutional rights to a public trial and exclude the public from jury selection, the court must articulate the particular interest to be protected and the threat to that interest. The trial court did not do so in this case and thus, it was an error to close the voir dire proceedings to the public. Citizens United v. Federal Election Commission, 558 U.S. __ (January 21, 2010) First Amendment protections extend to corporations. Restrictions on campaign financing amounts to an unconstitutional restraint on free speech. Citizens United, a non-profit corporation, released a documentary critical of Senator Hillary Clinton. Citizens United was planning on making a documentary available on cable TV through video on demand and produced television ads to run on broadcast and cable TV promoting the video on demand offering. Section 203 of the Bipartisan Campaign Reform Act of 2002 prohibits corporations and unions from using their general treasury funds to make independent expenditures for speech that is an “electioneering communication” or for speech that expressly advocates the election or defeat of a candidate. Citizens United sought declaratory and injunctive relief arguing the statute is unconstitutional. The district court denied a motion for preliminary injunction and granted the Federal Election Commission’s motion for summary judgment. Citizens United appealed and asserted a First Amendment free speech claim. The U.S. Supreme Court overruled its holding in Austin v. Michigan Chambers of Commerce which held that political speech may be banned based on the speaker’s corporate identity. The Supreme Court held that the campaign finance laws violated the constitutional free speech rights of corporations. Corporations can freely spend to support or oppose candidates for President and Congress. The government may regulate corporate political speech through disclaimer and disclosure requirements but it may not suppress that speech all together. Wilkens v. Gaddy, 558 U.S. __ (February 22, 2010) A “significant injury” is not necessary to state an excessive force claim under the Eighth Amendment. Wilkens, a prisoner, filed suit pursuant to §1983 claiming he was viciously and maliciously assaulted by Gaddy and sustained injuries as a result of the excessive force. The district court dismissed Wilkens’ excessive force claim under the Eighth Amendment for failure to state a claim on the grounds the injuries were “de minimis” and Wilkens must establish that he received more than a de minimis injury in order to prevail. The U.S. Supreme Court in Hudson v. McMillian held that “the use of excessive physical force against a prisoner may constitute cruel and unusual punishment [even] when the inmate does not suffer serious injury.” Excessive force claims are to be decided based on the nature of the force rather than the extent of injury. The “core judicial inquiry” is not whether a certain quantum of injury was sustained, but rather “whether force was applied in a good-faith effort to maintain or restore discipline, or maliciously and sadistically to cause harm”. The U.S. Supreme Court found that the lower courts erred in dismissing the complaint based on the supposedly de minimis nature of his injuries. Florida v. Powell, 559 U.S. ___ (February 23, 2010) The sufficiency of a Miranda warning is not based on the specific words used but rather whether the warning reasonably conveys to a suspect his rights as required by Miranda. Powell was arrested in connection with a robbery investigation and during questioning, admitted he owned the handgun found in a police search. As a result, Powell was charged and convicted for possession of a weapon by a convicted felon. Powell appealed alleging that his inculpatory statement should have been suppressed because the Miranda warning he received did not adequately convey his right to the presence of an attorney during questioning. Prior to the questioning, Powell was told that he had a right to talk to a lawyer before answering any of the questions and he had the right to invoke any of these rights at any time he wanted during the interview. The U.S. Supreme Court in Miranda v. Arizona held that an individual must be clearly informed prior to custodial questioning that he has, among other rights, the right to consult with a lawyer and to have the lawyer with him during interrogation. The test is not whether specific words are used in the Miranda warnings but rather whether the warnings reasonably conveyed to a suspect his rights as required by Miranda. The U.S. Supreme Court held that the warnings given to Powell reasonably conveyed the right to have an attorney present, not only at the outset of the interrogation, but at all times and thus, there was no Miranda violation. Maryland v. Shatzer, 559 U.S. ___ (February 24, 2010) A break between custodial interrogations obviate the Edwards protections – i.e. the presumption that any testimony after a Miranda warning is involuntary. In 2003, a police detective attempted to question Shatzer about allegations that he had sexually abused his son. Shatzer was read his Miranda rights and invoked his rights. The interview was ended and Shatzer was released back to the general prison population. Two and a half years later, Shatzer was confronted and questioned again about allegations that he had sexually abused his son. Shatzer waived his Miranda rights, made an inculpatory statement and was charged and found guilty of sexual child abuse. Shatzer moved to suppress his statement pursuant to Edwards. The motion was dismissed and Shatzer was found guilty. The Court of Appeals reversed holding that the passage of time alone is insufficient to end the protection afforded by Edwards. The U.S. Supreme Court in Edwards created a presumption that once a suspect invokes the Miranda right to the presence of counsel, any waiver of that right in response to a subsequent police attempt at custodial interrogation is involuntary. The U.S. Supreme Court held that where a suspect has been released from custody and returned to his normal life for some time before the later attempted interrogation, there is little reason to think that his change of heart has been coerced. The U.S. Supreme Court found that the appropriate period is fourteen (14) days which provided ample time for the suspect to get re-acclimated to his normal life, consult with friends and counsel and shake off any residual coercive effects of prior custody. Shatzer’s release back into the general prison population constituted a break in Miranda custody and thus, his subsequent custody interrogation was voluntary. Berghuis v. State, 559 U.S. ___ (March 30, 2010) In a fair-cross section claim under the Sixth Amendment, the petitioner must show that underrepresentation is due to systematic exclusion. Smith, an African American, objected to a panel’s racial composition in a circuit court proceeding. The venire panel consisted of 60-100 people with only 3 being African American. Smith was convicted by an all white jury and filed a fair-cross section claim against the State of Michigan asserting that the county’s assigned prospective jury procedure to first send jurors to the local district courts and those remaining to the circuit courts resulted in underrepresentation of African Americans at the circuit court level and a violation of his right to an impartial, fair trial of his peers under the Sixth Amendment. The U.S Supreme Court held that criminal defendants have a Sixth Amendment right to trial by an impartial jury drawn from a fair-cross section of the community. To establish a fair-cross section claim, a petitioner must show that: 1) the group alleged to be excluded is a distinctive group in the community; 2) the representation of this group in venires from which juries are selected is not fair and reasonable in relation to the number of such persons in the community; and 3) this underrepresentation is due to systematic exclusion of the group in the jury-selection process. The U.S. Supreme Court held that Smith did not present any evidence that the jury assignment procedure caused underrepresentation or that the underrepresentation of African Americans was due to systematic exclusion and thus, there was no Sixth Amendment violation. Padilla v. Kentucky, 559 U.S. __ (March 31, 2010) The failure of counsel to inform a client that his plea and conviction for drug distribution would subject him to deportation constitutes ineffective assistance of counsel in violation of the Sixth Amendment. Padilla, a native of Honduras and lawful permanent resident of the U.S. for more than 40 years, after consulting with his attorney, plead guilty to drug distribution charges. As a result of the conviction, Padilla faced deportation. In his post conviction proceeding, Padilla alleges that his Sixth Amendment guarantee of effective counsel was violated in that his counsel not only failed to advise him of deportation consequences by pleading guilty, but also told him that he did not have to worry about immigration status since he had been in the country so long. The U.S. Supreme Court in Strickland v. Washington held that a defendant is entitled to effective assistance of a competent counsel. Courts will conduct a two prong inquiry to determine the effectiveness of counsel. First, does counsel’s representation fall below an objective standard of reasonableness and second, is there a reasonable probability that, but for counsel’s unprofessional errors, the results of the proceeding would have been different. The U.S. Supreme Court held that a constitutionally competent counsel would have advised Padilla that his conviction for drug distribution made him subject to automatic deportation and thus, Padilla’s Sixth Amendment right was violated.

Fifth Circuit Court of Appeals

Sanders-Burns v. City of Plano, 594 F.3d 366 (5th Cir. January 11, 2010) Sanders-Burns filed suit under §1983 against City of Plano and Officer Cabezuela for the death of her son. Sanders-Burns alleged claims against the city for failure to train and deliberate indifference to her son’s medical needs and alleged claims against the officer for excessive force and deliberate indifference to her son’s medical needs. The court held that claims of inadequate training generally require that the plaintiff demonstrate a pattern of conduct. Sanders-Burns failed to allege a pattern of conduct or another death similar to the one suffered by her son and failed to show that in light of the duties assigned to specific officers or employees, the need for more training is obvious and the inadequacy so likely to result in violations of constitutional rights that the policymakers of the city can reasonably be said to have been deliberately indifferent to the need. Service Employers International Union, Local 5 v. City of Houston, 595 F.3d 588 (5th Cir. January 28, 2010) Service Employers sued the City of Houston under §1983, alleging the city’s denial of Service Employers’ request for permits to conduct parades, marches and rallies violated the First Amendment. The City denied several of the requests pursuant to its sound ordinance, parade ordinance and parks ordinance. The court held that protecting the public from excessive noise is a significant government interest and that the sound ordinance was narrowly tailored in satisfying that interest. The sound ordinance makes reasonable distinctions among categories in the level of disruption caused by noise that requires a permit and noise that comes from exempted sources. The court held that the limit of two permits per location per three days in the sound ordinance is not reasonably tailored and is unconstitutional because the city did not differentiate among the needs and occupants of different parts of the city and base frequency and time on such distinctions. The court held that the parade ordinance provides a discernable and objective standard which is not content-based and treats parades the same regardless of content or subject of the message. The court held that the provision in the parade ordinance limiting parades to two one hour windows is not narrowly tailored and thus, is invalid. Finally, the court held that portions of the parks ordinance are constitutionally vague in its failure to designate what areas of its parks required permits for a “public gathering” and in it failure to define “public gathering”. Dillon v. Rogers, 596 F.3d 260 (5th Cir. February 4, 2010) Dillon filed a §1983 suit against Rogers alleging violations of his civil rights during his incarceration. A motion to dismiss for failure to exhaust administrative remedies was filed and granted by the district court. The court held that judges may resolve factual disputes concerning exhaustion without the participation of a jury. However, the court was unable to determine whether administrative remedies were available to Dillon because the record was not sufficiently developed when the district court granted summary judgment. The court remanded the case to allow Dillon to conduct discovery concerning exhaustion and availability of administrative remedies. Kleinman v. City of San Marcos, 597 F.3d 323 (5th Cir. February 11, 2010) Kleinman sued the City of San Marcos alleging that his wrecked motor vehicle was an expressive artwork and display and the city’s junk vehicle ordinance which required its removal or concealment from public view, violated the First Amendment and the Visual Artists Right Act. The court held that under O’Brien, when “speech” and “non-speech” elements are united in a course of conduct, a valid governmental interest in regulating the non-speech element can justify incidental limitations on First Amendment freedoms. The junk-vehicle ordinance passes muster under the O’Brien test. The car-planter is a utilitarian device, an advertisement and ultimately a “junk vehicle”. These qualities objectively dominate any expressive component of the exterior painting. When the “expressive” component of an object, considered objectively, in light of its function and utility, is at best secondary, the public display of the object is conduct subject to reasonable state regulation. The court held that the regulation of junk vehicles is within the City’s traditional municipal powers; important governmental interests justify the ordinance–i.e. protect community’s health and safety from problems created by abandoned vehicles left in public use; the ordinance is not intended to regulate “speech” at all but is a content-neutral health and safety ordinance; and the ordinance is reasonably tailored to achieve the City’s legitimate interests with only incidental restrictions on protected speech, Bryant v. Military Department of the State of Mississippi, 597 F.3d 678 (5th Cir. February 17, 2010) Bryant sued the Mississippi Air National Guard and individual officers on various claims, including §1983. The district court dismissed Bryant’s claims on the grounds he could not succeed on any §1983 First Amendment claim because he failed to show that the individuals acted “under color of state law”. The court held that a person acts “under color of state law” if he engages in a misuse of power, possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law. A state officer does not act “under color of state law” if he pursues personal objectives without using or misusing the power granted to him by the state to achieve the personal aims. The court held that the officers were acting pursuant to personal objectives and not under the color of state law and thus, no valid §1983 claim existed in this circumstance. Fairchild v. Liberty Independent School District, 597 F.3d 747 (5th Cir. February 22, 2010) Fairchild sued the school district and several of its officials alleging that district rule barring attendees at the district’s board meeting from discussing or naming students or district employees during the public comment session of the meeting and the district’s policy that grievance sessions before the board are closed to the public unless the effected employee requested the session be open infringed on her First Amendment rights. The court held that school board meetings and comment sessions are limited public forums for the limited time and topic of the meeting. A government may restrict speech in these limited public forums as long as the regulation does not discriminate against speech on the basis of viewpoint and it is reasonable in light of the purpose served by the forum. The court held that the board’s policies excluding from public discourse certain topics of speech, including individualized personnel matters and channeling such complaints into private sessions to protect privacy rights was viewpoint neutral and reasonable and was not an unconstitutional infringement on free speech. The court held that Fairchild’s First Amendment rights were not infringed when her grievance hearing was closed to the public because she was going to argue at the hearing for the discharge of another school district employee. Bustos v. Martini Club Inc., 599 F.3d 458 (5th Cir. March 5, 2010) Bustos alleges he was assaulted by off duty officers while at a public club. Bustos sued several officers, the city, the city manager, the police chief and the club under Texas state law and §1983. The court held that Bustos did not allege facts to suggest that the officers who assaulted him misused or abused their official power and thus, failed to allege that the officer’s actions were conducted under color of state law. Because Bustos had alleged no constitutional injury attributed to the officers, Bustos had failed to state a claim that a City policy was the moving force behind violations of his constitutional rights. Also, since Bustos failed to allege his constitutional rights were deprived by the officers acting under color of state law, Bustos failed to show that any policy or practice of the supervisors resulted in a violation of his rights. Good v. Curtis, __F.3d __, 2010 U.S. App. Lexis 3207 (5th Cir. March 23, 2010) Good was convicted and served 13 years before he was exonerated by DNA evidence. Good filed suit against Curtis under §1983 alleging violations of the First, Fourth, Fifth, Eighth, Ninth and Fourteenth Amendments. The district court dismissed all claims based on the First, Fifth, Eighth and Ninth Amendments. Good alleged Curtis violated his rights under the Fourth and Fourteenth Amendments when he manipulated a photographic lineup in an effect to procure a false identification from the victim in a rape case. The court held that the initiation of criminal charges without probable cause may set in force events that run afoul of explicit constitutional protection. As to the qualified immunity inquiry, Good must show that the officers could not have reasonably believed that they had probable cause to arrest him for any crime. Knowing efforts to secure a false identification by fabricating evidence or otherwise unlawfully influencing witnesses constitutes a violation of the due process rights secured by the Fourteenth Amendment and any reasonable officer would know that framing an individual for a crime he/she did not commit by securing identification represents a constitutional violation. The court held that Curtis’ efforts to secure Good’s arrest knowing that he manufactured probable cause constitutes a clearly established violation of Good’s Fourth Amendment rights. Jennings v. Owens, __F.3d__, 2010 U.S. App. Lexis 7030 (5th Cir. April 5, 2010) Jennings sued officials from the Texas Board of Pardons and Paroles and the Texas Department of Criminal Justice for procedural due process violations in that the Board of Pardons and Paroles imposed sex offender special conditions on his parole without providing notice or hearing prior to the imposition of these conditions. The court held that stigmatizing social consequences and qualitative differences require due process protections. The sex offender conditions would impose stigmatizing classifications and create a constitutional deprivation if they are false and implies that the plaintiff is guilty of serious wrongdoing. The court held that the imposition of the three sex offender conditions would indeed cause stigma, if they were imposed on an individual who had never been convicted of a sex offense. However, Jennings had plead guilty to a sex offense and thus, the labeling of Jennings as a sex offender was not false and Jennings had a fair and full opportunity to contest that status.

Court of Appeals of Texas

Ogletree v. Glen Rose Independent School District, 2010 Tex. App. Lexis 1000 (Tex. App. – Waco, February 10, 2010, pet. filed) Ogletree sued the school district for breach of contract and discrimination under §1983. The district filed a plea to the jurisdiction which was granted. Ogletree appealed and the decision was reversed in part and affirmed in part. On remand, the district court granted the school district’s motion for summary judgment. The court held that as to Ogletree’s breach of contract claim, she failed to exhaust her administrative remedies which deprived the court of subject matter jurisdiction. As to her discrimination claim, Ogletree was terminated on October 3, 2002 but did not file suit until April 27, 2005 which was not within the two year statute of limitation for §1983 claims. Hinterlong v. Arlington Independent School District, 210 Tex. App. Lexis 1010 (Tex. App. – Fort Worth, February 11, 2010, pet. filed) The school district discovered a thimble–full of a substance that smelt like alcohol in a water bottle in the student’s vehicle parked on school property. The school district’s zero tolerance policy required the student’s removal from the high school and placement in an alternative school. The student sued the school district under §1983 alleging the school district’s zero tolerance policy did not meet due process because it subjects to punish students who do not knowingly or consciously possess alcohol. The court found that the student received hearings before the vice principal, principal, the administrative appeals panel and the superintendent. The superintendent informed the student that he would overturn the decision of the administrative appeals panel if he was provided certain evidence from the student. The student presented no such evidence. The court held that the school district provided an opportunity to the student to present evidence that he lacked knowledge of the water bottle and its content. Since the school district provided an escape mechanism in lieu of strict application of the zero tolerance policy, no due process violation had occurred. Simmonds v. TDCJ, 210 Tex. App. Lexis 1338 (Tex. App. – Waco, February 24, 2010, no pet.). Simmonds, an inmate, sued individual officials of the Texas Department of Criminal Justice under §1983 alleging a due process violation in the confiscation of his typewriter by applying a non-existing property rule and by confiscating his typewriter as a punishment in lieu of charging him with a disciplinary case and having a disciplinary hearing relating to his possession of the typewriter as contraband. The officials filed a motion to dismiss arguing that they followed TDCJ rules in confiscating the property and the grievance system afforded him due process, noting the application of the Parratt/Hudson doctrine. The district court dismissed the claims as frivolous. The court held that the Parratt/Hudson doctrine did not apply because the confiscation of the typewriter was not a random, unauthorized act by a state employee but rather was done under the authority of the TDCJ rules and procedures. The court held that Simmonds’s §1983 claim against the officials has an arguable basis in law and in fact and should not have been dismissed as frivolous. Hamilton v. Pechacek, 210 Tex. App. Lexis 1793 (Tex. App.–Fort Worth, March 11, 2010, no pet.) Hamilton, an inmate, sued Pechacek alleging that he caused a cup of hot coffee to be spilt on him and his personal property. Although Hamilton did not expressly allege violations of the United States Constitution, the court liberally construed his petition to assert claims under §1983. The district court dismissed the suit as being frivolous. The court held that the Texas Legislature has provided an administrative remedy to compensate inmates for property lost or damaged by prison officials. Because they have an adequate post-deprivation remedy, inmates in Texas have no arguable basis in law for asserting a §1983 due process claim for the intentional destruction of their property by a prison officer. In Re Danny L. Jones, 210 Tex. App. Lexis 1947 (Tex. App.–Houston [1st Dist.], March 18, 2010, no pet.) Jones, an inmate, sued two employees at the Darrington Prison Unit under §1983 alleging that his removal from the prison’s craft shop was due to racial profiling and racial discrimination and his constitutional rights of equal protection and due process had been violated. The district court dismissed the lawsuit with prejudice on the grounds that he failed to state a cause of action as a matter of law. The court held that there was no constitutional right of access to the prison craft shop and any disciplinary action against the inmate was the cause of his detention and removal from the craft shop. The due process clause is not invoked when an unauthorized, intentional act of a state prison official causes loss of property if there is an adequate post deprivation remedy. The court held that Jones did not state a cause of action for equal protection, retaliation or due process. The court held that §1983 does not impose liability for violations of duties of care arising under tort law and thus, there is no §1983 claim for conversion. Lambertz v. Robinson, 2010 Tex. App. Lexis 2086 (Tex. App.–Houston [14th Dist.], March 25, 2010, no pet.) Lambertz protested the property value of his property to the Appraisal Review Board. Lambertz appealed the decision pursuant to Chapter 42 of the Property Tax Code and alleged a claim under §1983 for denial of due process. Labertz asserted that the Board failed to permit him the opportunity to present evidence. The court held that under the Property Tax Code there is a right to a trial de novo in the district court on the issues passed by the Appraisal Review Board and thus, there is no violation of due process. The Texas Property Tax Code meets the requirements of due process. Rocha v. Potter County, 2010 Tex. App. Lexis 2859 (Tex. App. – Amarillo, April 20, 2010, no pet.) Rocha sued Potter County and the Sherriff under §1983 for the suicide death of her son. Potter County and the Sherriff filed their plea to the jurisdiction and motion for summary judgment. In her response, Rocha voluntarily dismissed her claim against the Sherriff. As for the plea to the jurisdiction, the court held that while the elements of a §1983 claim were alleged in the petition, the factual allegations do not support Rocha’s claims of Potter County’s policies and customs. The facts plead are not sufficient to support that Potter County had these claimed policies and customs nor how these policies and customs were the moving force behind the violation of Rocha’s son’s constitutional rights and thus, the plea was affirmed. As for the summary judgment, the court held that Rocha failed to present more than a scintilla of evidence to establish her §1983 claim. No evidence was presented that the county employees were actually aware of a substantial risk of serious bodily injury. Because Rocha has presented no evidence that any officer on duty knew that there were substantial health risks to her son, the officers could not have been deliberately indifferent to such risks and thus, no §1983 violation occurred. As for Rocha’s claim against Potter County for failure to train or supervise, the court held that Rocha failed to demonstrate a pattern of violations and that the inadequacy of the training and supervision is obvious and obviously likely to result in constitutional violation and thus, Good presented no evidence that Potter County was deliberately indifferent in its training and supervision and thus, there is no §1983 violation.

Spring 2010 Newsletter Premises Liability Update

admin — Thu, 01 Apr 2010 12:06:36 +0000

By Dean Foster

Hernandez v. Brinker Int’l., Inc., 285 S.W.3d 152 (Tex.App.—Houston [14th Dist.] 2009, no pet.) An air conditioning contractor fell through the roof of a restaurant while working on the air conditioning unit. The contractor sued the property owner for negligence in maintaining the roof. The property owner moved for summary judgment, contending that Chapter 95 of the Texas Civil Practice & Remedies Code precluded the plaintiff from recovering because the property owner never exerted control over the plaintiff’s work on the air conditioning unit. The Court of Appeals held that Texas Civil Practice & Remedies Code §95.002 was inapplicable because the contractor was working on the air conditioning unit, not the roof, at the time of his injury. The plain language of Section 95 states that it only applies to a claim “that arises from the condition or use of an improvement to real property where the contractor or subcontractor constructs, repairs, renovates, or modifies the improvement.” Because the air conditioning and the roof are separate improvements to real property, and the Plaintiff’s claim arose from the condition of the roof, which he was not repairing or modifying, Chapter 95 did not apply. TXI Operations, L.P. v. Perry, 278 S.W.3rd 763 (Tex. 2009). A truck driver invitee sued a property owner for injuries sustained when his truck hit a pothole, throwing him into the roof of the cab of the truck. The property owner had posted a 15 M.P.H. speed limit sign, and therefore argued that the duty to warn was satisfied. The Texas Supreme Court held that the speed limit sign had not discharged the property owner’s duty to warn the truck driver of the dangerous condition created by the pothole as a matter of law, especially in light of the evidence that the driver was traveling at the posted speed limit when his truck hit the pothole and caused the driver’s resulting injuries.

Spring 2010 Newsletter Commercial Trucking Update

admin — Thu, 01 Apr 2010 12:05:36 +0000

By Dean Foster

Ooida Risk Retention Group, Inc. v. Williams, 579 F.3d 469 (5th Cir. 2009) This appeal arises out of litigation pertaining to a single vehicle accident that killed Tony Moses. Moses was the owner of Slim Shady Express and a commercial motor carrier. At the time of the accident, Moses’ tractor/trailer was being driven by Derek Williams. Williams was driving the tractor/trailer rig on an interstate in Florida, and Moses was in the rig’s sleeper berth. Williams lost control of the rig causing it to overturn and roll down an embankment. Moses was crushed and killed. Moses’ family members filed a negligence suit in state court against Williams. Ooida provided a defense to Williams under a reservation of rights, but then filed suit in United States District Court (“District Court”) to obtain a declaration that it had no duty to defend or indemnify Williams in the underlying state court negligence suit. Among other issues, Ooida filed for a summary judgment in the declaratory action arguing that it had no duty to defend or indemnify Williams based on the “fellow employee” exclusion contained in the policy. The District Court held that the fellow employee exclusion did not operate to preclude coverage because the court could not determine whether Williams was an “employee” of Moses. The “fellow employee” exclusion of the policy excluded coverage for: “Bodily Injury” to any fellow “employee” of the “Insured” arising out of and in the course of the fellow “employee’s” employment or while performing duties related to the conduct of your business The District Court noted that the Motor Carrier Safety Act and its attendant regulations govern the meaning of terms under insurance policies designed to comply with federal requirements for motor carriers. Because evidence pertaining to Williams’ employment relationship with Moses fell outside the eight corners of the pleadings and policy, the District Court held that it could not find Williams to be a statutory employee. The Fifth Circuit Court of Appeals (“Fifth Circuit”) found that the underlying complaint did not establish Moses’ role in the truck at the time of the accident, and therefore a determination of his status as an “employee” required consideration of evidence outside the eight corners of the Complaint and the policy. The District Court inquired into whether Williams qualified as a statutory “employee” under the statute, but applied a strict “eight corners” approach in doing so. Ooida urged the Fifth Circuit to examine the extrinsic evidence under an exception to the eight corners rule recognized by some Texas appellate courts. In allowing an exception to the eight corners rule, the Fifth Circuit relied on prior statements of the Texas Supreme Court indicating that it would recognize an exception in the limited case where it is initially impossible to discern whether coverage is potentially implicated and when the extrinsic evidence goes solely to a fundamental issue of coverage that does not overlap with the merits of or engage the truth or falsity of any facts alleged in the underlying case. As a result, based on a review of the extrinsic evidence, including Williams’ deposition, the Fifth Circuit held that Moses was a statutory “employee” under §390.5 of the Motor Carrier Safety Act and the fellow employee exclusion applied to negate Ooida’s duty to defend the underlying suit.

Spring 2010 Newsletter Products Liability Update

admin — Thu, 01 Apr 2010 12:04:39 +0000

By Rocky Little

1. Spir Star AG v. Kimich, 53 Tex. Sup. Ct. J. 423 (Tex. 2010). Louis Kimich was seriously injured allegedly as a result of the rupture of a high pressure hose. The hose was manufactured in Germany by a German corporation, “AG,” and sold to its exclusive distributor in Texas and North America, “LTD,” whose offices are in Houston. The issue addressed by the Texas Supreme Court is whether the German manufacturer is subject to specific jurisdiction by Texas courts. Specific jurisdiction is distinguished from general jurisdiction in that under general jurisdiction, a company can be sued for virtually any cause of action. Specific jurisdiction, on the other hand, is appropriate when 1) the defendant’s contacts with the forum state (Texas) are purposeful, and 2) the cause of action arises from or relates to the defendant’s contacts. The touchstone of jurisdictional due process is purposeful availment, which requires a defendant to seek some benefit, advantage, or profit by availing itself of the jurisdiction. The question for the court was whether AG purposefully directed acts towards Texas or purposefully availed itself to the benefits and protections of Texas law. The court noted that not only did AG market its product through a Texas distributor, but that AG directly targeted the Texas market. Therefore, the court concluded that AG, the German manufacturer, is subject to specific jurisdiction for injuries allegedly arising out of the hoses that it manufactured and sold in Germany. 2. Leal v. State Farm Mut. Auto. Ins. Co., No. 04-09-00308-CV, (Tex. App. – San Antonio, March 17, 2010) The plaintiff was killed in an auto accident while riding in a Honda Accord. The car had been in a previous collision in which the driver was a State Farm insured. State Farm paid its insured for the value of the car and obtained title. A month later, State Farm surrendered title and obtained a Texas salvage title certificate indicating the car was severely damaged to the extent of 75% or more of its value. State Farm fully complied with regulations set out in Chapter 501 of the TEXAS TRANSPORTATION CODE when it obtained the Texas salvage title certificate. The next month, State Farm sold the car in its unrepaired condition at an insurance auto auction. The salvage status of the car was disclosed at the auction, and L. Nicoya Auto purchased the vehicle. Thereafter, L. Nicoya Auto repaired the Honda Accord and sold it with a certificate of title containing a “rebuilt salvage” designation. In this suit, the plaintiff asserts both negligence and strict products liability causes of action based on State Farm’s alleged failure to inspect and failure to warn subsequent purchasers of the salvage-titled Honda Accord’s safety and suitability for rebuilding, reconditioning, or repair. The court held that State Farm owed no duty other than what was set out in Chapter 501 of the TEXAS TRANSPORTATION CODE. Therefore, State Farm owed no additional duty to inspect or warn of a salvage-titled car’s safety and suitability for rebuilding, reconditioning, or repair 3. Centocor, Inc. v. Hamilton, No. 13-07-00301-CV, (Tex. App. – Corpus Christi-Edinburg, March 4, 2010). Patricia Hamilton sued Centocor, Inc. after suffering a drug-induced, lupus-like syndrome allegedly caused by her use of Remicade, a drug manufactured by Centocor. Ms. Hamilton was shown a video that overemphasized the benefits of Remicade, but intentionally omitted warnings about the adverse side effects she suffered. Remicade was prescribed to Ms. Hamilton by a medical doctor. The court noted that a drug manufacturer has a duty to warn the ultimate consumers of its products about dangers associated with the products, and the “LEARNED INTERMEDIARY DOCTRINE” is merely a means of showing that the drug company complied with its duty to warn. Pursuant to the LEARNED INTERMEDIARY DOCTRINE, when a drug manufacturer properly warns a prescribing physician of the dangerous propensities of a drug, the manufacturer is excused from warning each patient who received the drug. In other words, the doctor stands as a learned intermediary between the manufacturer and the ultimate consumer. The issue in this case is whether a drug manufacturer can rely on its adequate warnings to physicians to satisfy its duty to warn the ultimate consumer, the patient, when it directly advertises to the patient in a misleading fashion. The court carved out an exception to the LEARNED INTERMEDIARY DOCTRINE in this case, and held that it cannot. 4. Manchester Tank & Equip. Co. v. Engineered Controls Int’l, Inc., No. 10-08-00207-CV (Tex. App. – Waco, December 30, 2009). This indemnity action resulted from a products liability lawsuit filed after an explosion of an LP-gas cylinder that killed two people and severely burned four others. The suit was brought against the manufacturer of the cylinder, Manchester, as well as the manufacturer of the valve assembly, ECI. Both Manchester and ECI settled with the Plaintiffs, and thereafter sought indemnification from each other. The duty to indemnify was analyzed pursuant to Chapter 82 of the TEXAS CIVIL PRACTICE & REMEDIES CODE. Previously, in General Motors Corp. v. Hudiburg Chevrolet, Inc., the Texas Supreme Court indicated that the duty to indemnify could be offset in claims against component product manufacturers and final product manufacturers in certain circumstances, based on proof rather than mere pleadings. The court held that if neither the component product manufacturer nor the finished product manufacturer is innocent, both indemnity claims under the statute fail. Likewise, if both the component product manufacturer and the finished product manufacturer are innocent, the indemnity claims offset each other. In this case, there was no proof that either the cylinder (final product) or the valve (component) was defective. Rather, the proof established that both parties are innocent manufacturers. Therefore, offsetting indemnity is appropriate, and both parties take nothing from the other.

SPRING 2010 NEWSLETTER TAKINGS, ZONING AND ANNEXATION CASE LAW UPDATE

admin — Thu, 01 Apr 2010 12:03:33 +0000

by John Husted

Texas District Courts

City of Houston v. Student Aid Foundation Enterprises, 2010 Tex. App. LEXIS 3286 (Tex. App. – Houston [14th Dist.] May 4, 2010, no pet. h.) A regulatory takings claim based on a city’s ordinance that limits land development is not ripe absent evidence or allegations of an actual intent to sell the property or build on it, even if the ordinance made the property less marketable. The City amended its code of ordinances to impose new, more stringent restrictions on development in areas designated as a “floodway.” It prohibited new permits and most variances, unless they were necessary. The new ordinance placed the plaintiff property owner’s property in the floodway for the first time. The property owner alleged that the City’s ordinance constituted a taking, because the strict development restrictions meant it could neither construct improvements nor sell it to anyone who wished to do so. The City filed a plea to the jurisdiction, arguing that plaintiff’s claim was not ripe. The trial court denied the City’s plea. The Court of Appeals found that the property owner could not demonstrate ripeness, because the record contained no allegations or evidence that it intended to do anything with the property while the amendment was in effect. Since there was no intention to do anything with the property, the property owner could not show anything more than a hypothetical injury, even though the ordinance may have made the property less marketable. Therefore, the claim was dismissed for lack of jurisdiction. City of Victoria v. Wayne, 2010 Tex. App. LEXIS 2768 (Tex. App. – Corpus Christi April 15, 2010, no pet. h.) The Declaratory Judgment Act does not waive governmental immunity as to claims for injunctive relief nor does it permit courts to issue advisory opinions. Wayne brought suit against the City of Victoria because it planned to install new curbs on the streets abutting various property he owned. The new curbs would greatly reduce access to Wayne’s property. Wayne sought declaratory and injunctive relief under the Declaratory Judgment Act, requesting a declaration that the original curbs were “grandfathered” and did not need to comply with the new municipal ordinance. Wayne also sought injunctive relief ordering the City to restore those curbs that had already been altered to their original state. The court of appeals held that there is no waiver of governmental immunity as to Wayne’s request for injunctive relief. In addition, the court held that it lacks jurisdiction to consider Wayne’s request for declaratory relief insofar as his request relates to curbs that have already been installed. Issuing a decision as to the installation of curbs that have already been installed would constitute an advisory opinion. However, since the evidence indicated that the City had not completed all of the relevant curbs, the court of appeals remanded for further proceedings. AN Collision Ctr. of Addison v. Town of Addison, 2010 Tex. App. LEXIS 2713 (Tex. App. – Dallas April 12, 2010, no pet. h.) Failure of a municipality to alter municipally-owned property so as to prevent flooding of a neighboring property does not constitute an intentional act for purposes of a Takings Claim under the Texas Constitution. Mere operation and maintenance of the municipally-owned property similarly does not constitute an intentional act unless the operation and maintenance itself causes the flooding. The Collision Center brought suit against the Town of Addison alleging that the Addison Airport, which is owned, operated and maintained by the Town, was causing flooding on adjacent property owned by the Collision Center. The Collision Center contended that the Town’s actions violated the Takings Clause of the Texas Constitution. The court of appeals rejected the Collision Center’s claim, holding that the Collision Center had failed to provide evidence that the Town had taken an intentional act with knowledge that flooding would occur. The Town’s failure to rectify the problem did not constitute an intentional act for purposes of the Takings Clause. In addition, the Town’s operation and maintenance of the airport did not constitute an intentional act for purposes of the Takings Clause because there was no evidence to suggest that the flooding was caused by the operation and maintenance of the airport. Alewine v. City of Houston, 2010 Tex. App. LEXIS 2491 (Tex. App. – Houston April 8, 2010, no pet. h.) Merely having a house that is somewhat less desirable to live in does not rise to the level of a compensable “taking” under Article I, Section 17 of the Texas Constitution. Homeowners in a neighborhood near an airport brought an inverse condemnation claim against the City, because the construction of a new runway resulted in increase airplane flights over their neighborhood. The homeowners testified that the overflights made their neighborhood less desirable. They testified that conversations were impossible, television reception was disturbed, sleep was interrupted, children and pets were frightened or became nervous or irritable, and it was difficult to entertain or conduct telephone conversations. The trial court dismissed the case on summary judgment. To establish a taking by overflight, the landowner must show that the flights directly, immediately, and substantially interfere with the land’s use and enjoyment. The landowner must show that the property is no longer usable for its intended purpose. Though they showed that the neighborhood was less desirable, the landowners did not meet this standard for takings by overflight, so the trial court’s judgment was affirmed. Sweed v. City of El Paso, 2010 Tex. App. LEXIS 2047 (Tex. App. – El Paso March 24, 2010, no pet. h.) An individual lacks standing to bring an unconstitutional takings claim against a city for demolishing a building he owned prior to its foreclosure for delinquent property taxes if the individual did not attempt to pay the lien rendered against the building and did not attempt redemption within six months of the tax sale. The City brought suit for the recovery of delinquent property taxes on a building owned by Sweed. After foreclosure, the building failed to receive any bids at a tax sale auction, so the property was thereby purchased by the City. The City later demolished the property, because it was a health and safety hazard. Nine months after the tax sale, Sweed brought an unconstitutional takings claim against the City. Sweed alleged that he was the owner of the property, but the City alleged that he lacked standing. The Texas Tax Code allows for a previous owner to attempt redemption within six months following the tax sale of a property. The court found that the sole ownership of the property vested with the City when Sweed did not attempt redemption within the six month period, and did not attempt to pay the lien rendered against the building pursuant to the foreclosure. Therefore, the City had the authority to demolish the building and Sweed lacked standing. City of Carrollton v. RIHR, Inc., 2010 Tex. App. LEXIS 1887 (Tex. App. – Dallas March 18, 2010, no pet. h.) An unconstitutional exaction that constitutes a taking for purposes of the Takings Clause of the Texas Constitution occurs when a municipality demands payment. RIHR purchased two of six lots owned by Josey Park, LP as part of a foreclosure sale. There was a dilapidated retaining wall on some of the other lots owned by Josey Park. The retaining wall collapsed in 2004 and the City notified Josey Park that it would need to be removed. RIHR purchased its two lots in 2005, after the retaining wall had become an issue. When RIHR sought a permit to finish construction on homes on its two lots, the City refused to grant the permits until RIHR contributed one-third of the costs associated with removal of the collapsed retaining wall. RIHR brought suit alleging an unconstitutional taking and seeking declaratory relief under the Declaratory Judgment Act. At trial, the jury returned a verdict in favor of RIHR, finding that the retaining wall had no connection to the two lots purchased by RIHR. The City appealed. The City contended that no unconstitutional exaction had occurred because the City had ultimately granted the permits without having been paid the cost of removal of the wall. The court of appeals rejected the City’s argument, noting that the City only provided the permits pursuant to a preliminary injunction from the trial court. Moreover, the court of appeals held that an unconstitutional exaction occurs when the demand for payment is made, not when payment is made. As to RIHR’s request for attorney’s fees under the Declaratory Judgment Act, however, the court of appeals held that RIHR’s request for declaratory relief was improper because it was basically the same claim as RIHR’s Takings claim. Consequently, the trial court abused its discretion in granting attorney’s fees under the Declaratory Judgment Act. Cypress Forest Public Utility District v. Kleinwood Municipal Utility District, 2010 Tex. App. LEXIS 1825 (Tex. App. – Houston [14th Dist.] March 16, 2010, no pet. h.) In the context of eminent domain, condemned property does not include contract rights. Two utility districts were competing to secure a contract for the annexing of certain property to their respective districts. The property, owned by developers, was adjacent to both districts. The developers entered into a contract with Kleinwood that would eventually provide for the annexation of the property into its district. Soon thereafter, Cypress Forest encouraged the developers to abandon the Kleinwood annexation agreement and enter into a similar one with Cypress Forest. The developers later did so. Kleinwood filed an article I, section 17 takings claim against Cypress Forest, based on a taking of Kleinwood’s right to annex the tract and to collect ad valorem taxes from property owners within the tract. Cypress Forest filed a plea to the jurisdiction, arguing that its contracting with the developers was neither a physical taking, nor a regulatory taking, and it was not a use of eminent domain. Therefore, its immunity was not waived. There was no regulation to establish a regulatory taking. Further, eminent domain involves condemnation of real property, not the alleged taking of property interests created under a contract. Therefore, the alleged taking of Kleinwood’s contract rights was not an exercise of eminent domain. Finally, the property interests that Kleinwood asserts were taken—the right to annex and to tax the property owners in the future—were not vested property interests to support a valid takings claim. The court reversed and dismissed the suit for want of jurisdiction. Trudy’s Texas Star, Inc. v. City of Austin, 2010 Tex. App. LEXIS 1760 (Tex. App. – Austin March 12, 2010, no pet. h.) A City will not be estopped from enforcing a governmental function, even where a property owner incurred great expenses when relying on an agreement with the City and the City’s assurances. The restaurant constructed improvements without obtaining advance approvals and permits from the City, as the City Code requires. The City, however, afforded the restaurant the opportunity to obtain them retroactively, and memorialized this through a Rule 11 agreement. After the City allegedly induced the restaurant for months to pursue at great expense and inconvenience, the satisfaction of the several regulatory demands, the City initially approve the site plan. A month later, the City completely reversed its position, and said the restaurant did not comply with the Code, which meant the restaurant had to demolish some or all of its improvements. The City resumed litigation against the restaurant, and the restaurant asserted, among other things, the defense of equitable estoppel. The court applied the factors established by the Texas Supreme Court in City of White Settlement v. super Wash, Inc., 198 S.W.3d 770 (Tex. 2006), for determining claims of estoppel against a governmental entity. Even though the restaurant expended large amounts of money pursuant to the City’s directions, because (1) a city cannot be estopped in the exercise of its governmental functions, (2) the City did not directly benefit in any way from this particular enforcement, and (3) the City’s assurances were not deliberately calculated to mislead, (4) there may be other available remedies, and because (5) the restaurant’s own conduct contributed, since it initially built the improvements without permit, estoppel would not be proper. Save Our Springs Alliance v. City of Dripping Springs, 304 S.W.3d 871 (Tex. App. – Austin February 11, 2010, pet. denied) Environmental group lacked standing to challenge development agreement between municipality and developers that guaranteed municipal development standards would remain consistent for between fifteen and twenty-five years. The City of Dripping Springs entered into development agreements with two developers to develop large areas in the City’s extraterritorial jurisdiction. The agreements guaranteed that development standards would remain consistent for a period of between fifteen and twenty-five years. Save Our Springs challenged the development agreements, contending that the agreements violated the Texas Constitution by impinging on the right of local self-government, impairing the preservation of a republican form of government, and contracting away legislative powers. The City filed a plea to the jurisdiction, asserting that Save Our Springs lacks standing to challenge the development agreements. The trial court granted the plea to the jurisdiction and the court of appeals affirmed.

Frank Valenzuela Becomes Member of FHMBK

admin — Thu, 22 Apr 2010 15:47:43 +0000

We congratulate FRANCISCO J. VALENZUELA on becoming a Member of the firm. Since joining the firm as an associate in 2007, Mr. Valenzuela has distinguished himself in the areas of school litigation, employment litigation, local government defense and municipal law. Please join us in congratulating Mr. Valenzuela for this significant accomplishment

FHMBK Rising Stars

admin — Thu, 22 Apr 2010 15:51:36 +0000

We congratulate JOSHUA A. SKINNER FRANCISCO J. VALENZUELA JOHN D. HUSTED on being named in the Texas Super Lawyer Rising Star Edition for 2010 as Rising Stars. Mr. Skinner is a Rising Star in Government/Cities/Municipalities. He is a Member with FHMBK whose practice focuses on Constitutional law, local government law, school law, and employment law. Mr. Skinner’s practice also includes general counsel work for local governmental entities. Mr. Valenzuela is a Rising Star in Government/Cities/Municipalities. He is a Member with FHMBK whose practice focuses on school litigation, employment litigation, and local government defense. Mr. Valenzuela’s practice also includes general counsel work for local governmental entities. Mr. Husted is a Rising Star in Schools and Education. He is an Associate with FHMBK whose practice focuses on local government defense, employment litigation, school litigation, and appellate advocacy. Please join us in congratulating Mr. Skinner, Mr. Valenzuela and Mr. Husted for this significant accomplishment.

The Ninth Annual Texas Legal Update

admin — Thu, 20 Jan 2011 17:55:59 +0000

Hot Topics in Constitutional, Civil Rights and Local Government Law By Thomas P. Brandt, John F. Roehm III, Joshua A. Skinner, Francisco J. Valenzuela and John D. Husted Medicare Secondary Payer Procedural Guidance Medicare Subrogation By Sally Stalcup Premises Liability Update By Marc H. Fanning and Dean Foster How to Get the Most Out of Your Relationship with Your Law Firm By Joshua T. Kutchin Product Liability Update By Barry H. Fanning, Gerald B. Lotzer and Ron H. Ihle Supreme Court: Texas Tort Law Update By Don D. Martinson and Leslie Echols Pitts Supreme Court Update: Texas Insurance Law Update By Don D. Martinson and Leslie Echols Pitts Claims Handlers Checklist — Third Party Liability Claims By Barry H. Fanning and Gerald B. Lotzer Social Media Legal Issues — Virtual Friends/Real Problems By Francisco J. Valenzuela The Twenty-Year Kerfuffle: The Texas Religious Freedom Restoration Act By Joshua A. Skinner

Two Attorneys Join FHMBK as Associates

admin — Thu, 20 Jan 2011 18:00:27 +0000

Announces two new Associates have joined the firm. Jenifer Kelley Jennifer joined Fanning Harper Martinson Brandt & Kutchin, P.C. in 2010. Her practice areas include insurance coverage advice and litigation and appellate advocacy. She worked as a briefing attorney for Justice Robert McCoy of the Second Court of Appeals in Fort Worth for two years before joining the firm. Jennifer received her B.A. from the University of North Texas, completing a double major in Finance and Marketing. She then went on to graduate from the Texas Wesleyan School of Law, where she served as a notes and comments editor for the Texas Wesleyan Law Review and as a Teacher’s Assistant for a Legal Research and Writing class. Laura O'Leary Laura joined Fanning Harper Martinson Brandt & Kutchin, P.C. in 2010. Her practice areas include local government law, school law, employment law, civil rights and appellate law. Admitted to the State Bars of Virginia in 1992, Connecticut in 1994, and Texas in 2010, Laura is currently licensed to practice in all Texas state courts. Laura previously worked in the litigation department of a mid-sized Washington, D.C. law firm. Laura received her undergraduate degree in psychology from the University of Pennsylvania and her law degree from the College of William and Mary where she was a member of the Law Review.

SUMMER 2010 NEWSLETTER Insurance Law Update

admin — Thu, 01 Jul 2010 12:03:29 +0000

by Rebecca Raper

State Farm Lloyds v. Page, 53 Tex. Sup. J. 826 (Tex. June 11, 2010) In Page, a homeowner sought coverage under her homeowners policy for mold damage to her home and the contents of her home caused by a plumbing leak. The insured homeowner took the position that policy was ambiguous and, therefore, coverage was afforded for all of her damages while State Farm argued that no coverage was provided for any of her damages. The Texas Supreme Court, however, held that the coverages provided for the dwelling (Coverage A) and the contents of the home (Coverage B) were distinct and separate and that while coverage is excluded for mold damages to the structure of the house under Coverage A, coverage is provided for mold damages to the contents of the home under Coverage B, when said mold damages result from plumbing leaks. Gilbert Texas Construction, L.P. v. Underwriters at Lloyd’s London,53 Tex. Sup. J. 780 (Tex. June 4, 2010). In Gilbert, a general contractor sought coverage under its excess CGL policy for claims made against it by a party who claimed that its building suffered flood damages caused by Gilbert’s work on a construction site in downtown Dallas. Gilbert had been hired by a governmental entity, Dallas Area Rapid Transit (DART), to oversee the construction project. The building owner sued Gilbert in tort and for breach of contract. In the breach of contract claim, the building owner alleged Gilbert assumed liability for the damage under its contract with DART. Except for the breach of contract claim, the trial court granted summary judgment for Gilbert on the basis of governmental immunity. The general contractor later settled the breach of contract claim and sought indemnity from its insurers. In the coverage suit, the insurer claimed that the policy’s contractual liability exclusion barred coverage for the breach on contract claims. The Texas Supreme Court agreed with the insurer, explaining that the relevant exclusion clearly applied to bar coverage for the breach of contract claims:

Considered as a whole, the contractual liability exclusion and its two exceptions provide that the policy does not apply to bodily injury or property damage for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement, except for enumerated, specific types of contracts called “insured contracts” and except for instances in which the insured would have liability apart from the contract. In this case, Gilbert agreed under its contract with DART to “repair any damage to . . . facilities, including those that are the property of a third party, resulting from failure to comply with the requirements of this contract or failure to exercise reasonable care in performing the work.” RTR originally sued on tort and statutory theories of liability, then added a breach of contract claim. But Gilbert prevailed on its summary-judgment motion, leaving only RTR’s breach of contract claim. Thus, the only liability theory remaining at the time Gilbert settled arose from Gilbert's undertaking in the contract with DART--an obligation Gilbert assumed by contract. And Gilbert does not claim there are facts that could result in its being liable under some other theory besides breach of contract.

The Gilbert court also addressed an argument that the excess insurer overstepped when it “urged” counsel for Gilbert to file a motion for summary judgment on all of the non-breach of contract claims so that the excess insurer could then deny any indemnity obligations that might later arise as to the remaining breach of contract claims. The court concluded (1) that the excess insurer was not exercising control of the defense and (2) that Gilbert was not prejudiced by any of the excess insurer’s actions with regards to its suggestions to defense counsel. As such, the excess insurer was not estopped from denying coverage for the breach of contract claims. Texas Health Insurance Risk Pool v. Sigmundik,53 Tex. Sup. J. 770 (Tex. May 28, 2010). In Sigmundik, a Texas health insurance risk pool appealed when the trial court refused to allocate any of the $800,000 settlement funds to it in a case in which it had intervened and established a right of subrogation for $336,874.71. The risk pool had paid the sums for the medical care of a man who was hurt in an oilfield explosion and later died of his injuries. The trial court denied the risk pool any recovery on the basis that the decedent’s estate and family had not been “made whole” by the settlement and therefore were entitled to all of the settlement proceeds. The risk pool argued that the express right to subrogation contained in the insurance policy was absolute and applied whether or not the other parties had been made whole. Reaffirming its decision in Fortis Benefits v. Cantu, 234 S.W.3d 642 (Tex. 2007), the Sigmundik court determined that the “made whole” doctrine has no application in a subrogation case based on a contractual right of subrogation. Employers Mutual Casualty Company v. Bonilla,2010 U.S. App. LEXIS 15607 (5th Cir. July 29, 2010). In Bonilla, the question before the Fifth Circuit was whether a commercial auto policy was liable for a $1.8 million verdict against a business owner. The business was a Jolly Chef mobile catering truck. A cook was seriously burned after a pilot light ignited some combustible material on the truck that had been put on the floor to break-up accumulated grease. The cook was washing dishes on the truck at the time of the accident. The insurer took the position that no coverage existed for the claims. The auto policy afforded coverage for claims “caused by an accident and resulting from the ownership, maintenance or use of a covered auto.” The Fifth Circuit examined whether the claim can be said to have arisen from the “use” of the truck. Eventually, the court concluded that the injuries did arise out of the “use” of the truck, explaining:

There is nothing in the caselaw to suggest that Texas would interpret “use” under a business auto policy, in which the stated purpose of the vehicles being insured was for mobile catering, in a way that did not include the hazards that arise from maintaining the mobile catering equipment. Cleaning a mobile kitchen was not simply a speculative event that might conceivably occur, nor was the cleaning foreign to the vehicle’s inherent purpose.

. . .

We go no further than to hold, in what is a slight Erie guess but relying on substantial direction from the Texas courts, that a business vehicle policy covers the intended and identified uses of that business vehicle. The “injury-producing act” was cleaning the floor of the truck so that food could safely be prepared. The cleaning was a natural, expected, and necessary use of mobile catering Truck 219 and was covered by the Auto Policy.

Amerisure Insurance Company v. Navigators Insurance Company,2010 U.S. App. LEXIS 14354 (5th Cir. July 13, 2010). In Amerisure, the Fifth Circuit addressed the viability of contractual subrogation claims among primary and excess insurers in light of the Texas Supreme Court’s holding in Mid-Continent Insurance Co. v. Liberty Mutual Insurance Co., 236 S.W.3d 765 (Tex. 2007). The case involved a primary insurer’s attempt to recover from an excess insurer $1 million it paid towards a settlement after the excess insurer pressured the primary insurer to tender its limits to get the underlying case against the mutual insured settled. The primary insurer paid its policy limits, but reserved the right to seek reimbursement. In the ensuing coverage litigation, it was determined that the primary insurer had no coverage obligations but that the excess insurer did owe coverage. The excess insurer nonetheless argued that the primary insurer had no subrogation rights in light of the Mid-Continent case and, therefore, could not seek reimbursement. In finding in favor of the primary insurer, the Amerisure court “reject[ed] the overly broad view of Mid-Continent’s subrogation exclusion” because that broad view would “effectively end contractual subrogation in Texas.” Rather, the Amerisure court concluded that the existing case law did not preclude the primary insurer’s subrogation claim against the excess insurer and that if coverage existed under the excess insurer’s policy, the primary insurer was able to pursue reimbursement from the excess insurer.

SUMMER 2010 NEWSLETTER TAKINGS AND ZONING LAW UPDATE

admin — Thu, 01 Jul 2010 12:04:24 +0000

by John Husted

Fifth Circuit

Texas Midstream Gas Services LLC v. City of Grand Prairie, 608 F.3d 200 (5th Circuit June 1, 2010) A governmental entity exercising its powers of eminent domain must still comply with a city’s reasonable, generally applicable zoning requirements. The natural gas pipeline operator announced plans to construct a natural gas pipeline and compressor station in the City. The City’s Unified Development Code covered natural gas compressor stations, requiring them to comply with setback rules, and other security and aesthetic rules. The operator sued the City, challenging its development code, alleging that it infringed on the operator’s eminent domain rights and was preempted by the federal Pipeline Safety Act. The operator did not show that it was exempt from the city’s zoning regulations or that its requirements were unreasonable or arbitrary. The operator, therefore, had to comply with the regulations notwithstanding its eminent domain powers.

Texas Courts of Appeals

City of Dallas v. Turley, 2010 Tex. App. LEXIS 5428 (Tex. App. – Dallas July 13, 2010) A landowner may not obtain declaratory relief declaring that a city had abandoned an easement by virtue of the Declaratory Judgments Act’s (“DJA”) limited waiver of immunity, where the validity of an ordinance or statute is not challenged, and the relief is sought against the city itself, not its officials. Several families owned properties that backed up to an easement. The easement was fenced off, landscaped, improved, and maintained as part of the landowners’ yards. Another landowner also owned real property adjoining these tracts and wanted to access their property through the easements and to install storm water pipe that crosses the back of the other landowners’ properties. The easement had never been used as a public street, and the City had abandoned part of the easement through ordinance, but the City contends the remainder of the easement had not been abandoned. The several families filed suit, seeking to prevent the City from opening the easements to traffic or making any public use of them. The landowners sought a declaration under the DJA that the City had abandoned public dedication of the easements, but they did not allege that this was by virtue of an invalid ordinance or statute. The City filed a plea to the jurisdiction based on immunity. The trial court granted the plea in part, but denied the plea as to this declaration. The Court of Appeals concluded that the trial court erred in denying the plea, because the landowners’ declaratory relief claim did not challenge the validity of a city ordinance, and because the claims were made against the City itself, not its officials. The limited waiver of immunity under the DJA only waives immunity for claims challenging the validity of ordinances and statutes. Gulf Coast Waste Disposal Authority v. Four Seasons Equipment, Inc., 2010 Tex. App. LEXIS 4842 (Tex. App. – Houston [1st Dist.] June 24, 2010) A party cannot voluntarily participate in a government process and then later claim that the process effectuated a government taking. Four Seasons, an equipment dealer, asserted a regulatory takings claim against the Gulf Coast Waste Disposal Authority. A compensable regulatory taking can occur when a governmental unit imposes restrictions that denies a property owner all economically viable use of its property or unreasonably interferes with the owner’s right to use and enjoy the property. Four Seasons alleged that the Authority committed a regulatory taking when it imposed the use of a reverse auction process to acquire certain equipment. However, Four Seasons’ own pleadings allege that it freely participated in the reverse auction process in which the Authority acquired the equipment; therefore, the Authority never “imposed” the reverse auction process on Four Seasons. A party cannot voluntarily participate in a government process and then later claim that the process effectuated a government taking. Since Four Seasons voluntarily participated in the reverse auction bidding process, its takings claim fails. Suleiman v. Texas Dept. of Public Transportation, 2010 Tex. App. LEXIS 4621 (Tex. App. – Houston [1st Dist.] June 17, 2010) Emotional-distress damages, and damages for cost of living and schooling elsewhere during a governmental entity’s construction pursuant to a partial-taking of the plaintiff’s property are not special damages for which compensation must be provided. A portion of a perimeter fence around the owners’ home was removed during the widening of a nearby intersection. The owners, concerned that the home was not safe for their children without a fence, made other living arrangements for their children while the construction was ongoing. The owners had the fence replaced at their own expense. The agency then condemned the land on which the fence stood. Though immunity to an intentional tort claim of trespass was barred by the Texas Tort Claims Act, the owners alleged that damages for emotional distress and the cost of alternate living arrangements and schooling for their children were special inverse-condemnation damages available pursuant to a takings claim under the Texas Constitution. Though a landowner is entitled to be made whole for the diminished value of the portion of land taken, there is no authority holding that emotional distress damages or damages for housing and schooling expenses are available. The owners were only entitled to be fully compensated for the special damages to their land. City of Carrollton v. HEB Parkway South, Ltd., 2010 Tex. App. LEXIS 4629 (Tex. App. – Fort Worth June 17, 2010) According to federal law, as a prerequisite to the ripeness of an as-applied regulatory takings claim, there must be a final decision regarding the application of the regulation to the property at issue. A court cannot determine whether a regulation goes too far unless it knows how far the regulation goes. The City maintained a stormwater ordinance, requiring property developers in certain areas to improve drainage channels. The ordinance allows for any person aggrieved by the ordinance to appeal to the Planning and Zoning Commission for a variance. The landowner constructed related improvements, and then brought suit against the City for inverse condemnation. The landowner, however, never sought a final decision regarding the application of the City’s regulations to its property, and did not seek a variance. Because the ordinance assigned the P&Z Commission authority to grant a variance, but the landowner did not seek a variance or show that doing so would be futile, the inverse condemnation claim was unripe.

SUMMER 2010 NEWSLETTER PRODUCTS LIABILITY UPDATE

admin — Thu, 01 Jul 2010 12:05:23 +0000

by Rocky Little

Crenshaw v. Kennedy and Newco, No. 04-09-00410-CV (Tex. App. – San Antonio, June 30, 2010). David Goring was killed while working on a drilling rig as he was moving two casing bails with the use of a braided wire rope sling that was attached by a sliding choker hook. Kennedy Wire Rope & Sling Company (“Kennedy”) manufactured the sling, and Newco Manufacturing Company, Inc. (“Newco”) manufactured the hook. The hook was a component of the sling assembly. In order to recover for a design defect in this products liability claim, the Plaintiff had to prove that:

the product was defectively designed so as to be unreasonably dangerous, taking into consideration the utility of the product and the risk involved in its use;
there was a safer alternative design; and
the defect was a producing cause of the death.

The court found that there was no evidence that the Newco hook was defective in and of itself. Rather, the hook as integrated into the wire rope sling by Kennedy was part of a defectively designed assembly. Because Kennedy was in total control of the design of the sling assembly, and Newco played no role in designing the sling assembly, Newco cannot be held liable for the alleged defective design of the sling. In other words, the only evidence pertaining to causation was that the accident was caused by the inappropriate application of the hook rather than the defective design of the hook. In re: Lufkin Industries, Inc., No. 06-10-00038-CV (Tex. App. – Texarkana, July 8, 2010). This mandamus proceeding was based on a products liability wrongful death claim pertaining to an 18-wheeler trailer manufactured by Lufkin Industries, Inc. (“Lufkin”). The Plaintiff alleged that Lufkin’s trailer was defective because it did not have side under-ride guards to prevent cars from running under the side of the trailer. The case was tried twice with diametrically different results: the first jury trial resulted in a multimillion dollar verdict for the Plaintiff, and the second jury trial resulted in a take-nothing verdict in favor of the Defendant. After the second trial, the court granted a new (third) trial citing juror inattention, the brevity of jury deliberations, erroneous exclusion of evidence, newly discovered evidence, inadmissible evidence presented to the jury, and the interest of justice and fairness. The appellate court noted that, in civil cases, our procedural rules expressly permit a trial court to grant a new trial on its own motion for any good cause, Tex.R.Civ.P. 320., and that trial courts are allowed “great discretion” in the granting of new trials. In detailing its reasons for granting the new trial, the trial court stated that the Defendant showed an un-redacted copy of the police report to the jury that informed them that the two children in the back seat of the car were not restrained. This was directly contrary to the court’s prior ruling on the admissibility of this matter. Therefore, the Court of Appeals denied the Petition for Writ of Mandamus and confirmed the trial court’s Order granting a new trial. Toyota Indus. Equip. Mfg. v. Carruth-Doggett, Inc., No. 01-09-00399-CV (Tex. App. – Houston, April 1, 2010). Sunesara was injured while operating a forklift manufactured by Toyota Industrial Equipment Manufacturing, Inc. (“TIEM”) and leased to his employer, International Rags, Ltd., by Carruth-Doggett, Inc. (“Carruth-Doggett”). Sunesara sued TIEM for a products liability claim based on a defectively manufactured forklift. One of the issues in this case was whether Sunesara’s pleadings triggered TIEM’s duty to indemnify Carruth-Doggett even though there was no products liability claim made against Carruth-Doggett. Chapter 82 of the Texas Civil Practice & Remedies Code defines “products liability action” as any action against a manufacturer or seller for recovery of damages . . . allegedly caused by a defective product, whether the action is based in strict tort liability, strict products liability, negligence, misrepresentation, breach of express or implied warranty, or any other theory or combination of theories. The court noted that the manufacturer’s duty to indemnify is triggered by the pleadings, and not by proof of a product defect. The court held that because the Plaintiff’s pleadings against TIEM included a products liability claim, TIEM had a duty to indemnify Carruth-Doggett, notwithstanding that the only claim against Carruth-Doggett was for negligence. Alza Corp. v. Thompson, No. 13-07-00090-CV (Tex. App. – Corpus Christi-Edinburg, April 1, 2010). This wrongful death case was based on a strict products liability claim for an alleged defectively manufactured Duragesic patch which allegedly caused a fatal overdose of fentanyl. Fentanyl is described as a powerful narcotic painkiller administered by a Duragesic patch that releases doses of the medicine into the bloodstream via the skin. The Duragesic patch is a prescription pain patch utilized to treat moderate to severe chronic pain. It is a transdermal system that adheres to the patient’s skin and is designed to provide the patient with a continuous, systematic delivery of fentanyl, a potent opioid analgesic, for a period of 72 hours. The Harris County Medical Examiner’s report showed that Thompson’s cause of death was an enlarged heart, and made no mention of fentanyl, which was not tested for. However, Thompson’s family had an outside laboratory perform testing that confirmed a toxic level of fentanyl. According to Thompson’s medical records, she was wearing a Duragesic patch upon admission to the emergency room, which was removed and discarded by the emergency room doctor before it could be analyzed. One of the issues in this case is whether direct evidence was required to prove a defect in the patch or whether that defect could be proved by circumstantial evidence, including expert opinion testimony. The court found that the Plaintiff could meet the burden of proof with circumstantial as well as direct evidence, and affirmed the jury’s verdict that there was a manufacturing defect in the Duragesic patch worn by Thompson.

SUMMER 2010 NEWSLETTER COMMERCIAL TRUCKING LITIGATION UPDATE

admin — Thu, 01 Jul 2010 12:06:50 +0000

By Dean Foster

Safeshred, Inc. v. Martinez, No. 03-08-00626-CV (Tex.App.—Austin, April 23, 2010, 2010 Tex.App. LEXIS 3003) Safeshred, Inc. fired Luis Martinez after he refused to drive a commercial vehicle he found to be unsafe and non-compliant with the Federal and State regulations. Martinez sued Safeshred, alleging he had been terminated for refusing to commit an illegal act. See, Sabine Pilot Service Inc. v. Hauck, 687 S.W.2d 733, 735 (Tex. 1985) (recognizing exception to At Will Employment Doctrine when an employee is fired for refusal to commit illegal act). Following a jury trial, the trial court entered judgment awarding Martinez economic damages for lost wages and benefits, $10,000 in compensatory damages for non-economic losses, including mental anguish, and $200,000 in exemplary damages. Safeshred appealed the verdict, arguing on appeal that: (1) exemplary damages are not available in a Sabine Pilot cause of action absence the showing of an independent tort; (2) the evidence was legally and factually insufficient to prove malice, a predicate to finding award of exemplary damages; (3) the amount of exemplary damages was so excessive as to violate the United States Constitution and Texas law; (4) compensatory damages for mental anguish and related emotional losses are not available in a Sabine Pilot cause of action absence the showing of an independent tort; and (5) the evidence was legally and factually insufficient to support the award of compensatory damages. Martinez began work delivering documents for Safeshred in September of 2007. After only three days of work, Martinez was promoted to a position driving commercial vehicles for Safeshred. After pointing out to his supervisors on numerous occasions different safety violations with the trucks Martinez was being requested to drive and the manner in which the trailers were loaded, Martinez eventually refused to drive a truck hauling a flatbed trailer that he found to be loaded in an unsafe manner and in violation of DOT regulations. When Martinez communicated that he would not drive the unsafe load, Martinez was fired. After Martinez was fired, the load he refused to transport set untouched for approximately five days. A temporary worker was hired to drive the load. During transport the load of steel broke loose and crashed through the back window of the cab. Though neither the driver or other motorists were injured, the accident caused $1,800 worth of damage to the cab. In addressing the issue of whether punitive damages were recoverable in a Sabine Pilot cause of action, the court looked to the decisions interpreting the anti-retaliation statute, which bars employers from firing employees in retaliation for submitting a Worker’s Compensation claim. The Court of Appeals noted that at the time Sabine Pilot was decided, the Texas Supreme Court had previously held that punitive damages were available under the anti-retaliation statute. Noting that the purpose of the anti-retaliation statute is to deter employers from firing employee for engaging in a protected activity, the court found the same logic applied to the Sabine Pilot cause of action. The threat of punitive damages was held to be vital to achieving the purpose of the Supreme Court’s Sabine Pilot exception, which is to deter a violation of criminal laws by prohibiting employers from firing employees for refusal to commit illegal acts. In its fourth and fifth issues on appeals, Safeshred argued that compensatory damages for mental anguish and related emotional losses are not available under a Sabine Pilot cause of action in that, even if available, the evidence is legally and factually insufficient to support the jury’s award of compensatory damages for mental anguish. In this case, Martinez presented evidence that the ordeal was “very stressful” and caused him to lose “a lot” of sleep. However, he did not present direct evidence of the precise duration or severity of the mental anguish he suffered. The court noted that evidence that a plaintiff was unable to sleep, was depressed, and suffered from anxiety does not rise to the level of compensable mental anguish under Texas law. Although the emotions on which Martinez presented evidence were certainly real according to the Court of Appeals, the court held that the evidence did not rise to the level of compensable mental anguish. Accordingly, the court upheld Safeshred’s fifth issue on appeal and reversed the award of damages for mental anguish and in all other respects the judgment of the trial court was affirmed.

SUMMER 2010 NEWSLETTER PREMISES LIABILITY UPDATE

admin — Thu, 01 Jul 2010 12:07:32 +0000

By Dean Foster

Del Lago Partners, Inc. v. Smith, No. 06-1022, 2010 Tex. LEXIS 284, 53 Tex. Sup. J. 514 (Tex. April 2, 2010). This case concerned a bar owner’s liability for injuries caused when on patron assaulted another during a closing time melee involving 20-40 “very intoxicated” customers. The brawl erupted after 90 minutes of recurrent threats, cursing and shoving by two rival groups of patrons. Following nine days of conflicting evidence from 21 witnesses, the jury found the bar owner 51% liable and awarded the plaintiff roughly $1.48 million. The Court of Appeals affirmed the finding that a reasonable person who knew or should have known of the 1½ hours of ongoing heated verbal altercations and shoving matches between intoxicated bar patrons would reasonably foresee the potential for assaultive conduct to occur and take action to make the condition of the premises reasonably safe. Del Lago principally argued that it had no duty to protect Smith from being assaulted by another bar customer. In a premises liability case, the plaintiff must established a duty owed to the plaintiff, breach of the duty, and damages proximately by the breach. Whether a duty exists is a question of law for the court and turns on a legal analysis balancing a number of factors, including the risk, forseeability, and likelihood of injury, and the consequences of placing the burden on the defendant. Smith was an invitee, and generally a property owner owes invitees a duty to use ordinary care to reduce or eliminate an unreasonable risk of harm created by a premises condition about which the property owner knew or should have known. The court noted that it has never held that a bar proprietor always or routinely has a duty to protect patrons from other patrons, and the court did not so hold in this decision either. The court also noted that it has never held that a duty to protect the clientele arises when a patron becomes inebriated, or when words are exchanged between patrons that leads to a fight, and does not so hold now. Generally, a premises owner has no duty to protect invitees from criminal acts by third parties. An exception has been recognized when the owner knows or has reason to know of a risk of harm to invitees that is unreasonable and foreseeable. In analyzing the facts of this case using the elements outlined in Timberwalk Apartments Partners, Inc. v. Cain the court found that the circumstances had created a duty on Del Lago to use reasonable care to protect the invitees from imminent assaultive conduct. De Lago observed, but did nothing to reduce, a 1½ hour verbal and physical hostility in the bar. During all this time, Del Lago continued to serve the drunk rivals who were engaged in repeated and aggressive confrontations. The court held that Del Lago had a duty to protect Smith because Del Lago had actual and direct knowledge that a violent brawl was imminent between drunk and belligerent patrons, and had ample time and means to defuse the situation. Del Lago also argued that, assuming that it had a duty to Smith, the evidence was legally insufficient on the essential elements of breach of duty and proximate causation. The court held that a reasonable and fair-minded jury could find that Del Lago breached its duty of care to Smith by failing to take reasonable steps to diffuse the dangerous situation at the bar. The jury could have found that Del Lago breached its duty because security failed to monitor and intervene during the extended period when the two groups in the bar were becoming more and more intoxicated and antagonistic. At the time of the fight, the bar was the only place at the resort serving alcohol, and the security office was aware that the bar was crowded, but no witness saw an security in the bar during the 90 minutes of yelling, threatening, cursing, and shoving between drunk patrons. The bar staff continued to serve drinks and did not call security until after the fight started. As a result, the court held there was legally sufficient evidence for the jury to conclude that Del Lago bar personnel were fully aware of the events transpiring in the bar and nevertheless unreasonably neglected to notify security. Del Lago also argued that the case should have been submitted to the jury on a negligent activity theory of liability as opposed to premises liability. At the trial court level, Smith believed both theories were applicable to this case, but Del Lago objected to the submission of a negligent activity theory. The court held that Del Lago could not obtain a reversal on appeal on grounds that the jury should have decided the facts under a theory of liability that Del Lago itself persuaded the trial court not to submit to the jury. Even though the court held this ground for reversal was waived by Del Lago, it still addressed the issue of whether the case should have been submitted on a negligent activity theory of liability. The court noted that it has repeatedly treated cases involving claims of inadequate security as premises liability cases. The court noted that this case was largely based on Del Lago’s failure to properly use its security resources, and therefore did not warrant different treatment. Error in not allowing Smith to pursue a separate negligent activity claim, if any, was that Del Lago’s behest. Even as to the allegation “that we herded them out the door,” Del Lago argued at the charge conference that the evidence did not support a negligent activity claim because there was no direct correlation between Del Lago’s conduct in trying to push the patrons out the door once the fight erupted and Smith’s injury. The court concludes by noting the limitations of its decision to this particular fact scenario. The record in this case documented that for 1½ hours Del Lago knowingly served rowdy and drunk rivals who were engaged in repeated and aggressive verbal and physical confrontations. The tension at the bar turned into cursing, cursing led to threats, threats led to pushing, and all the above culminated in a full-scale brawl. Del Lago observed this activity, but did not to reduce the hostilities, and while the antagonism may have ebbed and flowed over those 90 minutes, “the liquor simply flowed.” Given this evidence, the court held the jury was free to find Del Lago’s response not just un-alert but unreasonable. Accordingly, the court affirmed the Court of Appeals judgment.

SUMMER 2010 NEWSLETTER CIVIL RIGHTS LAW UPDATE

admin — Thu, 01 Jul 2010 12:08:06 +0000

by John F. Roehm III

United States Supreme Court

Berghuis v. Thompkins, 560 U.S. __ (June 1, 2010) In order to invoke one’s Miranda right to remain silent during interrogation, one must do so “unambiguously”. Remaining silent during an interrogation is not sufficient to invoke one’s right to remain silent. Thompkins, a suspect in a murder case, was provided a written Miranda warning form and asked to read the warnings out loud to ensure he could read English. Thompkins refused to sign the form. At no point during the interrogation did Thompkins say he wanted to remain silent, that he did not want to talk to the police, or that he wanted an attorney. Thompkins was largely silent during the interrogation although he gave a few limited verbal responses including stating “yes” to the question “Do you pray to God to forgive you for shooting that boy down?” Thompkins was charged with murder and moved to suppress his inculpatory statement as being involuntary. His motion was denied. Thompkins appealed the trial court’s refusal to suppress his statement under Miranda and the trial court’s denial of his motion for new trial based on ineffective assistance of counsel. The U.S. Supreme Court held that in the context of invoking the Miranda right to counsel, a suspect must do so “unambiguously”. If an accused makes a statement concerning the right to counsel that is ambiguous or equivocal or makes no statement, the police are not required to end the interrogation or ask questions to clarify whether the accused wants to invoke Miranda rights. The Court held that there is no reason to adopt a different standard for determining when an accused has invoked his Miranda right to remain silent and his Miranda right to counsel. The Court found that if Thompkins wanted to remain silent, he could have said nothing in response or unambiguously invoke his Miranda rights ending the interrogation. Thompkins silence for the most part did not invoke his right to remain silent. The U.S. Supreme Court found that Thompkins did not establish an ineffective assistance of counsel claim because he failed to show prejudice. Thompkins did not show that there was a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different, considering the totality of the evidence before the Judge or Jury. The court concluded that there was no constitutional violation. City of Ontario, Calif. v. Quon, 560 U.S. __ (June 17, 2010) An employer’s search of an employee’s text messages from an employer-issued pager was reasonable under the circumstances. The City provided its police officers with pagers which had a monthly limit. On several occasions, Officer Quon exceeded the monthly limit and personally paid the difference out of his own pocket. The Police Chief, wanting to know whether the City’s monthly limit was sufficient, requested the City’s service provider to provide copies of the transcripts of Officer Quon’s text messages for a two month period. A review of Officer Quon’s text messages showed that many of his on-duty text messages from his employer-issued pager did not relate to police business and, as a result, Officer Quon was disciplined. Officer Quon filed suit alleging his Fourth Amendment right was violated by the City’s review of his text messages. The U.S. Supreme Court did not resolve the parties’ disagreement over Officer Quon’s privacy expectation but disposed of the case on narrower grounds. The Court assumed that Officer Quon had a reasonable privacy expectation and found that the City’s review of Officer Quon’s pager transcript was reasonable because it was motivated by a legitimate, work-related purpose and it was not excessive in scope. The Court found that the review was for non-investigatory work-related purposes to find out if the monthly limit was appropriate – i.e., was an employee paying for work-related text messages or was the City paying for an employee’s personal use. The Court found that the City’s review of the transcript was reasonable because it was an efficient and expedient way to determine whether Quon’s overages were the result of work-related messages or personal use and it was not excessively intrusive since it was limited to just two months. The Court found no Fourth Amendment violation. Doe v. Reed, 560 U.S. __ (June 24, 2010) The disclosure of referendum petitions do not, as a general matter, violate the First Amendment. Protect Marriage Washington submitted a petition to the Secretary of State for a referendum on a state law which expanded the rights and responsibility of state-registered domestic partners, including same-sex partners. The Secretary of State verified the signatures on the petition and placed the matter on the ballot. Several individuals and entities requested copies of the petition pursuant to the Washington Public Records Act (“PRA”). Protect Marriage Washington and several signatories of the petition filed a complaint and motion for injunctive relief in federal district court seeking to enjoin the public release of the petition on the grounds that disclosure of signatory information violates the First Amendment – i.e., an individual expresses a view on a public matter when he signs a petition and the expression of a political view implicates a First Amendment right. Protect Marriage Washington alleged that the PRA is unconstitutional as applied to referendum petitions and is unconstitutional as applied to this petition. The district court granted injunctive relief on the grounds that the plaintiffs were likely to succeed on the merits that the PRA is unconstitutional as applied to referendum petitions. The district court did not address Plaintiff’s other claim. The court of appeals reversed. The U.S. Supreme Court held that First Amendment challenges to disclosure requirements in the electoral context are viewed under an exacting scrutiny standard which requires a substantial relation between the disclosure requirement and a sufficiently important governmental interest. The Court found that there was a sufficiently important governmental interest in the disclosure requirement in that the PRA preserves the integrity of the electoral process by combating fraud, detecting invalid signatures, and fostering government transparency and accountability and thus, there is no First Amendment violation and the statute is constitutional. Holder v. Humanitarian Law Project, 560 U.S. ____(June 21, 2010) A federal statute which makes it a crime to “knowingly provide material support or resources to a foreign terrorist organization” does not violate a person’s First Amendment right to freedom of speech and association and was not impermissibly vague. Congress passed a law which prohibits material support or resources to certain foreign organizations that engage in terrorist activity, 18 USC § 2339B. Plaintiffs seeking to support the lawful, nonviolent activities of several foreign terrorist organizations brought suit challenging the constitutionality of the material support statute. Plaintiffs claimed the statute was unconstitutional because it violated their freedom of speech and association under the First Amendment because it criminalized their provision of material support to terrorist organizations, without requiring the government to prove that Plaintiffs had a specific intent to further unlawful ends of those organizations and the statute was unconstitutionally vague under the Due Process Clause of the Fifth Amendment. Both the district court and court of appeals found that there was no First Amendment violation but did find that the statute was impermissibly vague. The U.S. Supreme Court found that the statute prohibits knowingly providing material support and the necessary mental state is knowledge about the organization’s connection to terrorism not specific intent to further the organization’s terrorist activities. The Court found that the statutory terms are clear in their application to Plaintiff’s proposed conduct and thus, not impermissibly vague under the due process clause of the Fifth Amendment. The Court found that as applied to Plaintiffs, the material support statute does not violate their freedom of speech because under the statute Plaintiffs may say anything they wish on any topic. The Court further found that the statute does not penalize mere association with a foreign terrorist organization but simply prohibits the act of giving foreign terrorist groups material support. The Court found no First Amendment violation and the statute was declared to be constitutional. Christian Legal Society Chapter of the University of California v. Martinez, 560 U.S. ___ (June 28, 2010) Conditioning access to a student-organization forum on compliance with an all-comers policy is reasonable and viewpoint neutral and does not violate the United States Constitution. Hastings College of the Law had a program in place, Registered Student Organization (“RSO”), which provided student groups access to the use of school funds, facilities and channels of communications as well as Hastings’ name and logo. The one condition for the program was student groups had to comply with the school’s Nondiscrimination Policy. Hastings interpreted this policy to mandate acceptance of all comers. The Christian Legal Society excludes from affiliation homosexuals and those who hold religious convictions different from those in the Statement of Faith. Hastings rejected the Christian Legal Society’s application to the RSO because they excluded students based on religion and sexual orientation. Christian Legal Society sued Hastings under Section 1983 alleging that the rejection of its application due to Hastings’ all-comers policy violated its First and Fourteenth Amendment rights to free speech, expressive association and free exercise of religion. The U.S. Supreme Court found that the RSO program falls within the limited public forum category and thus, the appropriate framework for assessing Christian Legal Society’s speech and association rights is the less restrictive level of scrutiny in limited public forums-i.e. the access barrier must be reasonable and viewpoint neutral. The Court found that Hastings’ justifications for its all-comers requirement were reasonable in light of the forum’s purposes. The Court found that the all-comers policy caused no distinction between groups based on their message or perspective; rather, its requirement that all student groups accept all comers was viewpoint neutral. The Court held that Hastings’ all-comers policy is a reasonable, viewpoint neutral condition on access to the student-organization forum and thus, it found that there was no First Amendment free speech/expressive association violation. McDonald v. City of Chicago, Illinois, 560 U.S. ___ (June 28, 2010) The Second Amendment right to keep and bear arms is applicable to the States through the Fourteenth Amendment’s Due Process Clause. The City of Chicago and the Village of Oak Park enacted laws banning handgun possession by almost all private citizens. Petitioners, in light of the Supreme Court decision in District of Columbia v. Heller, 554 U.S. __ (2008), which held that the Second Amendment protects the right to keep and bear arms for the purpose of self defense, filed suit against the City alleging that the City’s handgun ban has left them vulnerable to criminals and the ban and related city ordinances violated the Second and Fourteenth Amendments. The Supreme Court in Heller did not opine whether the Second Amendment applied to the States. Petitioners argued that the right to keep and bear arms is protected by the Privileges or Immunities Clause of the Fourteenth Amendment and alternatively, the Fourteenth Amendment’s Due Process Clause incorporates the Second Amendment right. The City argued that a right set out in the Bill of Rights applies to the States only when it is an indispensable attribute of any civilized legal system. The City argued that since there are civilized countries that ban or strictly regulate the private possession of handguns, the right is not protected by due process and due process does not preclude such measures. The U.S. Supreme Court, relying on prior decisions that the Due Process Clause prohibits the States from infringing on the Bill of Rights protections, found that almost all of the Bill of Rights guarantees meet the requirements for protection under the Due Process clause and the Bill of Rights protections must all be enforced against the States under the Fourteenth Amendment according to the same standards that protect those personal rights against federal encroachment. The Court found that the right to bear and keep arms is fundamental to the nation’s scheme of orderly liberty and the Fourteenth Amendment’s Due Process Clause incorporates the Second Amendment right to keep and bear arms and makes such protection applicable to the States.

Fifth Circuit Court of Appeals

Lockett v. New Orleans City, __ F.3d ____ (5th Cir. May 5, 2010) Lockett was stopped for a traffic violation by two members of the National Guard Task Force assisting the New Orleans Police Department with law enforcement duties pursuant to an order issued by the Governor after Hurricane Katrina. During the stop, Lockett alleges that the military officers made racial slurs. Lockett requested that City police officers be called to the scene, which was done. Lockett was searched several times by different officers. Lockett was arrested for reckless driving but pled guilty to a non-moving violation, paid a fine, and the other charges were dismissed. Lockett filed suit against the two military officers and officials of the New Orleans Police Department asserting false arrest, excessive force, unreasonable conduct, conspiracy and a Section 1986 claim. The district court granted the Defendants’ motion to dismiss and summary judgment on the grounds of qualified immunity. The Fifth Circuit found that the military officers had probable cause to make the traffic stop based on Lockett’s speeding. Lockett’s argument that probable cause for a traffic stop is separate and distinct from probable cause necessary to affect an arrest when the initial probable cause for the traffic stop is insufficient for the arrest is misplaced. The Court found that if an officer has probable cause to believe that an individual has committed even a minor criminal offense in his presence, he may, without violating the Fourth Amendment, arrest the offender. The Court found that there was no false arrest and the officers were entitled to qualified immunity. As for Plaintiff’s excessive force claim that the handcuffs were too tight, the Court held that handcuffing too tightly, without more, does not amount to excessive force. As for Plaintiff’s claim that the multiple searches of his person constitutes excessive use of force, the Court found the Plaintiff did not allege an injury resulting for the pat-downs and his deposition testimony established that he was searched appropriately by the officers and thus, Plaintiff failed to establish a claim for excessive use of force with respect to the pat-downs. As for Plaintiff’s claim that the officers’ conduct was objectionably unreasonable because he was detained for an hour and was searched multiple times, the Court found the Plaintiff’s conduct contributed to the length of his detention. Plaintiff made multiple phone calls and requested the City police come to the scene and thus, the one hour detention is not unreasonable. As for Plaintiff’s claims of multiple searches, the Court found it was not clearly established that Defendants’ searches of Plaintiff was objectionably unreasonable under the facts surrounding the arrest. As for Plaintiff’s Section 1985 conspiracy claim that he was deprived of equal protection due to his race, the Court found no racial animus and the officers had probable cause to stop and arrest him. Finally, as for Plaintiff’s Section 1986 claim against the officers who stood by and did not do anything to prevent alleged wrongdoings, the Court found that since Plaintiff failed to establish a Section 1985 claim, Plaintiff cannot sustain a claim under Section 1986. Meza v. Livingston, ___ F.3d ____ (5th Cir. May 20, 2010) A parolee has a liberty interest in being free from sex offender registration and therapy and in order to impose such conditions, the State must provide due process. Meza, who had served time in prison for murder and parole violations, upon his release from prison in 2002 under mandatory supervision, had special conditions imposed on his mandatory supervision which included registering as a sex offender and attending sex therapy. Meza had never been convicted of a sex offense. Meza brings suit to enjoin state officials from imposing sex offender conditions without due process and asserted violations of his Fourteenth Amendment equal protection rights. The district court found that the procedural protections given to Meza by the Board were constitutionally insufficient and dismissed Meza’s remaining claims without prejudice. The Fifth Circuit found that the State of Texas’ procedure for providing due process to individuals who are not convicted of a sex offense in order to attach sex offender conditions to their parole or mandatory supervision did not meet the constitutional requirements for procedural due process. The Court found that the procedure was lacking in that 1) the parolee is not allowed to review the evidence against him so he is unable to correct any misinformation placed in his packet that the Board reviews; 2) by not allowing the parolee to appear before the Board, the Board must act without mitigating or clarifying evidence from the parolee; and 3) by not allowing the parolee to confront opposing witnesses, the parolee is unable to refute damning statements made against his interest and the Board is unable to evaluate the credibility of the parolee against that of opposing witnesses. The Court affirmed the district court’s conclusion as to the process the State must furnish Meza in all respects except that they did not agree that the State is required to provide Meza with counsel and vacated the district court’s order dismissing without prejudice Meza’s other claims and remanded those claims to the court for review. Terry v. Hubert ___ F.3d ____ (5th Cir. June 21, 2010) Terry was arrested and remained in detention for approximately seven months. No indictment was timely filed against him and he was never charged with the commission of a crime. Terry alleges that the warden violated his First Amendment right of access to the courts by denying him access to a law library, access to inmate counsel during his first three months of detention, access to competent inmate counsel thereafter and basic information concerning whom to contact about his detention. Terry alleged that the warden’s actions were objectionably unreasonable in light of his multiple requests for assistance. Terry further alleged that the warden violated his Fourth Amendment due process right to be free from unlawful incarceration because he was detained without charges. The district court denied the warden’s motion for summary judgment on qualified immunity. The Fifth Circuit held that right of access to the courts guarantees no particular methodology, but rather the conferral of a capability – the capability of bringing contemplated challenges to sentences or conditions of confinement before the courts. The Court held that Terry must demonstrate the alleged shortcomings in the library or legal assistant program that hindered him in his efforts to pursue a legal claim. The Court found that Terry had the ability to file a legally sufficient claim challenging his confinement and he knew what to write in order to make out a legally sufficient claim. The Court found that Terry’s allegations challenging the adequacy of inmate counsel and the warden’s response are immaterial because Terry was not prejudiced in his ability to file a legally sufficient claim. The Court found that the warden is entitled to qualified immunity because he did not violate Terry’s right of access to the courts. As for Terry’s due process claim that he was detained but never charged with a crime, the Court found that Terry was taken before a magistrate judge and bond was set on his charges so the warden could reasonably have concluded that Terry’s detention was pursuant to process. The Court found that it was not clearly established to a reasonable officer that a defendant who is promptly afforded counsel and a bond hearing but is then held beyond the deadline for formal indictment suffers a due process violation and the circumstances were unique due to the aftermath of Hurricane Katrina such that the Court found that the warden is entitled to qualified immunity on Terry’s due process claim. Morgan v. Swanson ___ F.3d ____ (5th Cir. June 30, 2010) Elementary school students have First Amendment rights. The First Amendment protects elementary school students from religious-viewpoint discrimination while at school. The Plano Independent School District allegedly prohibited students from passing out religious materials and items containing religious viewpoints and messages on school property. A lawsuit was filed against the School District and school officials alleging a violation of the First Amendment right of freedom of expression and religious speech. School officials filed a motion to dismiss the complaint based on qualified immunity. The Fifth Circuit found that the First Amendment freedom of speech protection extends to the distribution of non-curricular materials in public elementary schools. The Court found that the Constitution’s prohibition of viewpoint discrimination against religious speech in the elementary schools was clearly established at the time of the incident. The Court found that the school officials had fair warning that the suppression of student-to-student distribution of literature on the basis of religious viewpoint is unlawful under the First Amendment with respect to elementary school students and thus, the school officials were not entitled to qualified immunity. Comer v. Scott ___ F.3d ____ (5th Cir. July 2, 2010) Comer, the Texas Education Agency’s Director of Science Curriculum Division, received an email at work about a presentation critical of teaching creationism in public school and she responded that she would get out the word and forwarded the email to science teachers and leaders of science teacher organizations. The Texas Education Agency staff was directed not to advocate a particular position on [curriculum] issues under deliberation, or participate in any way that could compromise the agency’s ability to fairly and accurately implement the policy choices made by the Texas State Board of Education. Comer was terminated for violating the Texas Education Agency’s neutrality policy – a policy requiring staff to remain neutral and refrain from expressing any opinions on curriculum matters subject to the Texas State Board of Education jurisdiction. Comer filed suit asserting that her termination violated her due process rights and the Texas Education Agency’s neutrality policy violates the Establishment Clause because it has the effect of endorsing religion. The district court granted summary judgment for the Texas Education Agency. The Fifth Circuit found that Comers’ reliance on the Supreme Court decision in Edwards v. Aguillard was misplaced. In Edwards, the Court found that the purpose of the statute in question promotes religion and did not consider the other Lemon’s prongs. The U.S. Supreme Court in Lemon v. Kurtzman held that to survive an Establishment Clause challenge, the statute or policy (1) must have a secular legislative purpose; (2) its principal or primary effect must be one that neither advances nor inhibits religion; and (3) must not foster an excessive governmental entanglement with religion. Comer did not argue that purpose behind the neutrality policy was to promote religion but rather argued the policy’s principal and/or primary effect was to advance and/or endorse religion. The Fifth Circuit found no evidence that the neutrality policy has the primary effect of advancing religion. The policy requiring staff members not to comment on possible subjects to be included in the school curriculum does not primarily advance religion but rather serves to preserve Texas Education Agency’s administrative role in facilitating the curriculum review process for the Board of Education. The Court found that it would be hard to imagine circumstances in which a Texas Education Agency’s employee’s inability to publicly speak out for or against a potential subject for Texas curriculum would be construed or perceived as the State’s endorsement of a particular religion. The Court held that the Texas Education Agency’s neutrality policy does not violate the Establishment Clause.

Texas Supreme Court

Institutional Division of the Texas Department of Criminal Justice v. Powell, ___S.W.3d __ (Tex. Sup. Ct. July 2, 2010) Powell, an inmate, brought suit against the Texas Department of Criminal Justice and one of its officers complaining they deprived him of certain constitutional rights. Powell was disciplined and alleged the infraction brought against him was in retaliation for his family’s complaint about his alleged mistreatment at the facility. Powell’s complaint against the Department was that the administrative decision was not based on sufficient evidence and that his due process rights were violated when he was prevented from calling Officer Herrera as a witness. The trial court dismissed Powell’s claims but a divided court of appeals reversed. The Texas Supreme Court found that Powell dropped his constitutional complaint against the Department that his inability to present testimony from certain witnesses violated his right to due process and was now asserting that his constitutional claim against the Department is based on retaliation for his family members’ complaint about Powell’s alleged mistreatment. The Court found that because Powell abandoned his sufficiency of evidence and witness exclusion argument on appeal, his Petition stated no other constitutional claims against the Department and Powell cannot recast his claim as a retaliation claim, and the trial court correctly granted the Department’s plea to the jurisdiction. As for Powell’s retaliation claim against Officer Martinez based on his family member’s complaints about his treatment by prison officers, the Court found that Powell had failed to state a valid claim against Officer Martinez. The Court found that to prevail on a claim of retaliation, one must establish there was a retaliatory adverse action. The Court held that acts of retaliation that are de minimis do not satisfy the retaliatory adverse act requirement. One must allege adverse acts that would chill or silence a person of ordinary firmness from future First Amendment activities. The Court found that Powell failed to show that Officer Martinez’ actions “would chill or silence a person of ordinary firmness from future First Amendment activities.” While Powell was charged with a disciplinary infraction, the record contains no allegation or evidence of any punishment threatened or imposed for the alleged infraction. The Court found that Powell asserts only that disciplinary proceedings were instituted and without more, the Court is unable to conclude that Powell has alleged an adverse action that was more than de minimis and thus, his Section 1983 claim fails.

SUMMER 2010 NEWSLETTER SCHOOL LAW UPDATE

admin — Thu, 01 Jul 2010 12:09:18 +0000

by John D. Husted

United States Supreme Court

Christian Legal Society Chapter of the University of California, Hastings College of the Law v. Martinez, 130 S. Ct. 2971 (U.S. June 28, 2010) A law school’s policy requiring student groups to allow any student to participate, become a member, or seek leadership positions, regardless of her status or beliefs, in order to obtain a school-approved status and access to several benefits is a reasonable, viewpoint-neutral condition and does not transgress First Amendment limitations under the limited-public-forum analysis. The public law school extends official recognition to student groups through its “Registered Student Organization” (“RSO”) program. Groups that achieve this school-approved status receive several benefits, such as use of school funds and facilities. In exchange for recognition, RSOs must abide by the school’s nondiscrimination policy and mandate acceptance of all comers—allowing any student to participate, become a member, or seek leadership positions regardless of whether the student’s status or beliefs correspond to the group’s purpose. The school’s nondiscrimination policy bars discrimination on a number of bases, including sexual orientation and religion. The law school rejected the Christian Legal Society (“CLS”) student group’s application for RSO status on the ground that the group’s bylaws did not comply with the school’s open-access policy. The bylaws are interpreted to exclude anyone who engages in “unrepentant homosexual conduct” or who holds religious convictions different from those in the Statement of Faith that members are required to sign. CLS brought suit alleging that the school’s refusal to grant the group RSO status violated its First and Fourteenth Amendment rights to free speech, expressive association, and free exercise of religion. Applying the less restrictive limited-public-forum analysis, the Court held that the all-comers policy was a reasonable, viewpoint-neutral condition on access to the RSO forum, and therefore, did not violate the First Amendment.

Fifth Circuit

A.A. v. Needville ISD, 2010 U.S. App. LEXIS 14033 (5th Circuit July 9, 2010) A school district’s requirement that a Native American student wear his long hair in a bun on top of his head or in a braid tucked into his shirt offends a sincere religious belief, thereby violating the Texas Religious Freedom Restoration Act (“TRFRA”). A.A., a Native American, has a sincerely held religious belief in wearing his hair uncovered and visibly long. A.A. anticipated enrollment in the Needville ISD. Needville ISD’s dress code does not allow long hair, but after various efforts, the Board adopted an exception to permit A.A. to wear his hair long but in a bun on top of his head or in a braid tucked into his shirt. Upon starting kindergarten, A.A. wore his hair in two long braids and did not comply with the exemptions, so he was placed in in-school suspension. The family brought federal and state claims, including a TRFRA claim. TRFRA prevents any government agency in Texas from substantially burdening a person’s free exercise of religion unless it demonstrates that the application of the burden to the person is in furtherance of a compelling governmental interest; and is the least restrictive means of furthering that interest. After finding that A.A. and his parents met their burden of sincerity by demonstrating the honesty and accuracy of his contention that wearing his hair uncovered and visibly long is important to the free exercise of his religion, the Court found that the policy and proffered exemptions substantially burdened A.A.’s free exercise of that belief, because it impacted his religious expression to a significant and real degree. The Court acknowledged that the District’s interests in teaching hygiene, instilling discipline, preventing disruption, avoiding safety hazards, and asserting authority in the context of a public school may suffice for a rational basis scrutiny, but they do not meet the demanding compelling interest standard of TRFRA. Therefore, the District’s requirement is invalid under Texas law. Morgan v. Swanson ___ F.3d ____ (5th Cir. June 30, 2010) Elementary school students have First Amendment rights. The First Amendment protects elementary school students from religious-viewpoint discrimination while at school. The Plano Independent School District allegedly prohibited students from passing out religious materials and items containing religious viewpoints and messages on school property. A lawsuit was filed against the School District and school officials alleging a violation of the First Amendment right of freedom of expression and religious speech. School officials filed a motion to dismiss the complaint based on qualified immunity. The Fifth Circuit found that the First Amendment freedom of speech protection extends to the distribution of non-curricular materials in public elementary schools. The Court found that the Constitution’s prohibition of viewpoint discrimination against religious speech in the elementary schools was clearly established at the time of the incident. The Court found that the school officials had fair warning that the suppression of student-to-student distribution of literature on the basis of religious viewpoint is unlawful under the First Amendment with respect to elementary school students and thus, the school officials were not entitled to qualified immunity. R.H. v. Plano ISD, 607 F.3d 1003 (5th Cir. May 27, 2010) For tuition reimbursement for private pre-schooling under the Individuals with Disabilities Education Act (“IDEA”), removal to a private school is the exception, not the default. The IDEA ensures that children with disabilities have access to public education, requiring applicable school districts to implement procedures and policies to ensure that each disabled student receives a “free appropriate public education,” or “FAPE”. This is effected through an Individualized Education Plan (“IEP”) that is reasonably calculated to enable the child to receive educational benefits. An IEP should utilize the Least Restrictive Environment (“LRE”), and allow for the student to be “mainstreamed” to the maximum extent appropriate. R.H., qualified for IDEA services because of suspected autism and speech impairment, and an IEP through Plano ISD was agreed upon. R.H. was enrolled in a special education setting in Plano ISD’s Beaty Early Childhood School. Eventually, his parents expressed concern based on an alleged lack of “mainstreaming” for R.H. His parents later removed R.H. and enrolled him in a private preschool. R.H. argues that his placement at Beaty violated the IDEA and seeks tuition reimbursement for the private preschool. R.H. alleges, among other things, that Beaty was not the LRE for his education, and that Plano ISD took no steps to accommodate him in regular education. The Court found that R.H. was mainstreamed to the maximum extent appropriate. The Court found that Plano ISD had considered placing R.H. in a fully mainstreamed environment, but rejected that option, because his IEP could not be satisfactorily implemented in a Plano ISD regular classroom. The Court determined that Plano ISD was not required to begin with the presumption that it would place R.H. in the only mainstream placement available—a private preschool—because the IDEA was designed to ensure a free appropriate public education. Because R.H. did not show that his IEP was not reasonably calculated to enable him to receive educational benefits, his placement at Beaty was not inappropriate under IDEA, and he is therefore not entitled to tuition reimbursement.

Summer 2010 Newsletter - Successes, Victories and Other News

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OUR VISION

SUCCESS BASED ON LONG LASTING RELATIONSHIPS FORGED IN INTEGRITY, EXCELLENCE, COMMITMENT AND TEAMWORK. Fanning Harper Martinson Brandt & Kutchin, P.C. is pleased to provide you with our Summer 2010 Newsletter and Legal Update. Below you will find information regarding successes and activities of our attorneys. Please click the hyperlinks for updates regarding School Law, Civil Rights Law, Premises Liability, Commercial Trucking Litigation, Products Liability, Takings and Zoning Law, Insurance Law, and Employment Law. Please call us with your questions or comments.

VICTORIES AND HONORS

Victory Before The United States Supreme Court FHMBK attorneys Thomas P. Brandt and Joshua Skinner successfully represented, before the United States Supreme Court, two elementary school principals who were opposing a petition for writ of certiorari. Mr. Brandt and Mr. Skinner, working together with lawyers for Plano ISD, successfully opposed Plaintiff’s petition for writ of certiorari in this case involving freedom of religion in public schools. Morgan v. Plano Indep. Sch. Dist., Cause No. 09-1131. Pre-Trail Victories FHMBK attorneys Thomas P. Brandt and Joshua Skinner successfully represented a large city in the metroplex in a lawsuit filed against it by a sexually oriented business (S.O.B.). The Plaintiff, a topless bar, filed the lawsuit in order to challenge the City’s decision to revoke the bar’s S.O.B. license. The topless bar also challenged the constitutionality of the decision. FHMBK filed a motion for summary judgment and the district court dismissed the case. The cabaret appealed, but dismissed its appeal when it was unable to persuade either the district court or the court of appeals to stay the judgment. FHMBK attorneys Thomas P. Brandt and John F. Roehm, III successfully represented a municipality in a lawsuit based on the alleged diversion of rain and surface water onto the plaintiff’s property. FHMBK filed a plea to the jurisdiction on the grounds that governmental immunity had not been waived for Water Code violations or for property damage which did not arise from the operation or use of a motor-driven vehicle or motor-driven equipment and that the plaintiff failed to provide timely notice of the claim to the city. The court granted the plea to the jurisdiction and dismissed the case. FHMBK attorneys Thomas P. Brandt and Joshua Skinner successfully represented a community college district in an employment discrimination and retaliation case in the United States District Court for the Northern District of Texas. The plaintiff alleged national origin and religious discrimination as well as retaliation in violation of Title VII and the Texas Commission on Human Rights Act. FHMBK filed a motion for summary judgment and the district court granted the motion and dismissed the case. FHMBK attorneys Thomas P. Brandt and Joshua Skinner successfully represented two assistant district attorneys and a former assistant county attorney in a civil rights case brought against them based on actions during the criminal prosecution of the plaintiff. FHMBK filed a motion to dismiss and the plaintiff agreed to dismiss his claims. FHMBK attorneys Thomas P. Brandt and Joshua Skinner successfully represented a community college district in a race discrimination case brought by the father of a high school student who had been taking courses at the community college. The plaintiff alleged race discrimination as well as breach of contract. FHMBK filed a motion to dismiss and the plaintiff agreed to dismiss his claims.

Honors

Thomas P. Brandt spoke at a legal seminar at the Belo Mansion in Dallas on April 28, 2010. The seminar was entitled “Natural Law and the History of Conscience: Fundamentals and Current Applications.” Mr. Brandt presented his seminar paper entitled “Religious Liberty: Current Trends in Litigation.” Mr. Brandt also participated in a panel discussion on the topic “Natural Law and Its Modern Applications.” Joshua Skinner spoke at a State Bar legal seminar in Austin on May 28, 2010. The seminar was entitled “Bill of Rights.” Mr. Skinner presented his seminar paper entitled “Pre-Suit and Pre-Trial Discovery in Government Litigation.” The paper was co-authored by Mr. Skinner and John Husted of FHMBK. Joshua Skinner spoke at the State Bar Annual Meeting in Fort Worth on June 11, 2010. Mr. Skinner presented his seminar paper entitled “Lawsuits Against the Government” as part of the program sponsored by the Individual Rights and Responsibilities Section of the State Bar. The paper was co-authored by Mr. Skinner, Thomas P. Brandt and John Husted of FHMBK. Thomas P. Brandt participated in a legal seminar at the Belo Mansion in Dallas entitled “A review of Thomas More’s Trial.” Mr. Brandt participated in a dramatic reading of the trial of Sir Thomas More on July 1, 2010 – the 475th anniversary of Thomas More’s trial. Joshua Skinner spoke at a State Bar legal seminar in San Antonio on July 14, 2010. The seminar was entitled “Best Practices for Public Sector Lawyers.” Mr. Skinner presented his seminar paper entitled “Pre-Suit and Pre-Trial Discovery in Government Litigation.” The paper was co-authored by Mr. Skinner and John Husted of FHMBK. Thomas P. Brandt spoke at a State Bar Seminar in San Antonio on July 15, 2010. The seminar was entitled “Suing and Defending Governmental Entities.” Mr. Brandt presented his seminar paper entitled “Immunity for Public Officials.” The paper was co-authored by Mr. Brandt, Joshua Skinner and John Husted of FHMBK. Mr. Brandt also served on the planning committee for the seminar.

Government Defense Attorney/Constitutional Law Scholar David R. Upham Joins Fanning Harper Law Firm in Dallas

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DALLAS – Accomplished government defense attorney and constitutional law scholar David R. Upham is joining the Dallas law firm of Fanning Harper Martinson Brandt & Kutchin PC as of counsel. Mr. Upham is the latest addition to Fanning Harper’s experienced Local Government Defense practice, which is led by Fanning Harper Director Thomas Brandt. Mr. Upham’s focuses his practice on administrative adjudication, the defense of governmental entities, and constitutional litigation. “We’re proud that David has joined our team at Fanning Harper,” says Mr. Brandt. “His thorough understanding of constitutional law and American political thought will bolster our efforts to provide governmental clients with legal defense strategies that are second to none.” Mr. Upham also serves as an assistant professor of politics at the University of Dallas, where he teaches undergraduate and graduate courses in constitutional law, administrative law and American politics. He has delved deeply into constitutional history and has been published broadly on the topic. Mr. Upham provides extensive expertise in matters involving the 14th Amendment, which overturned the Dred Scott decision by defining African Americans as citizens of the United States. The 14th Amendment also guarantees U.S. citizens due process and equal protection under the law. After earning his Ph. D. in Politics from the University of Dallas, Mr. Upham graduated from the University of Texas School of Law, where he served as associate editor of the Texas Law Review. After earning his law degree, he worked for three years in the litigation section of a large international law firm. Fanning Harper is a Dallas-based law firm serving clients inside and outside the insurance industry with legal expertise in contract disputes, labor and employment, governmental entities, construction, business and commercial disputes, professional liability, premises liability, motor vehicle and trucking accidents, products liability, toxic tort, school issues, appellate law, arbitration, and estate planning. For more information, please visit http://www.fhmbk.com. For more information, please contact Mark Annick at 800-559-4534 or mark@androvett.com.

FALL 2010 NEWSLETTER SCHOOL LAW CASE LAW UPDATE

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by John Husted

Fulsom v. Mexia ISD, 2010 Tex. App. LEXIS 7757 (Tex. App. – Waco, September 22, 2010) The Texas Tort Claims Act does not waive a school district’s immunity from abuse of process, which is an intentional tort. Galveston ISD v. Clear Lake Rehabilitation Hospital, L.L.C., 2010 Tex. App. LEXIS 7708 (Tex. App. – Houston [14th Dist.] September 21, 2010. A school district does not waive governmental immunity by providing health insurance to school district employees, because doing so is not a proprietary function. After being admitted to the Hospital, a Galveston ISD (“GISD”) employee was informed by GISD that his medical coverage was cancelled for failure to pay his premiums. When the Hospital did not receive payment for the employee’s medical treatment, it demanded payment from GISD, and filed suit when the District rejected its demand. GISD filed a plea to the jurisdiction asserting governmental immunity, which the trial court denied. The 14th District Court reversed the trial court, concluding that providing health insurance to employees is a governmental function of a school district. Since the Texas Education Code requires school districts to offer medical coverage to all employees, it performs functions mandated by the state when it does so. That the District had a choice regarding how it provided such coverage does not mean its exercise of that choice was a non-governmental function. The court notes that providing group healthcare furthers the state’s educational goals because school districts are able to attract more-qualified employees.

FALL 2010 NEWSLETTER EMPLOYMENT LAW UPDATE

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by Francisco J. Valenzuela

Fifth Circuit

American International Specialty Lines Ins. Co. v. Rentech Steel LLC, 2010 U.S. App. LEXIS 19561 (September 21, 2010) An insurance policy’s exclusion of coverage for obligations incurred under workers’ compensation laws does not apply to claims arising out of the nonsubscribing employer’s own negligence. Rentech was sued when one of its employees received severe injuries while at work. Rentech was sued by the employee for negligence, gross negligence, and negligence per se. The jury found Rentech liable for negligence and negligence per se. American International Specialty Lines Insurance Company (“AISLIC”) filed a declaratory judgment action in federal court asserting that a coverage exclusion provision in its insurance policy with Rentech removed its obligation to defend or indemnify Rentech. Specifically, AISLIC argued that its policy excluded coverage for any “‘obligation of the Insured under…any workers’ compensation, disability benefits, or unemployment compensation law, or any similar law.’” The question before the court was whether an employee’s negligence suit against his employer that does not subscribe to the workers’ compensation system is an “obligation” under the Texas Workers’ Compensation Act (“TWCA”), which would be excluded under AISLIC’s policy exclusion. In a case of first impression, the Fifth Circuit stated that its purpose was to determine how the Texas Supreme Court would decide the case, a task complicated by the fact that the Texas Supreme Court has not squarely addressed this issue. The Fifth Circuit analyzed the statutory text, as well as prior Texas Supreme Court cases and decided that a negligence claim against a nonsubscriber is a common law claim, not a claim under the TWCA. The Fifth Circuit found further support in a U.S. Supreme Court opinion from 1919 and a Northern District of Texas opinion from 1993, while finding other cases to be unpersuasive. Jackson v. Watkins, 2010 U.S. App. LEXIS 19075 (5th Cir. September 13, 2010) A plaintiff asserting a Title VII claim must rebut each of a defendant employer’s legitimate, non-discriminatory reason to survive summary judgment, and statistical evidence is not sufficient to raise a genuine issue of material fact in the absence of evidence tailored to rebut the specific legitimate, non-discriminatory reasons proffered by the defendant. Jackson, a Caucasian, was a seventeen year prosecutor with the Dallas County District Attorney’s office. When Craig Watkins, an African American, was elected District Attorney, he terminated Jackson and initially replaced him with an African American. Jackson sued claiming race discrimination. Watkins asserted four alleged legitimate, non-discriminatory reasons for terminating Jackson: (1) Watkins wanted to bring a “new image” and sense of purpose to the District Attorney’s Office after the “fake drug scandal” which occurred under the previous administration; (2) Watkins did not believe that he could trust Jackson to follow his policies and practices; (3) Watkins’ experience with Jackson was “overwhelmingly negative”; and (4) Jackson’s reputation within the District Attorney’s Office and in the courts was that Jackson was “disrespectful, unnecessarily confrontational, and uncooperative.” The district court granted summary judgment because it found that Jackson failed to address the four proffered reasons, and that his evidence was insufficient to rebut two of the proffered reasons. Jackson appealed, arguing (1) that he did not have to rebut each proffered reason and (2) that he did provide evidence to do so. In regards to his first argument, the Fifth Circuit re-stated its clear precedent requiring a rebuttal of each proffered legitimate, non-discriminatory reason offered by a defendant. If a plaintiff is unable to do so, summary judgment is appropriate. In regards to Jackson’s assertion that he presented statistical evidence of discrimination, the Fifth Circuit found that the district court considered the statistical evidence to be unreliable, but that, assuming that it was reliable, the evidence was not sufficient to raise a genuine issue of material fact “in the absence of evidence tailored to rebut Watkins’s specific reason of terminating Jackson – negative personal interactions.” Importantly, the Fifth Circuit noted in a footnote that it was not addressing the “difficult question” as to whether a “desire to create a ‘new image’ could ever be a legitimate, nondiscriminatory reason for termination.” Songer v. Dillon Resources, Inc., 2010 U.S. App. LEXIS 18642 (5th Cir. September 3, 2010) A staffing leasing company that provides employees for a motor carrier and operates as a joint employer with that carrier is subject to the jurisdiction of the Secretary of Transportation. Truck drivers are employed in positions affecting the operational safety of motor vehicles. The plaintiff truck drivers could have reasonably been expected to drive interstate routes consistent with their job duties. For all of these reasons, the plaintiffs’ fall under the Motor Carrier Act (“MCA”) exemption to the Fair Labor Standards Act (“FLSA”), which does not entitle the plaintiffs to overtime under the FLSA. Plaintiffs were truck drivers assigned to work for trucking companies by Dillon Resources, Inc., a staffing leasing company who hired the drivers. Under the leasing agreements, Dillon and the trucking companies are joint employers of the drivers. Plaintiffs sued Dillon and their trucking company employers for failure to pay overtime pursuant to the FLSA. Defendants asserted that the MCA exemption to the FLSA applied and that they were not required to pay overtime. In order for the MCA to apply, (1) an employee must be employed by a carrier subject to the jurisdiction of the Secretary of Transportation, and (2) an employee must be engaged in activities that directly affect operational safety of motor vehicles in the transport of property in interstate commerce. As to the first element, it was undisputed that the trucking companies who employed Plaintiffs were under the Secretary’s jurisdiction, and the Fifth Circuit held that “a staff leasing company who provides employees for a motor carrier and operates as a joint employer with the carrier meets” the regulatory requirements to be considered a carrier under the jurisdiction of the Secretary. In regards to the second required element, it was undisputed that Plaintiff were truck drivers subject to Department of Transportation requirements and were employed in positions affecting the operational safety of motor vehicles. In this case, there was evidence that the drivers’ continuing duties were to accept assignments to, from, and within Texas and would be fired if they refused to do so, fitting within the regulatory definition of a driver. In other words, the Plaintiffs “could reasonably have been expected to drive in interstate commerce consistent with their job duties.”

Supreme Court of Texas

City of Elsa, Texas v. Gonzalez, 2010 Tex. LEXIS 693 (Tex. October 1, 2010) At the direction of a council member, the city administrator distributed the city attorney’s letter containing the attorney’s opinion that the mayor had ipso facto resigned from being mayor upon the assumption of a position with a county urban program and discussing the mooting of any potential conflicts of interest, to the county judge, the director of the urban county program, the district attorney, and a local newspaper. The city administrator also reported to each of listed persons that the city council had accepted the resignation. These reports did not constitute a good faith violation of law under the Texas Whistleblower Act (“TWA”). Moreover, informing the city council that its meeting violated the Texas Open Meetings Act (“TOMA”) did not satisfy the TWA’s requirement to report a violation of law to an appropriate law enforcement authority. Tony Barco, mayor of the City of Elsa, assumed the position of assistant director of the Hidalgo County Urban County Program (“HCUCP”). The city’s attorney prepared a letter explaining that under the common law and the Texas Constitution, Barco had ipso facto resigned his position as mayor with his assumption of this duties with the HCUCP and that the resignation mooted any potential conflicts of interest. The city council voted to accept Barco’s resignation. One of the city council members directed city administrator Joel Gonzalez to notify county authorities and the public about the results of the council meeting. Gonzalez delivered copies of the attorney’s letter to the county judge, the director of the urban county program, the district attorney, and a local newspaper and also told each of them that the council had accepted Barco’s resignation. On July 14, 2003, notice was posted for a council meeting to be held on July 17, 2003 at which Gonzalez’s employment status was the only item to be considered. The type-written notice mistakenly stated that the meeting would be held on “Tuesday the 17th day of July 2003” instead of “Thursday the 17th day of July…” Two days prior to the meeting the word “Tuesday” was crossed out and the word “Thursday” was added. At the meeting, Gonzalez objected to the meeting on the grounds that it would be illegal because TOMA requires 72-hours notice of a meeting. The council moved forward and terminated Gonzalez for “No confidence to administer the City as a result of the City’s financial conditions.” Gonzalez sued the City under the TWA, claiming that he was being terminated for reporting violations of law. Gonzalez’s testimony, however, was clear that at the time when he circulated the attorney’s letter and informed others about the council’s acceptance of Barco’s resignation, he did not think that Barco had violated any laws. Any considerations as to whether Barco would have violated laws in the future had he not resigned, do not satisfy the requirement that the report under the TWA be of existing or past violations of law. In regards to his objections to the city council about their holding a meeting in alleged violation of TOMA, the Court held that the council is not an appropriate law enforcement authority. The Court specifically found that the council’s being required to comply with TOMA did not equate to the council’s having authority to “regulate under or enforce” TOMA provisions as to itself. The Court noted that the TWA’s “limited definition of a law enforcement authority does not include an entity whose power is not shown to extend beyond its ability to comply with a law by acting or refusing to act or by preventing a violation of law by acting or refusing to act.” Finally, the Court found that, in the absence of other evidence, Gonzalez’s belief that the council had authority to postpone its meeting or otherwise prevent a TOMA violation from occurring did not satisfy the objective or subjective components of a good faith belief that the council was an appropriate law enforcement authority under the TWA.

Texas Court of Appeals

Flores v. City of Liberty, Texas, 318 S.W.3d 551 (Tex. App. – Beaumont August 5, 2010, no pet. h.) A police officer who reported the killing of a cat by a fellow police officer did not have a reasonable good faith belief that the killing was a violation of law, based on his training, experience, and responsibilities, sufficient to satisfy the requirements of the Texas Whistleblower Act. Beginning in February of 2006 and continuing throughout the remainder of the year, Flores was accused of multiple infractions by his employer. On or about November 2, 2006, Plaintiff Hugo Flores, a police officer, reported that Officer Pearson had committed animal cruelty by killing a cat. On December 11, 2006, Flores was terminated. The Court of Appeals, however, held that there was no evidence that he reported a violation of law by another city official. The Court of Appeals noted that while Flores may have had a subjective belief that the killing of the cat was a violation of law, the Court of Appeals ultimately found that the belief was not reasonable for an officer who possessed Flores’ training, experience, and responsibilities. The Court of Appeals specifically noted that there was no evidence that Flores witnessed the killing or that he knew the details of the killing. In fact, once an investigation was conducted, it was established that no crime had been committed. Lueck v. State, 2010 Tex. App. LEXIS 5557 (Tex. App. – Austin July 16, 2010, no pet.) A court lacks subject matter jurisdiction over claims under the Texas Commission on Human Rights Act when a plaintiff failed to file a charge of discrimination with the Texas Workforce Commission within 180 days of the allegedly discriminatory act. George Lueck was terminated from the Texas Department of Transportation on November 12, 2003. On June 21, 2005, Lueck filed his first complaint of sex discrimination, claiming that the discrimination was “ongoing” and that TXDOT terminated him and refuses to re-hire or compensate him. In their plea to the jurisdiction, TXDOT presented evidence that Lueck did apply for four different jobs in July and August of 2004, TXDOT’s policy that jobs are filled within 60 days of the job’s closing date, and that the job postings to which Lueck applied expired no later than October 2, 2004. October 2nd was more than 180 days before he filed his charge of discrimination. Lueck’s attorney admitted that Lueck had not complied with the 180 day requirement. Lueck argued that the 180 day requirement was not jurisdictional, but only a requirement that is subject to estoppel and equitable tolling. The Court of Appeals held that the 180 day requirement under the TCHRA is jurisdictional based on both the statutory text and legal precedent from both the Texas Supreme Court and lower appellate courts.

FALL 2010 NEWSLETTER TAKINGS AND ZONING CASE LAW UPDATE

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by John Husted

Supreme Court of Texas

Kirby Lake Development Ltd. V. Clear Lake City Water Authority, 2010 Tex. LEXIS 613 (Tex. August 27, 2010) An inverse condemnation suit is barred when the State withholds property or money from an entity while acting within a color of right under a contract, as opposed to exercising its eminent domain powers. Residential Developers entered into a contract with the Water Authority stipulating that the Developers would build water and sewer facilities according to the Authority’s specifications, and that the Developers would lease the facilities to the Authority free of charge until the Authority purchased them. The Authority agreed to reimburse the Developers for part of their construction costs once it received voter-approved bond funds, but the Authority was not obligated to pay the Developers until the bond sale was approved by election. When the voters rejected the bond election to pay the developers as stipulated by the contract, the developers brought suit alleging, in addition to breach-based claims, that the Authority’s continued possession of the facilities constituted a taking. The Developer’s inverse condemnation suit was barred, because the Developers consented to any alleged taking when they agreed to allow the Authority to lease and use the Facilities free of charge until the Authority purchased the facilities. The Authority was acting within a color of right under the contract and not under its eminent domain powers. State of Texas v. Brownlow, 2010 Tex. LEXIS 615 (Tex. August 27, 2010) The State’s easement to build and maintain a mitigation pond on a landowner’s property does not, alone, grant the State a right to remove and use the excavated dirt from the landowner’s property for other purposes, and doing so provides a basis for a constitutional takings claim. The State obtained an easement to construct a mitigation pond on the Brownlow’s property to collect water that would result from a highway expansion project. The State built the pond, and used most of the excavated dirt for highway construction purposes in another location. The Brownlows sued the State for inverse condemnation as to the dirt that was removed. Because the easement did not grant the State the right to use the excavated dirt for highway construction or any other purposes, and because the Brownlow’s suit stated a constitutional takings claim, the State does not have sovereign immunity from the suit.

Texas District Courts

Rio Bravo Subdivision Property Owners Association v. City of Brownsville, 2010 Tex. LEXIS 8130 (Tex. App. – Corpus Christi - Edinburg, October 7, 2010) In the context of a recently annexed area’s petition for disannexation, a municipality is not required to provide any new or additional services to the annexed area beyond those required by the Texas Local Government Code, even though the area already received the statutorily required services prior to the annexation. The property owners association of a recently annexed subdivision submitted a petition for disannexation pursuant to the procedures provided by the Texas Local Government Code. The petition was based on an alleged failure by the City to provide services to the annexed area. Though the petitioners stipulated that the City provided certain municipal services after the annexation and that the City provided every type of municipal service that it was legally allowed to provide, the property owners alleged that the City acted in bad faith by failing to provide any additional or new services that the subdivision did not already receive prior to the annexation. Because nothing in the plain language of the applicable disannexation statute indicates that a municipality must provide new or additional services to an annexed area, the petitioner’s argument was meritless.

FALL 2010 NEWSLETTER PRODUCTS LIABILITY LAW UPDATE

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by Rocky Little

Fresh Coat, Inc. v. K-2, Inc., 53 Tex. Supp. J. 1046, Supreme Court of Texas, August 20, 2010. This indemnity case concerns product liability litigation in the residential construction industry. K-2, Inc. manufactures synthetic stucco components that are collectively referred to as “EIFS,” an acronym for exterior insulation and finishing system. Fresh Coat, Inc. is an EIFS installer that contracted with a home builder, Life Forms, Inc., to install EIFS on the exterior walls of many homes that Life Forms was building. The installer, Fresh Coat, purchased K-2’s EIFS and installed it with the help of K-2’s instructions and training. More than 90 homeowners sued the EIFS’ manufacturer, K-2, the installer, Fresh Coat, and the home builder, Life Forms, alleging that the EIFS allowed water penetration that in turn caused structural damage, termite problems, and mold. The Supreme Court examined whether a synthetic stucco manufacturer has a duty to indemnify a contractor under Chapter 82 of the Texas Civil Practice & Remedies Code. In order to make that assessment, the court had to determine whether synthetic stucco is a “product” pursuant to the statute, and whether the contractor that installs it on a house is a “seller.” Chapter 82’s text does not limit “product” to exclude items that may later become part of a house wall. Also, a “seller” under Chapter 82 may include those who sell both products and services, so that a person who contracts to both provide and install a single product may be considered a “seller” of that product. Therefore, the court held that Chapter 82 applies, and that the EIFS’ manufacturer owed a duty to indemnify the installer. Cressman Tubular Prods. Corp. v. Kurt Wiseman Oil & Gas, Ltd., No. 14-08-01039-CV (Tex. App. – Houston, September 23, 2010). This oil well case brought by Kurt Wiseman was based on multiple theories of liability asserted against four Defendants for damages caused by the sale of products for use in an oil well. The jury found one of the Defendants to be 99% liable for the Plaintiff’s damages, and that Defendant filed for bankruptcy protection. The trial court then severed those claims from this case and entered a judgment requiring that all of the Plaintiff’s damages and attorney’s fees be paid by the Defendant that the jury found to be 1% responsible. The court held that the breach of implied warranty is a tort claim and, therefore, proportionate responsibility applies. However, the breach of an express warranty is a contract claim to which proportionate responsibility does not apply. Therefore, the Defendant that breached an express warranty was liable for Plaintiff’s full amount of damages of $548,187 and attorney’s fees of $219,274, notwithstanding that its proportionate responsibility applicable to the tort/implied warranty claims was only 1%. Georgia Pacific v. Bostic, No. 05-08-01390-CV, (Tex. App. – Dallas, August 26, 2010). This wrongful death claim against Georgia Pacific was brought by the heirs and estate of Timothy Bostic, whose death was caused by exposure to asbestos. Georgia Pacific’s product upon which the claim was based is a joint compound, sometimes called “drywall mud.” The court found that Mr. Bostic was exposed to Georgia Pacific’s asbestos-containing joint compound. However, the court also found that there was no evidence of the quantitative exposure (dose) of asbestos fibers from Georgia Pacific’s joint compound, and that there was no evidence of the minimum exposure level necessary to lead to an increased risk of development of mesothelioma. Therefore, the Plaintiff failed to prove “substantial factor causation,” that Defendant’s product was a cause in fact of the harm. Moreover, the appellate court held that there was legally insufficient evidence of causation to support the jury’s verdict against Georgia Pacific.

FALL 2010 NEWSLETTER CONSTITUTIONAL/CIVIL RIGHTS LAW UPDATE

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John F. Roehm III

Fifth Circuit Court of AppealsFifth Circuit Court of Appeals

Xcaliber International Limited, LLC v. Attorney General State of Louisiana, ____ F. 3d ____ (5th Cir. July 20, 2010) A Louisiana statute requiring tobacco manufactures to deposit funds in escrow in order to sale cigarettes in the state does not violate the U.S. Constitution. Xcaliber, a manufacturer and seller of discount cigarettes, challenges an amendment to the Louisiana law implementing the tobacco settlement between the largest manufacturers of cigarettes and the State of Louisiana. The amendment was an Escrow Statute requiring escrow payments by tobacco manufacturers. Xcaliber sought to prevent the enforcement of the amendment by alleging the amendment violates the Equal Protection and Due Process Clauses of the U.S. Constitution and is preempted by the Sherman Act. The district court granted summary judgment for the State of Louisiana and Xcaliber appeals to the Fifth Circuit. The Court found that the amendment did not violate the Sherman Act. The Court held that Xcaliber’s equal protection challenge to the amendment will be subject to rational-basis review rather than heightened scrutiny. The Court held that a statute is only subject to heightened scrutiny on an equal protection challenge if it “proceeds along suspect lines [or] infringes fundamental constitutional rights” and the amendment did neither. The Court held under rational-basis review, the amendment “must be upheld against an equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification.” The Court found that Louisiana articulated several reasons for passing the tobacco settlement legislation and explained why the amendment is important to furthering the goals of the tobacco settlement and thus, the amendment does not violate the Equal Protection Clause under rational-basis review. Xcaliber asserted that the amendment violated the Due Process Clause because a deprivation based on a future, hypothetical finding of judicial liability is an adjudicative deprivation that requires pre-deprivation process directed at determining whether the liability actually exists and the amendment does not provide any pre-deprivation process. The Court found that the escrow deposits are legislative preconditions for the privilege of engaging in future cigarette sales in Louisiana and since the amendment is legislative in character, not adjudicative, no further process is required and no due process violation. Sonnier v. Crain, ____ F. 3d ____ (5th Cir. July 27, 2010) This case deals with the interest of a University to preserve its property for educational purposes and a person’s First Amendment right of free speech. Sonnier and others entered the campus of Southeastern Louisiana University (“SLU”) to express a religious message to students. Sonnier did not seek a permit as required by SLU’s speech policy before conducting this activity. Sonnier was told he could not speak on campus that day since he had not applied seven days in advance. Sonnier filed suit against the University alleging the speech policy violated his First Amendment right to free speech under 42 USC §1983. Sonnier brought both a facial and as-applied challenge to the speech policy. Sonnier challenged the following provisions of the speech policy:

The seven day notice requirement;
The two hour, once per week limitation;
The collection of personal information;
The security fee requirement; and
The limitation of speech to three specific locations.

Sonnier filed a motion for preliminary injunction retraining enforcement of the speech policy. The district court denied the motion for preliminary injunction on the grounds that Sonnier had not established a facial challenge to the policy. Sonnier appeals to the Fifth Circuit. The Court limited its review to the district court’s denial of the preliminary injunction on facial challenge grounds and reserving the right of Sonnier to present evidence on his as-applied challenge at his permanent injunction hearing. The Court found that “a facial challenge ... is, of course, the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exist under which the act would be invalid.” The Court held that in order to succeed in a facial challenge, a plaintiff must establish the regulation would be invalid in all circumstances. The Court found that Sonnier was unable to establish that the seven day notice requirement, the two hour once per week limitation, the collection of personal information and the limitation of speech to three specific locations on campus would be under no circumstances necessary. The Court found that the University has a significant interest in preserving its property for educational purpose and limiting where outside speakers may assemble or demonstrate and the speech policy is narrowly tailored to that purpose. The Court found no authority that requires a public university to throw open its entire campus for public assemblies or demonstrations. The Court found that the security fee provision of the policy was unconstitutional because the University had the sole discretion in determining both the need for, and the strength of the security at a public assembly or demonstration and assessing the cost of additional security on the sponsoring individual or organization. The policy was further deficient in that it had no objective factors directing how to establish the amount of the security fee and thus, the University had unbridled discretion which is unconstitutional. Zarnow v. City of Wichita Falls, Texas, ____F. 3d ____ (5th Cir. August 9, 2010) The police obtained a search warrant to search Zarnow’s home after the discovery of a gun, boxes of shells, blasting caps, ammunition, and fuses in his office. During the search of Zarnow’s home, the police seized items which were not covered by the search warrant. The police justified their seizure under the “plain view” doctrine. Zarnow filed suit against the City, Police Chief and officers for violations of the Second, Fourth, Fifth, Sixth, and Fourteenth Amendments under 42 USC §1983. The district court granted summary judgment for the City and individual defendants and Zarnow appeals to the Fifth Circuit. The Court found that the City had impliedly delegated its policymaking authority to the Police Chief but Zarnow failed to establish the existence of a custom or policy which resulted in a constitutional violation. The Court found that Zarnow presented no evidence of a pattern of unconstitutional conduct. Zarnow argued that the City and Police Chief ratified the officers’ unconstitutional conduct because they defended the officers’ actions. The Court found that good faith statements made in defending complaints against municipal employees do not demonstrate ratification. Zarnow argued that the Police Chief may have incurred liability on behalf of the City by failing to supervise his subordinates during the search. The Court found that a supervisory official is liable if he demonstrates deliberate indifference to a plaintiff’s constitution protected rights. The Court found that there was no deliberate indifference by the Police Chief in that he shared the same errant view of the “plain view” doctrine as his officers. The Court held that negligence misinformation is insufficient to establish supervisory liability and unintentionally negligent oversight does not satisfy the deliberate indifference standard. The Court did not consider Zarnow’s argument that a single incident of unconstitutional conduct by a policymaker may impute liability to the City on the grounds that Zarnow raised this issue for the first time on appeal and had not alleged in the district court that the Police Chief personally committed such a violation. As to Zarnow’s contention that the City had a policy of inadequate training of its police officers, the only evidence presented by Zarnow was that the officers expressed an unlawful interpretation of the “plain view” doctrine. The Court found that in order for liability to attach on an inadequate training claim, a plaintiff must allege with specificity how a particular training program is defective. The Court found that Zarnow presented no evidence that the City’s training practices are inadequate and the district court’s judgment was affirmed. S & M Brands, Inc. v. Caldwell, ____ F. 3d _______ (5th Cir. August 10, 2010) Louisiana’s settlement agreement with tobacco manufactures and the enactment of statutes to implement the terms of the settlement do not violate the U.S. Constitution. Plaintiffs, a cigarette manufacturer, a cigarette dealer and a smoker, who did not join in the Master Settlement Agreement (“MSA”) relating to tobacco manufacturers, filed suit against the Louisiana Attorney General seeking to invalidate the MSA and the Louisiana Escrow Statute on the grounds they are unconstitutional because they violated the Compact Clause, the First Amendment, and Commerce Clause, and the Due Process Clause. The parties filed motions for summary judgment and the district court granted judgment for the Attorney General. Plaintiffs appeal to the Fifth Circuit. The Court noted that they recently decided a case, Xcaliber International Limited, LLC v. Caldwell, where many of the same challenges being raised by the Plaintiffs to the MSA and Escrow Statutes were made in that case. The Court found that the MSA did not interfere with federal supremacy or increase state’s power over the federal government and thus, did not violate the Compact Clause. As to Plaintiffs’ argument that the MSA and the Louisiana Escrow Statute violate the Commerce Clause and the Due Process Clause because they create extraterritorial price increases, the Court found that the MSA and the Louisiana Escrow Statute only allows Louisiana to regulate and collect escrow payments based on the sale of cigarettes within Louisiana’s jurisdiction and thus, there is no violation of Due Process or Commerce Clause. As for Plaintiffs’ First Amendment claims, the Court found that Plaintiffs’ First Amendment rights have not been abridged or deprived by the MSA because Plaintiffs are not a party to the MSA and they were not coerced to join the MSA and thus, are not subject to its speech restrictions. The Court found that the Louisiana Escrow Statute does not in any way compel or abridge speech and thus, there is no First Amendment violation. Cao v. Federal Election Commission, ____ F. 3d _____ (5th Cir. September 10, 2010) This case deals with the interplay between congressional campaign finance reform and the fundamental right to free speech under the First Amendment. Plaintiffs, a U.S. Representative and the Republican National Committee, challenge the statutory provisions of the Federal Election Campaign Act relating to campaign contributions and expenditures. Plaintiffs asserted eight constitutional challenges and the district court certified four questions and dismissed the remaining four challenges as frivolous. Plaintiffs appeal to the Fifth Circuit. The Court found that many of the Plaintiffs’ constitutional challenges raise questions which have been previously addressed by the U.S. Supreme Court. The U.S. Supreme Court has recognized there are different levels of constitutional scrutiny for contributions and expenditure limits. The Supreme Court has distinguished independent expenditures from those expenditures that are prearranged or coordinated with a particular candidate. The Supreme Court has found that “prearranged or coordinated expenditures” are constitutionally equivalent to contributions and would be subjected to the same limitations and scrutiny that applies to contributions. The Court found that the $5,000 contribution limitation on political parties and political action committees is constitutional. The Court found that the fact the $5000 contribution limit is not adjusted for inflation is not unconstitutional because the contribution level is not so “suspiciously low” which would warrant some type of adjustment. The Court further found that it is the legislature, not the courts, which possess the particular expertise in determining whether limits on contributions are necessary. The Court found that Congress could regulate coordinated expenditures as contributions because of the sufficiently important governmental interests in preventing the potential for political corruption by circumvention of the campaign finance laws. The Court found that independent expenditures cannot be regulated or limited but the expenditures in this case are not independent expenditures. The Court found that the provisions in the Federal Election Campaign Act constitute a constitutionally permissible regulation of political parties’ campaign contributions and coordinated expenditures and do not infringe upon the rights of the Plaintiffs to engage in political debate and discussion.

FALL 2010 NEWSLETTER LOCAL GOVERNMENT CASE LAW UPDATE

admin — Thu, 21 Oct 2010 15:38:11 +0000

by Joshua Skinner

Texas Supreme Court

Colquitt v. Brazoria County, 2010 Tex. LEXIS 691 (Tex. 2010) The Texas Tort Claims Act requires that a governmental entity obtain notice of a claim against it within six months of the incident giving rise to the claim. Such notice generally must be a formal, written notice that must reasonably describe the damage or injury claimed, the time and place of the incident and the incident. Actual notice, however, is also sufficient. In Colquitt, the Supreme Court held that service of a lawsuit within the six month period constitutes proper notice under the Act. Tex. Dep’t of Crim. Justice v. McBride, 317 S.W.3d 731 (Tex. 2010) A governmental entity does not waiver governmental immunity by conduct when it requests attorney’s fees and costs as part of its defense of a lawsuit. McBride brought suit against the Texas Department of Criminal Justice. In the TDCJ’s answer, it denied the allegations and requested attorney’s fees and costs incurred in defending the case. Other than the fees and costs, the TDCJ asserted no claims for relief. McBride asserted that the request for fees waived governmental immunity and the court of appeals agreed. The Supreme Court reversed, holding that the TDCJ’s request for attorney’s fees and costs associated with defending the case did not constitute a waiver of governmental immunity by conduct.

Texas Courts of Appeals

City of Balch Springs v. Austin, 315 S.W.3d 219 (Tex. App. – Dallas 2010, no pet.) An off-duty police officer driving a City police vehicle in furtherance of his employment as a security officer for a private employer is not within the course and scope of his employment for purposes of the waiver of immunity in the Texas Tort Claims Act, despite City policy that states that officers are “on-duty” twenty-four hours a day while within the City. Purifoy, a police officer with the City of Balch Springs, was off-duty from his position with the City and had clocked in for his position as a security officer for Walmart. City policy permitted officers to use City police vehicles during private security work in order to assist in deterring crime. After clocking in at Walmart, Purifoy had driven to the City to get an available police vehicle and was driving back to Walmart when he was involved in a vehicular accident with Jimmy Wayne Hall, who died. Austin brought suit on behalf of Hall’s estate against the City. The City filed a plea to the jurisdiction, which the trial court denied. The City appealed. Austin argued that Purifoy was in the course and scope of his employment because the City had a policy that all officers were “on-duty” twenty-four hours a day while within the City. The court of appeals granted governmental immunity, holding that it is well-established that merely because an employee is on-duty or on-call twenty-four hours a day does not mean that the person is always acting within the scope of his employment. Since Purifoy was acting pursuant to his private employment at the time of the accident, the City’s governmental immunity was not waived. The fact that Purifoy was driving a City vehicle does not change the analysis because the City had not required Purifoy to use the vehicle and he had chosen to use it in furtherance of his private employment. City of Richardson v. Gordon, 316 S.W.3d 758 (Tex. App. – Dallas 2010, no pet.) A plaintiff is not entitled to recovery of attorney’s fees against a governmental entity in a case seeking declaratory and injunctive relief where the entity amended its charter and mooted the alleged violation of the charter. The City of Richardson had a charter provision requiring that all City Council meetings be held in open session. The Texas Open Meetings Act does not permit a City Council to meet in closed session if there is a charter provision requiring open meetings. Gordon brought suit seeking declaratory relief, injunctive relief and attorney’s fees. The City amended its charter so as to permit closed meetings in accordance with state law. The trial court denied the City’s plea to the jurisdiction and the City appealed. The court of appeals reversed the decision of the trial court and rendered judgment for the City, holding that the charter amendment mooted the controversy and, since the plaintiff could not succeed on his claims, he was not entitled to attorney’s fees. Dallas Area Rapid Transit v. Oncor Elec. Delivery Co., 2010 Tex. App. LEXIS 5994 (Tex. App. – Dallas 2010, no pet.) Governmental entities are entitled to governmental immunity from condemnation proceedings, unless immunity is otherwise explicitly waived. Derouen v. Falls County Sheriff Dep’t, 2010 Tex. App. LEXIS 7271 (Tex. App. – Waco 2010, no pet.) A plaintiff cannot circumvent the intentional tort exception to the waiver of immunity in the Texas Tort Claims Act by couching the claim in terms of negligence. DeRouen alleged that police officers “negligently” applied handcuffs to her, causing injury. However, DeRouen also alleged that the officers had applied the handcuffs “negligently” in order to “teach her a lesson.” While there is a waiver of immunity under the Texas Tort Claims Act for the negligent use of tangible personal property, there is no waiver of immunity for intentional torts. The court held that DeRouen’s deposition testimony established an intentional tort and held that there was no waiver of immunity. First-Citizens Bank & Trust Co. v. Greater Austin Area Telecommunications Network, 318 S.W.3d 560 (Tex. App. – Austin 2010, no pet.) The waiver of governmental immunity for certain contract claims permits an assignee of rights under a contract to bring suit against the governmental entity in the place of the signatory to the agreement. First-Citizens Bank brought suit against the Greater Austin Area Telecommunications Network and Austin Independent School District as assignee under a contract between the governmental entities and Complete Communication Services. The trial court dismissed the case, holding that the limited waiver of immunity for breach of contract claims does not apply to claims brought by an assignee. The court of appeals reversed, holding that governmental immunity was waived as to the claim, not as to a specific party bringing the claim. Fulsom v. Mexia Indep. Sch. Dist., 2010 Tex. App. LEXIS 7757 (Tex. App. – Waco 2010, no pet. h.) Governmental immunity is not waived for the tort of abuse of process because it is an intentional tort. After filing a lawsuit against various entities and individuals, Fulsom was issued a criminal trespass warning by Mexia Independent School District, which prohibited Fulsom from entering on Mexia ISD property. Fulsom amended his petition and sued Mexia ISD for abuse of process. Mexia ISD filed a plea to the jurisdiction, asserting governmental immunity. The plea was granted by the trial court and upheld by the court of appeals. Galveston Indep. Sch. Dist. v. Clear Lake Rehabilitation Hospital, 2010 Tex. App. LEXIS 7708 (Tex. App. – Houston [14th Dist.] 2010, no pet. h.) The provision of medical coverage to employees by an independent school district is a governmental function for which the school district is entitled to governmental immunity, absent a statutory waiver of governmental immunity. The waiver of governmental immunity for breach of contract claims found in Local Government Code § 271.152 applies to claims by third-party beneficiaries. The burden of proving that a party is not a third-party beneficiary rests with the governmental entity in a plea to the jurisdiction. Urroz, an employee with Galveston Independent School District, was placed on sick-leave and received medical treatment at Clear Lake Rehabilitation Hospital. Before Urroz began treatment at Clear Lake, however, his medical coverage was cancelled for failure to pay premiums. Despite cancellation of coverage, the third-party administrator for the medical coverage told Clear Lake that Urroz was covered. Galveston ISD denied Clear Lake’s demand for payment and Clear Lake sued Urroz, Galveston ISD and the third-party administrator. Galveston ISD filed a plea to the jurisdiction, which was denied by the trial court. Galveston ISD took an interlocutory appeal. Galveston ISD argued that the provision of medical coverage to employees is a governmental, not proprietary, function, for which Galveston ISD is entitled to governmental immunity. Galveston ISD also argued that the waiver of governmental immunity for contracts found in Local Government Code § 271.152 does not apply because Clear Lake had not provided evidence that it was a third-party beneficiary under a written contract between Galveston ISD and Urroz. The court of appeals held that the provision of medical coverage by a public school district is a governmental function, but that the burden of proof in regard to the terms of the contract lay with Galveston ISD, not Clear Lake. The parties assumed that the waiver of immunity permits claims by third-party beneficiaries and the court of appeals indicated agreement with their assumption. Hoppenstein Prop. v. McLennan County Appraisal Dist., 2010 Tex. App. LEXIS 6771 (Tex. App. – Waco 2010, no pet.) A commercial lease to a governmental entity does not fall within the limited waiver of governmental immunity for contracts, despite provisions of the lease requiring the landowner to remodel the facility being leased. Hudson v. City of Houston, 2010 Tex. App. LEXIS 6607 (Tex. App. – Houston [1st Dist.] 2010, no pet.) A municipality’s act of providing a defense and indemnity to its employees for liability claims through self-insurance is a proprietary function, for which the municipality is not entitled to governmental immunity. Hudson brought suit against the City of Houston on behalf of Green, an assignee, alleging that the City failed to defend and indemnify Green in a tort lawsuit and asserting a Stowers claim. The City argued that it was entitled to governmental immunity and that Green had not properly sent notice of the suit so as to invoke the obligation to provide coverage. The court of appeals concluded that the provision of defense and indemnity to its employees for liability claims is a proprietary function, not a governmental function, and, hence, the City was not entitled to governmental immunity. However, the court of appeals affirmed dismissal of the City because Green had not properly sent notice to the City of the suit. Note: Hudson would appear to conflict with Potter County v. Tuckness, 308 S.W.3d 425 (Tex. App. – Amarillo 2010, no pet.), which held that there was no waiver of governmental immunity for a breach of contract claim based on the entity’s denial of coverage for medical benefits. McFadden v. Sanchez, 2010 Tex. App. LEXIS 6806 (Tex. App. – Austin 2010, no pet.) A Rule 11 agreement among the parties restricting the defendants dispositive motions to the issues that had already been asserted barred the defendants from raising the derivative immunity defense in Section 101.106(a) of the Texas Tort Claims Act because it had not been asserted before the agreement. In addition, on-duty police officers engaged in maintenance of the peace are acting in the course and scope of their employment, despite engaging in arguably illegal conduct. McFadden brought suit against various police officers alleging various tort claims, including malicious prosecution. The defendants filed a motion for summary judgment and plea to the jurisdiction. The parties then entered into a Rule 11 agreement limiting the defendants to the issues raised in the dispositive pleadings already on file. The defendants subsequently amended their dispositive motions and attempted to add new arguments, including the defense of Section 101.106(a) (i.e., that the plaintiff had previously brought suit against their employer as to the same subject matter). The court of appeals held that the Rule 11 agreement barred the defendants’ reliance on Section 101.106(a). As to defendants’ argument that Section 101.106(f) barred McFadden’s claim, the court of appeals held that it was properly presented in the original dispositive pleadings, but that the defendants were not entitled to dismissal. While the court rejected the plaintiff’s argument that the officers were not acting in the course and scope of their employment, the court also held that the claim could not have been brought against their employer because it is an intentional tort. Note: There is currently a split among the courts of appeals on the question of whether Section 101.106(f) requires that the suit could have been brought against the employer (i.e., governmental immunity would be waived) or merely that the suit is brought as a tort claim. As noted in McFadden, Illoh v. Carroll, 2010 Tex. App. LEXIS 6290 (Tex. App. – Houston [14th Dist.] 2010, pet. filed), and Menefee v. Medlen, 2010 Tex. App. LEXIS 4892 (Tex. App. – Fort Worth 2010, no pet.), a majority of courts have held that Section 101.106(f) requires that the suit could have been brought against the employer. M.T.D. Envir., LLP v. City of Midland, 315 S.W.3d 606 (Tex. App. – Eastland 2010, pet. filed) A provision of a contract between a contractor and a municipality that requires the contractor to release of all claims that might arise under the contract is void as to a claim for payment of an invoice for services rendered pursuant to the Payment for Goods and Services Act (Prompt Payment Act). M.T.D. Environmental, L.L.P. entered into a contract with the City of Midland to provide services to grind and haul yard waste materials. A dispute arose between M.T.D. and the City regarding the amount of work done and M.T.D. brought suit. The City filed a motion for summary judgment, asserting that, pursuant to the terms of the contract, M.T.D. had waived all claims for breach of contract. M.T.D. argued that the Payment for Goods and Services Act (Prompt Payment Act), Texas Government Code §§ 2251.001 et seq., renders the release void as to claims for payment of an invoice for work performed. Section 2251.004 specifically states that a person may not waive any right or remedy provided by the Prompt Payment Act and that any purported waiver is void. The trial court granted summary judgment, but the court of appeals, accepting M.T.D.’s argument, reversed and remanded for further proceedings. Multi-County Water Supply Corp. v. City of Hamilton, 2010 Tex. App. LEXIS 7144 (Tex. App. – Houston 2010, no pet.) There is no waiver of governmental immunity as to an alleged breach of a contract for a municipality to provide treated water at a contractually determined rate. Multi-County Water Supply Corporation entered into a long-term contract with the City of Hamilton to purchase treated water from the City. After the City closed its water treatment facility and began contracting to purchase water from the Upper Leon River Municipal Water District, the City raised its rates. Multi-County brought suit to enjoin the City’s higher charges for treated water. The City filed a plea to the jurisdiction, which the trial court sustained. Multi-County appealed. The court of appeals affirmed, holding that there was no waiver of governmental immunity for Multi-County’s breach of contract claim. Old S. Amusements, Inc. v. City of San Antonio, 2010 Tex. App. LEXIS 5450 (Tex. App. – San Antonio 2010, no pet.) A municipality is entitled to governmental immunity from a conversion claim where it seized and sold gaming machines pursuant to the governmental function of police protection. Quarterman v. Hampton, 2010 Tex. App. LEXIS 7378 (Tex. App. – Houston [1st Dist.] 2010, no pet.) Section 101.106(e) of the Texas Tort Claims Act, which permits a governmental entity to move for dismissal of its employees if both the entity and employees are sued in a lawsuit under the Act, does not apply when a plaintiff brings the suit against the employees in their individual and official capacities, but does not name the entity as a defendant. An inmate sued employees of the Texas Department of Criminal Justice (TDCJ) in their individual and official capacities alleging tort causes of action. The TDCJ, on behalf of the employees in their official capacities, filed a motion to dismiss the employees in their individual capacities pursuant to Section 101.106(e) of the Texas Tort Claims Act. The trial court denied the motion and the court of appeals affirmed. While the court of appeals acknowledged that there is precedent indicating that a suit against a public official in his official capacity is the same as a suit against the entity, the court concluded that official capacity suits were not equivalent to suits against the entity for purposes of Section 101.106. Since Section 101.106(e) states that an entity may move to dismiss its employees if both are served, a suit against the employees in their individual and official capacities, but not against the entity, does not implicate Section 101.106(e). Smallwood v. State of Texas, 2010 Tex. App. LEXIS 7260 (Tex. App. – Waco 2010, no pet. h.) There was no waiver of governmental immunity as to claim brought by inmate when he severed his thumb and some fingers on a metal cutting machine at the prison, but no government employee was involved and the machine did not lack an integral safety component. Smallwood and another inmate were operating a metal cutting machine when the activated blade severed his thumb and some fingers. Smallwood brought suit against the Texas Department of Criminal Justice (TDCJ) alleging that his injury arose from a condition or use of tangible personal property because (1) the machine was defective, as safety devices had been removed; and (2) TDCJ employees misused the machine as the machine was improperly installed and inmates were improperly trained and supervised. TDCJ filed a plea to the jurisdiction, which was granted by the trial court. Smallwood appealed. The court of appeals affirmed. Noting that Smallwood and the other inmate were the only individuals using the machine at the time of the accident, the court held that in governmental immunity was only waived if a public official provided property lacking an integral safety component that led to the plaintiff’s injuries. The evidence presented demonstrated that the machine included safety features and the court held that TDCJ’s failure to provide better safety devices and warnings does not establish that the machine was defective for lack of an integral safety component. Hence, there was no waiver of governmental immunity. In addition, there was no waiver of immunity as to Smallwood’s negligent supervision or training allegation. Smith v. Galveston County, 2010 Tex. App. LEXIS 8168 (Tex. App. – Houston [1st Dist.] 2010, no pet. h.) The Texas Tort Claims Act does not waive governmental immunity for discretionary functions. Installation of a safety feature that was not part of the original design of a building is not a maintenance (ministerial) activity; it is a discretionary activity and governmental immunity is not waived. Tex. Parks & Wildlife Dep’t v. Garland, 313 S.W.3d 920 (Tex. App. – Tyler 2010, no pet.) The Texas Tort Claims Act does not apply to a claim based on an act or a failure to act of an individual who is an officer or employee of a state agency or of a political subdivision other than a county if the act or failure to act is in connection with a community service program or work program. Texas Code of Criminal Procedure article 42.20(b), which provides this exemption from the Tort Claims Act, is not unconstitutional. Garland fell off a truck operated by a state employee while Garland was performing community service at Tyler State Park. Garland asserted that article 42.20(b) did not apply because driving was a ministerial function and, alternatively, that article 42.20(b) was unconstitutional. The court of appeals rejected both arguments, holding that there are no limitations on the types of actions covered by article 42.20(b) so long as they were in connection with a community service program or work program and that article 42.20(b) is not unconstitutional because it is rationally related to a legitimate state interest. Univ. of Tex. Health Science Ctr. at San Antonio v. Webber-Eells, 2010 Tex. App. LEXIS 4957 (Tex. App. – San Antonio 2010, no pet.) Section 101.106(f) of the Texas Tort Claims Act gives a plaintiff who has sued a public official thirty days from the date the official files a motion to dismiss to decide whether to continue with the suit against the official or substitute the official with the public entity employer. Failure to replead in compliance with Section 101.106(f) is not excused by substantial compliance nor by the trial court’s failure to rule on whether Section 101.106(f) even applies. A plaintiff must make a decision as to whether to replead within the thirty days and cannot wait for the benefit of a judicial decision on the question of whether the claim could have been brought against the governmental entity. Webber-Eells brought suit in federal court against Dr. Sirinek alleging negligent medical treatment. Sirinek filed a motion to dismiss pursuant to Section 101.106(f) of the Texas Tort Claims Act. Section 101.106(f) states that if the public official was acting within the course and scope of his or her employment and the lawsuit could have been brought against the governmental entity, then the plaintiff has thirty days from the date of a motion to dismiss to dismiss the official and add the entity as the defendant or the claim against the official will be dismissed. Webber-Eells responded to the motion to dismiss by asserting that the lawsuit could not have been brought against the entity – University of Texas Health Science Center. However, since the district court did not rule on the motion within the period of thirty days, Webber-Eells filed an amended complaint conditionally asserting a claim against UTHSC. The district court dismissed the claim against Sirinek pursuant to Section 101.106(f) and the claim against UTHSC pursuant to the Eleventh Amendment, because it had to be brought in state court. Webber-Eells re-filed in state court against UTHSC. UTHSC filed a motion to dismiss, asserting that Webber-Eells failed to comply with Section 101.106(f) in federal court because she did not dismiss her claims against Sirinek when she added UTHSC as a defendant. Webber-Eells defended her strategy by claiming that she substantially complied with Section 101.106(f). The court of appeals rejected Webber-Eells argument, holding that Section 101.106(f) requires strict compliance with its terms and that it was irrelevant that the district court had not ruled on Sirinek’s motion to dismiss.

FALL 2010 NEWSLETTER AND LEGAL UPDATE VICTORIES, HONORS AND OTHER NEWS

admin — Thu, 21 Oct 2010 15:54:26 +0000

Fanning Harper Martinson Brandt & Kutchin, P.C. is pleased to provide you with our Fall 2010 Newsletter and Legal Update. Below you will find information regarding successes and activities of our attorneys. Please click the hyperlinks for updates regarding Local Government Law, Constitutional/Civil Rights Law, Products Liability, Takings and Zoning, Employment Law, and School Law . If you would like additional information regarding these updates, please contact the writers at 214-369-1300. If you want to be removed from our mailing list, contact Sara Goode at sgoode@fhmbk.com

VICTORIES AND HONORS

Victory Before The United States Court of Appeals FHMBK attorneys Thomas P. Brandt and Joshua Skinner successfully represented three officials of Midland Independent School District in an appeal before the United States Court of Appeals for the Fifth Circuit in a case involving allegations of a racially hostile work environment. The appellate court agreed that three of the officials were entitled to qualified immunity. The court held that the alleged actions were less severe than a variety of actions the court previously deemed insufficient to create a hostile work environment. The victory not only made clear that the individual defendants should be dismissed, but also made clear that the remaining claim of hostile work environment against the school district was insufficient to state a claim. McKee v. Lang et al, No. 09-50951. Trial Victories FHMBK attorney Rocky Little successfully defended a tow truck/wrecker service company that was sued for negligence, conversion, implied bailment, and violations of the DTPA. The Plaintiff, a trucking company, sought to recover about $80,000, of which about $30,000 was for attorney fees. Following a two-day trial in Abilene, Taylor County, Texas, and based on the jury’s verdict, the parties entered into an Agreed Judgment for $16,000, of which, $14,000 was for Plaintiff’s recovery of attorney fees. In other words, excluding reasonable attorney fees, the recovery of which are mandated by statute, the Plaintiff recovered $2000 for claimed property damages of more than $50,000. FHMBK attorney Rocky Little successfully defended a Dallas area manufacturer in a construction defect lawsuit filed in Johnson County. The plaintiff building owner was seeking three million dollars in damages from the manufacturer. The jury attributed 100 per cent of the fault for the construction defects to the negligence of the building owner and awarded no money damages to the manufacturer. Since August 23, 2010, Marc Fanning has presented, argued and won five motions for summary judgment involving slip and fall type claims on behalf of a prominent grocery store chain operating twenty-five stores in the North Texas area. Don Martinson and Leslie Echols Pitts secured the dismissal of plaintiff’s state law claims in a federal copyright and trademark infringement case filed in the Northern District of Texas, arguing that the same were preempted under Federal law. Barry Fanning and Gerald Lotzer were successful in obtaining a summary judgment in a Dallas County District Court in favor of a defendant HVAC manufacturer in a lawsuit filed against it by a plaintiff who was paralyzed from the waist down as a result of a fall from a used ladder sold by the HVAC manufacturer to a relative of the plaintiff. The plaintiff unsuccessfully argued for an expansion of existing tort law applicable to sellers of used products. The case is now on appeal to the Dallas Court of Appeals.

Honors

FHMBK is pleased to announce that David R. Upham has joined the firm as “of counsel.” FHMBK is please to announce that Thomas P. Brandt was recently featured on a Television News report regarding the issue of the search and seizure of cell phones in public schools. To find out more about these attorneys, or more about our firm, please visit our website at www.fhmbk.com

Texas Lawyer Features High Profile Case Involving FHMBK Attorney

admin — Thu, 22 Apr 2010 15:56:39 +0000

SUMMER 2010 NEWSLETTER EMPLOYMENT LAW UPDATE

admin — Thu, 01 Jul 2010 12:02:20 +0000

by Francisco J. Valenzuela

Supreme Court of the United States

Granite Rock Co. v. International Brotherhood of Teamsters, 2010 U.S. LEXIS 5255 (June 24, 2010) A question as to the formation date of a collective bargaining agreement (“CBA”) requires judicial resolution, and not arbitration, when the answer to this question determines whether the parties consented to arbitrate issues that may arise. Granite Rock and a local union operated under a CBA between 1999 and April 2004. On June 9, 2004, union members initiated a strike. On July 2, 2004, Granite Rock and the local union agreed on a new CBA which contained a no-strike clause but that did not address union members’ liability for strike-related damages incurred by Granite Rock between April 2004 and July 2, 2004. The union did not have a back-to-work or hold-harmless agreement when it voted to ratify the CBA on July 2, 2004. The IBT urged the local union to not return to work without a back-to-work or hold-harmless agreement in place. Granite Rock indicated that any further refusal to work would be considered a breach of the new CBA’s no-strike provision. On July 9th, Granite Rock sued IBT and the local union for injunctive relief and strike related damages, among its claims was a tort claim under § 301(a) of the Labor Management Relations Act. The local union asserted numerous arguments including that the issue as to the date of the CBA’s formation should be arbitrated instead of being decided by the court and that a federal tort claim could not be asserted under § 301. The district court found that the formation date issue was one for judicial resolution, not arbitration, and that there is no federal tort claim that can be asserted under § 301. The Ninth Circuit affirmed that no tort claim lies under § 301, but reversed the district court’s decision that the formation question was one to be decided judicially. The Supreme Court held that the formation question is one for judicial resolution, not arbitration, for two main reasons. First, the Court held that the formation date question at issue required judicial resolution “because it relates to Local’s arbitration demand in such a way that the District Court was required to decide the CBA’s ratification date in order to determine whether the parties consented to arbitrate the matters” “arising under” the CBA. Second, the formation issue was proper for judicial determination because it did not fall within the scope of the arbitration clause. Additionally, the Supreme Court affirmed that a tort claim under § 301 does not exist. Rent-A-Center, West, Inc. v. Jackson, 2010 U.S. LEXIS 4981 (May 21, 2010) A court may decide whether an arbitration clause is unconscionable even if the arbitration agreement expressly assigns that decision to an arbitrator. On February 1, 2007, Jackson filed a 42 U.S.C. § 1981 claim against Rent-A-Center (“RAC”). RAC filed a motion to dismiss or to stay the case and to compel arbitration pursuant to the arbitration agreement Jackson signed as a condition of employment. Jackson countered that the agreement was unenforceable because it was unconscionable. The arbitration agreement expressly stated that all employment related claims and all claims that the agreement was void or voidable (i.e. including claims of unconscionability) would go to arbitration. The Supreme Court restated the fundamental premise that arbitration is a matter of contract and an arbitration agreement is on an equal footing with other types of contracts. The Court went on to reason that an arbitration clause is severable from the rest of a contract and that a challenge to the entire contract does not prohibit a court from enforcing a specific agreement to arbitrate. For this reason, if a party challenges the specific clause requiring arbitration, a court can consider the challenge prior to ordering arbitration of the remaining issues to be decided under a contract. In this case, because Jackson challenged the unconscionability of the entire contract, the entire contract was subject to arbitration. New Process Steel, L.P. v. National Labor Relations Board, 2010 U.S. LEXIS 4973 (June 17, 2010) The National Labor Relations Board lacked the statutory authority to issue approximately 600 decisions during a 27-month period because the Board did not have a quorum. Towards the end of 2007, the Board consisted of four (4) members and one (1) vacant position. Two more vacancies were set to occur due to the end of the recess appointment periods for two of the members. On December 20, 2007, the Board delegated to three (3) of its members all of the Board’s power, reasoning that this would allow the two members who would make-up the group as of January 1, 2008 authority to exercise the Board’s powers because the two (2) remaining members would constitute a quorum of the three (3) member group. In its analysis, the Court noted that the Taft-Hartley Act amended the National Labor Relations Act (“NLRA”) by increasing the number of Board members required for a quorum from two (2) to three (3), and that it allowed the Board to delegate its authority to groups of at least three (3) of the Board’s members. Two (2) members of the group receiving the delegation would constitute a quorum of that group. The question for the Court was whether the two (2) members who had received the delegated powers from the Board could continue to act for the Board since the third member who was originally included in their group was no longer on the Board and the original three-member group ceased to exist. The Court held that the NLRA’s language requires that the delegee group maintain a membership of at least three (3) members in order for the delegation to remain valid, not that the delegee group simply had to have three (3) members at the precise time of the delegation. The Court noted that its reading of the statute harmonizes and gives meaningful effect to all of the provisions in § 3(b), is the most natural reading of the text, and is consistent with the longstanding practice of the Board. The Court noted that the delegee group’s quorum requirement of two (2) members simply defines the number of members who must participate in a decision, and that the vacancy provision determines the authority to act.

Fifth Circuit

StarTran, Inc. v. Occupational Safety and Health Review Commission, 2010 U.S. App. LEXIS 11652 (June 8, 2010) An entity whose board members are appointed and removable by a public official, whose principal executives are at will employees hired, removed, or transferred by the same public official, that possesses no assets save its employees, that has no substantial existence apart from the public entity that created it, and that has no relationship with any other parties except for the public entity that created it and a labor union is a “political subdivision” under the Occupational Safety and Health Act (the “Act”) and its regulations and is, therefore, exempt from the Act. The determination as to whether an entity is a political subdivision consists of a two-part test: any entity (1) directly created by the state, so as to be a department or administrative arm of the state, or (2) administered by persons who are controlled by public officials and responsible to them or to the public are political subdivisions. StarTran relied on the second alternative test, asserting that it was not a political subdivision, and the Fifth Circuit agreed. The Fifth Circuit noted that Capital Metro, a political subdivision of the State of Texas, created StarTran under the Texas NonProfit Corporation Act to qualify for federal assistance by having collective bargaining agreements, while not violating the prohibition of § 617.002 of the Texas Government Code against political subdivisions entering collective bargaining agreements. The Fifth Circuit discussed various characteristics that, on the whole, tended to indicate that StarTran was a political subdivision, but it appears to be ultimately convinced that StarTran is a political subdivision under the second alternative test because StarTran’s Board and executives serve at the will of Capital Metro, Star Tran is wholly funded by Capital Metro, and the StarTran executives report to the Capital Metro CEO and consider him to be their boss. Gagnon v. United Technisource Inc., 2010 U.S. App. LEXIS 10880 (5th Cir. May 27, 2010) The Fair Labor Standards Act requires that non-exempt employees working more than forty hours per week receive overtime payment of one and a half times their regular rate of pay, which includes “all payments which the parties have agreed shall be received regularly during the workweek,” unaffected by any contractual designation as to how certain pay shall be called. When a per diem varies with the number of hours worked, the per diem payments are part of the regular rate of pay. Gagnon entered an employment contract with his employer (“UTI”) to work for $5.50 per hour for “straight time”, a “per diem” amount of $12.50 per hour for every hour worked up to forty hours up to $500, and $20.00 per hour for overtime. Later, when UTI announced a raise in pay for its employees, Gagnon’s straight pay was unaffected, but one dollar per hour was added to both the per diem and the overtime pay. The Court found that UTI attempted to avoid paying Gagnon a higher regular rate by designating some of his pay as being per diem payments. The Court held that the per diem amount should have been considered in determining overtime pay due to Gagnon.

Supreme Court of Texas

Univ. of Tex. at El Paso v. Herrera, 2010 Tex. LEXIS 479 (July 2, 2010) The U.S. Congress invalidly abrogated Texas’ sovereign immunity under the FMLA’s self care provision and, therefore, no private causes of action may be asserted against Texas under the FMLA’s self care provision. Moreover, language in UTEP’s policy handbook did not constitute a waiver of sovereign immunity. Federal legislation abrogates a state’s immunity if the abrogation is unequivocally expressed and if Congress acts pursuant to a constitutional provision allowing it power to abrogate. In regard to the FMLA’s self care provision, it is undisputed that Congress sought to abrogate state immunity, what was at issue is whether it had the authority to do so. The main source for abrogation authority derives from § 5 of the 14th Amendment. If federal legislation reaches beyond the scope of § 1 of the 14th Amendment guarantees that § 5 was intended to enforce, then the legislation can validly abrogate immunity when it is “an appropriate remedy for identified constitutional violations, not an attempt to substantively redefine the States’ legal obligations” (internal citations omitted). In order to validly abrogate sovereign immunity, § 5 legislation must (1) counter identified constitutional injuries by states and (2) exhibit congruence and proportionality between the injury sought to be prevented and the means of prevention. The Supreme Court held that the first prong was determinative of the case because nothing showed that Congress was thinking about gender discrimination (the prohibition of which is one of the stated purposes of the FMLA) by the states when it passed the FMLA’s self care provision. In other words, there is no evidence that Congress sought to remedy unconstitutional gender discrimination through the FMLA’s self care provision, and nothing tying sex-role stereotyping by the states as employers. The Court also held that UTEP’s policy manual’s numerous mentions of the FMLA and an employee’s ability to bring civil actions did not even remotely constitute voluntary or a clear and unambiguous consent to suit. This is assuming, arguendo, that UTEP (as opposed to the state legislature) could waive its immunity. Waffle House, Inc. v. Williams, 2010 Tex. LEXIS 416 (Tex. June 11, 2010) A plaintiff may not recover negligence damages against her employer for harassment covered by the TCHRA because the TCHRA is a specific, tailored anti-harassment remedy that preempts a negligence claim when the alleged negligence is entwined with the alleged harassment. Williams was a Waffle House waitress for about seven months. During that time, she was allegedly the victim of sexual harassment by a male cook. Her harassment complaints appeared to go largely unheeded by Waffle House supervisors. After leaving Waffle House, Williams sued Waffle House and the cook, alleging sexual harassment under the TCHRA and common law battery by the cook, as well as a negligent supervision and retention claim against Waffle House. The Supreme Court held that Williams’ negligent supervision and retention claim should fail as a matter of law because the TCHRA is the exclusive remedy for employment-based sexual harassment. The Supreme Court found that Williams’ negligence claim against Waffle House was based on the same conduct underlying her TCHRA claim. Allowing Williams to recover on her tort claim would collide with the “elaborately crafted statutory scheme…that, incorporates a legislative attempt to balance various interests and concerns of employees and employers.” For example, the Court noted that, among the differences between a TCHRA claim and a negligence claim, the TCHRA claim requires the exhaustion of administrative remedies; a complaint under the THCRA must be asserted 180 days of the wrongful conduct and suit filed within two years of the date the administrative claim is first asserted; the substantive elements of the respective claims are different, possibly allowing a finding of negligence for conduct that would not be considered sexual harassment under the TCHRA or allow employers to enjoy the benefit of affirmative defenses for their corrective actions; and the unique nature of the TCHRA remedies. The Supreme Court stated that circumvention by plaintiffs of the specific framework of TCHRA claims and defenses should not be circumvented by simply asserting negligence claims against an employer. The Court noted that the reasonableness of Waffle House’s response to the alleged harassment is already part of the TCHRA analysis.

Texas Courts of Appeals

Mission Consolidated Indep. Sch. Dist. V. Garcia, 2010 Tex. App. LEXIS 3954 (Tex. App. – Corpus Christi—Edinburg May 27, 2010, no pet.) In order for a plaintiff to properly invoke the TCHRA’s limited waiver of governmental immunity, a plaintiff must have shown a prima facie case of discrimination or retaliation under the Texas Labor Code, and a court’s subject matter jurisdiction will be defeated if the defendant can “conclusively negate” any element of the plaintiff’s prima facie case of discrimination under the TCHRA. Garcia filed suit against Mission Consolidated Independent School District (the “School District”) and its superintendent alleging violations of the TCHRA and various common law claims. After an interlocutory appeal decided by the Texas Supreme Court, on remand to the county court, the School District filed a plea to the jurisdiction raising, among other argument that Garcia failed to present evidence to raise a fact issue in response to the School District’s plea based on the “absence of jurisdictional facts.” In an opinion on the School District’s motion for rehearing, the Court of Appeals held that the county court should have looked to whether the School District conclusively negated any one of the prima facie elements Garcia was required to establish to determine if it (the court) had subject matter jurisdiction over the claims against the School District under the limited waiver of governmental immunity under the TCHRA. Additionally, it should also be noted that the Court of Appeals held that the Labor Code’s § 21.254 sixty-day deadline to file suit after receipt of a right-to-sue letter is mandatory, but not jurisdictional. El Paso Indep. Sch. Dist, v. Alspini, 2010 Tex. App. LEXIS 3741 (Tex. App. – El Paso May 19, 2010, no pet.) An oral agreement to delay service of process “is insufficient as a matter of law to show diligence of any kind in seeking or accomplishing timely service.” On or about March 16th and May 11th, 2004 Alspini filed complaints with the TWC alleging employment discrimination and retaliation. On June 3, 2005, Alspini filed suit asserting discrimination and retaliation claims under the Texas Labor Code. Before service of the lawsuit was accomplished, the parties’ counsel entered into settlement negotiations. Counsel for the school district contacted Alspini’s lawyer to state that a resolution might be reached prior to, but not after, service of process was accomplished. Negotiations continued through early 2006, and in May of 2006, it became apparent to Alspini’s lawyer that a settlement would not be reached; service was accomplished on August 22, 2006. Unbeknownst to Alspini’s lawyer, the court had dismissed the lawsuit five months earlier, though the School District filed an Answer and a plea to the jurisdiction after receiving August 22nd service. At a hearing on November 20, 2006, the court acknowledged that there was no indication that notice had been provided to Alspini or his lawyer or that the clerk had provided notice of the dismissal to either party, and indicated to Alspini’s lawyer that the case could be reinstated through a bill of review. The court then stated that it had lost jurisdiction and signed an order granting the School District’s plea to the jurisdiction. On October 25, 2007, with a different lawyer, Alspini filed his original petition for bill of review. The citation was issued on the following day and service was accomplished on November 7, 2007. The Court of Appeals noted that § 21.256 of the Labor Code establishes a two-year statute of limitations period from the date of the complaint of the wrongful conduct. When a case is filed within the limitations period, but service is not accomplished during the limitations period, the date of service will relate back to the date of filing if the plaintiff was diligent in accomplishing service. This determination can be a matter of law if “no valid excuse for delay exists or if the plaintiff’s actions, or inaction, and the lapse of time negate diligence.” Diligence is determined by whether the plaintiff acted as an ordinary, prudent person would act in those circumstances, and whether the plaintiff was diligent until the defendant was actually served. An agreement between counsel or parties delaying a plaintiff from accomplishing service must meet the requirements of Rule 11. If those requirements are not met, any agreement between counsel is unenforceable. In this case, the delay in service resulted from a “gentleman’s agreement” between counsel to engage in settlement negotiations. Because this oral agreement was not in writing, signed, and filed as part of the record, nor made in open court and entered of record, it did not meet the requirements of Rule 11, and was thus unenforceable. The Court of Appeals found that, as a mater of law, an unenforceable oral agreement to delay service is insufficient to show diligence in the accomplishing of service.

Don D. Martinson Argues In Re Universal Underwriters before Texas Supreme Court

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Texas Insurance Case Has Broad Implications for Insurers and Consumers Fanning Harper’s Don D. Martinson argues In Re Universal Underwriters before Texas Supreme Court AUSTIN, Texas – A case currently pending before the Supreme Court of Texas could dramatically change the Texas insurance market, says attorney Don D. Martinson, counsel to Universal Underwriters of Texas Insurance Company, one of the parties in the case. Mr. Martinson, a name partner in Dallas-based Fanning Harper Martinson Brandt & Kutchin P.C., argued the case, In re Universal Underwriters of Texas Insurance Company, No. 10-0238, on Wednesday, December 8, 2010, before the state’s highest appellate court. Mr. Martinson says he is hopeful the Supreme Court will stand by its previous decisions to uphold insurance company appraisal clauses. “The Supreme Court of Texas has been a proponent of using appraisal as a tool to resolve first party insurance contract disputes,” Mr. Martinson says. “The enforcement of the appraisal clause is important to the property insurers, which makes it, by extension, important to Texas businesses and property owners.” In re Universal Underwriters reached the Supreme Court from Texas’ 2nd Court of Appeals in Fort Worth. The case was originally heard in Tarrant County’s 141st District Court. Grubbs Infiniti Ltd., a Euless-based car dealership, sued Universal Underwriters over what it claimed was an insufficient payment for hail damage to the dealership’s roof. Universal contended the lawsuit should not go forward until Grubbs first submitted to an appraisal of the amount of loss caused by the hail damage. Grubbs contends that Universal Underwriters unreasonably delayed invoking the appraisal clause, and waived its contractual right to do so. The case has implications beyond the two parties, Mr. Martinson says. “The purpose of appraisal provisions is to resolve disputes such as this one quickly and efficiently,” he says. “If the Supreme Court lessens the burden of proof for establishing waiver of this contractual right to appraisal set forth in its previous decisions, litigation costs will increase for insurers as well as for insureds whose businesses are the lifeblood of the Texas economy.” Fanning Harper is a Dallas-based law firm serving clients inside and outside the insurance industry with legal expertise in areas including contract disputes, labor and employment, governmental entities, construction, business and commercial disputes, professional liability, premises liability, motor vehicle and trucking accidents, products liability, toxic tort, school issues, appellate law, arbitration, and estate planning. To view the video of Mr. Martinson’s appearance before the Supreme Court of Texas, click this link.

Winter 2011 Newsletter and Legal Update

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Our vision:

SUCCESS BASED ON LONG LASTING RELATIONSHIPS FORGED IN INTEGRITY, EXCELLENCE, COMMITMENT AND TEAMWORK. Fanning Harper Martinson Brandt & Kutchin, P.C. is pleased to provide you with our Winter 2011 Newsletter and Legal Update. Below you will find information regarding successes and activities of our attorneys. Please click the hyperlinks for updates regarding: Civil Rights Law, Products Liability, Employment Law, School Law, Commercial Trucking Litigation, Premises Liability, and Insurance Law. Please call us with your questions or comments.

Victories and Honors

Texas Supreme Court Hears FHMBK’S Oral Argument Don Martinson recently orally argued an important case before the Texas Supreme Court involving the parameters of an insurance carrier’s right to invoke the appraisal clause of a commercial general liability (CGL) policy in reference to a property loss. The case, In Re Universal Underwriters of Texas Insurance Company¸ has attracted the interest of the insurance industry as well as others. Numerous amicus briefs were filed in this case. Don orally argued the case in December 2010. A ruling is expected to be rendered by the summer. U.S. Fifth Circuit Grants FHMBK’S Petition for En Banc Review In a case of national importance, Thomas P. Brandt and Joshua Skinner successfully petitioned the U.S. Court of Appeals for the Fifth Circuit to grant en banc review to consider whether two public elementary school principals should be given qualified immunity from Plaintiff’s claims of religious viewpoint discrimination. The appeal by the two principals in Morgan v. Swanson (the so-called “candy cane case”), focuses on whether the law was clearly established such that any reasonable public school official would have known that it was illegal to prohibit students from passing out religious literature at school. The case has been scheduled for oral argument the week of May 23, 2011. District Court Victories Thomas P. Brandt and Francisco J. Valenzuela successfully represented the Fort Worth Independent School District in a case involving allegations of race, age, and sex employment discrimination. After prevailing on a motion for sanctions and having fees awarded in Fort Worth ISD’s favor, FHMBK filed a motion for summary judgment. About two weeks later, the plaintiff dismissed her claims against Fort Worth ISD. Kelly v. Fort Worth ISD, No. 4:09-cv-00613-Y. Joshua Skinner successfully represented a community college district in a civil rights case in the United States District Court for the Northern District of Texas. The plaintiff alleged violations of the United States Constitution as well as of the Family Educational Rights and Privacy Act. FHMBK filed a motion to dismiss and the district court granted the motion and dismissed the case. Russell v DCCCD, No. 3:10-CV-724. Joshua Skinner successfully represented employees of a community college district in an employment case in the United States District Court for the Northern District of Texas. The plaintiff alleged negligence, intentional infliction of emotional distress and intentional interference with a contractual relationship. FHMBK filed a motion to dismiss and the district court granted the motion and dismissed the claims against the employee defendants. Mohamad v DCCCD, No. 3:10-cv-1189. Thomas P. Brandt and John Husted successfully represented five officials of a local school district who had been accused of race discrimination and retaliation. Mr. Brandt and Mr. Husted filed a motion to dismiss on behalf of the individual defendants which was granted by the district court. Lovelace v. Coppell ISD; No. 3-10-cv-1015. Thomas P. Brandt and John F. Roehm III successfully represented Carroll ISD in a case involving allegations of breach of contract. Mr. Brandt and Mr. Roehm filed a motion to dismiss on the basis of failure to exhaust administrative remedies. In response, the Plaintiff dismissed all her claims. Barton v Carroll ISD; No. 141-244776-10, 141st Judicial District Court, Tarrant County, Texas. Thomas P. Brandt and Francisco J. Valenzuela successfully represented Superintendent Kelly Rodgers and Principal Danielle Whiffen in a case involving allegations of federal constitutional violations stemming from an alleged student-on-student sexual assault and alleged subsequent harassment. FHMBK filed motions to dismiss based on qualified immunity for Mr. Rodgers and Ms. Whiffen and orally argued the motions before the U.S. District Court for the Northern District of Texas. The Court held that Mr. Rodgers and Ms. Whiffen were entitled to qualified immunity and dismissed them from the lawsuit. Forsythe v. Terrell ISD, No. 3:10-CV-00204.

Honors and Announcments

FHMBK is pleased to announce that Jennifer L. Kelley and Laura O’Leary have joined the firm. The State Bar of Texas’ Board of Directors approved FHMBK attorney Francisco J. Valenzuela as Co-Chairman of the State Bar’s History & Preservation Committee. To find out more about these attorneys, or more about our firm, please visit our website at www.fhmbk.com If you want to be removed from our mailing list, contact Sara Goode at sgoode@fhmbk.com 4849 Greenville Ave., Ste. 1300 • Dallas, TX 75206 • (214) 369-1300 • www.fhmbk.com

The Eighth Annual Texas Legal Update

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5.5 hours of General CE Hot Topics in Constitutional and Employment Law; Medicare Secondary Payer and Reporting Issues; Prompt Payment of Claims Update; The Role of Arbitration in Litigation Today; Designation of Responsible Third Parties—“It’s his fault; not mine”; Texas Supreme Court Update: Significant Recent Insurance, Premises Liability, and Tort Cases; Insuring Contractual Risk Transfers; Selection of Independent Defense Counsel: Who’s the Client and Why?; Premise Liability Law in Texas

The Role of Arbitration in Litigation Today

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1.0 hour of General CE The ADR Movement; Texas’s Take on Arbitration Agreements; Coverage Implications; Practical Implications

Medicare/Medicaid Liens, Medicare Set-Asides, Hospital Liens

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History of Medicare; Medicare Secondary Payer (MSP) Statute; Tort Settlements; Seriously, Don’t Mess with Medicare; Lien Reduced by Cost of Procurement; Past Medical Expenses; Set-Asides; New 2007 Act; New Deadlines

Texas Supreme Court Update

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1.0 hour of General CE Insurance Cases; Premises Liability Cases; Other Tort Cases; Legislative Update

Topical Issues Facing Claims Professionals

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2.0 hours of General CE Construction Defect Issues; Motor Carrier Coverage; Liability Issues for Voluntary Firefighters and Good Samaritans; Trucking Verdicts

WINTER 2009 NEWSLETTER COMMERCIAL TRUCK LITIGATION UPDATE

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