Austin Bar Member Paul Matula, Assistant City Attorney’s Office, for Respondents
Borgelt v. Austin Firefighters Assoc. IAFF Local 975, No. 22-1149
The main issue in this case is whether a provision in a collective bargaining agreement that allocates a pool of paid leave to further a union’s interests violates any “Gift Clause” in the Texas Constitution (Art. III, Secs. 50, 51, 52(a) and Art. XVI, Sec. 6(a)). The Gift Clauses are structural limitations that aim to reduce the misuse of public funds and resources by requiring specific conditions to be met before such expenditures can be made.
The Austin Firefighters Association represented members of the Austin Fire Department in contract negotiations with the City of Austin, which resulted in a collective bargaining agreement. Article 10 of the agreement allocates thousands of hours of paid leave to be used by the Association president and authorized firefighters for “Association business.”
A group of Austin taxpayers sued the Association and City, arguing that Article 10 violates the Gift Clauses because it lacks sufficient consideration and fails to serve a predominantly public purpose. The State intervened in support of the taxpayers and further asserted that Article 10 does not serve a strictly public purpose. The trial court rendered judgment for the defendants after a bench trial. The court of appeals affirmed, reasoning that the paid leave arrangement is not a gratuitous gift and serves a predominantly public purpose.
The taxpayers and the State filed petitions for review, which the Supreme Court granted.
Austin Bar Member William L. Mennucci, Thompson Coe Cousins & Irons, LLP, for Petitioner
Ford Motor Co. v. Parks, No. 23-0048
This case concerns when a sale occurs under the statute of repose for products liability, which requires a claimant to sue the manufacturer or seller “before the end of 15 years after the date of the sale of the product by the defendant.”
Samuel Gama sustained permanent, severe injuries when his Ford Explorer flipped and rolled several times during a traffic accident. Gama, his mother, and his wife, Parks, sued Ford for products liability under negligence and strict-liability theories. Ford asserted the statute of repose as an affirmative defense, arguing that the case was barred because it was brought more than 15 years after the Explorer was originally sold. Ford moved for a traditional summary judgment, arguing that a dealership first sold the Explorer more than 15 years before Parks brought suit. When Parks demonstrated that the dealership had initially leased the Explorer, Ford brought a second motion for a traditional summary judgment based on its sale of the Explorer to the dealership. In response, Parks argued that Ford failed to conclusively establish the date of sale because it relied on the inconsistent and contradictory testimony of interested witnesses.
The trial court granted summary judgment for Ford, but the court of appeals reversed, and Ford filed a petition for review. Ford argues that proof of payment on a date certain is not required to demonstrate that a sale occurred for purposes of the statute of repose. Instead, Ford contends it merely had to show that a sale must have occurred outside of the 15-year window for suit. Ford also asserts that it met its burden at summary judgment to prove that a sale occurred outside the 15-year window. The Supreme Court granted the petition for review.
Austin Bar Member Wallace B. Jefferson, Alexander Dubose & Jefferson LLP, for Petitioner
Tex. Disposal Sys. Landfill, Inc., v. Travis Cent. Appraisal Dist., No. 22-0620
The issue in this case is whether the trial court had subject-matter jurisdiction over an appraisal district’s claim that the Appraisal Review Board’s appraisal of a taxpayer’s property was below market value, even though the taxpayer brought, and the board decided, only an unequal-appraisal protest.
After the Travis County Appraisal District appraised Texas Disposal Systems Landfill’s 344-acre property for the 2019 tax year, the Landfill protested the value to the Travis ARB, asserting only an unequal-appraisal challenge. The ARB issued an order agreeing that the appraisal was unequal and significantly reducing the appraised value of the property. The ARB did not determine the property’s market value.
As authorized by the Tax Code, TCAD appealed the ARB’s order to a district court, pleading that the ARB’s appraisal resulted in unequal appraised value and was below market value. The trial court granted the Landfill’s plea to the jurisdiction and dismissed TCAD’s market-value claim on the ground that the ARB only determined an unequal-appraisal protest. The court of appeals reversed the plea, holding that the trial court had jurisdiction over TCAD’s market-value claim.
Texas Disposal Systems petitioned the Supreme Court for review, arguing that the Tax Code limits trial courts’ subject-matter jurisdiction to only the grounds raised in the taxpayer protest and determined by the ARB. The Supreme Court granted the petition.
Austin Bar Member Rachel A. Ekery, Alexander Dubose & Jefferson LLP, for Petitioner
USAA Cas. Ins. Co. v. Letot, No. 22-0238
The issue in this case is whether the trial court erred by certifying a proposed class action.
Sunny Letot’s vehicle was rear-ended by a USAA-insured driver. USAA determined that the cost to repair Letot’s vehicle exceeded its value and deemed her car a total loss. USAA therefore sent Letot a check for the car’s value and filed a report with the Texas Department of Transportation identifying Letot’s car as “salvage.” Letot later rejected USAA’s valuation and check. She sued USAA for conversion for sending TxDOT the report before she accepted payment. Letot then sought class certification.
The trial court certified a class for both injunctive relief and damages. The class consisted of all claimants for whom USAA filed a report within three days of attempting to pay a claim for a vehicle deemed a total loss. The court of appeals affirmed the certification order.
USAA petitioned for review. It argues that neither Letot nor the alleged class members have standing to sue. In the alternative, USAA argues that the class fails to satisfy the certification requirements. The Supreme Court granted USAA’s petition.
Austin Bar Member Sheldon E. Richie,
Richie & Gueringer, PC, for Petitioners
Austin Bar Member Isabelle Antongiorgi, Dunham LLP, for Respondents
Keyes v. Weller, No. 22-1085
At issue in this case is whether Business Organizations Code Section 21.223 shields a corporate agent from being held personally liable for torts committed during the course and scope of employment or in the role of corporate agent.
David Weller, president and sole member of IntegriTech Advisors, spent several months in employment negotiations with MonoCoque Diversified Interests LLC, which is wholly owned by Mary Alice Keyes and Sean Leo Nadeau. The parties exchanged emails detailing compensation terms, Weller’s salary, IntegriTech’s training supplement, and payments based on quarterly revenues. Weller had other employment opportunities available but, in reliance on MonoCoque’s representations, declined them and accepted MonoCoque’s employment offer. After Weller’s acceptance, MonoCoque refused to pay him the promised revenue payments for the first quarter. Weller quit and in later discussions was told that MonoCoque had never intended to pay quarterly revenue interest or a training supplement.
Weller filed suit asserting various fraud claims against Keyes and Nadeau, alleging that they were personally liable for their own fraudulent and tortious conduct notwithstanding that they were acting as agents of MonoCoque. Keyes and Nadeau filed a motion for partial summary judgment on all of Weller’s claims against them in their individual capacities. The trial court granted the motion, but the court of appeals reversed.
Keyes and Nadeau petitioned the Supreme Court for review, arguing that Weller only relied on statements that Keyes and Nadeau made in their capacity as representatives of MonoCoque and that Section 21.223 shields corporate agents from personal liability for the corporation’s contractual obligations. Weller responds that Section 21.223 only shields veil-piercing theories of liability and was never intended to preclude personal tort liability.
The court granted the petition for review.
Austin Bar Member Marcy Hogan Greer, Alexander Dubose & Jefferson LLP, for Respondent
In re Trust A & Trust C, No. 22-0674
The central issue in this case is whether compulsory joinder extends to subsequent purchasers of stock when a lawsuit between other parties effectively adjudicates the stock’s ownership.
Glenna Gaddy, a co-trustee of a family trust, transferred stock from the family trust to her personal trust. Gaddy then sold the stock from her personal trust to her two sons. Following the sale, Mark Fenenbock sued Gaddy, seeking a declaration that he is a co-trustee under the trust agreement and that the transfer was void because he had not consented to it as co-trustee.
The probate court declared the stock transfer to be void, ordered that the stock be “restored” to the family trust, and ordered Gaddy to undertake certain actions, including an accounting and deposit of substantial funds. Gaddy appealed the probate court’s order declaring the stock transfer from the family trust to her personal trust void.
The court of appeals vacated and remanded, holding that the probate court lacked jurisdiction to declare the stock transfer void due to the omission of “jurisdictionally indispensable” parties.
In particular, the court of appeals concluded that the probate court committed fundamental error and lacked subject-matter jurisdiction to enter the order for failing to join Gaddy’s sons—the purported owners of the stock in question.
Both parties petitioned for review as to the court of appeals’ jurisdictional holding. Fenenbock argues that Gaddy’s sons need not have been joined at all. Gaddy argues that her sons need not have been joined in order for the probate court to have jurisdiction, but that the probate court’s adjudication of the stock’s ownership in her sons’ absence was error.
The Supreme Court granted the parties’ petitions for review.
Austin Bar Member W. Lance Cawthon, Snell Law, for Petitioner
Malouf v. State ex rel. Ellis, No. 22-1046
A primary issue in this case is whether the State can conclusively establish Medicaid fraud at summary judgment when scienter is an essential element of the claim.
Dr. Malouf is a dentist who owned a chain of dental offices. Dr. Malouf and his associates were approved Medicaid providers who provided dental and orthodontic services to Medicaid recipients. Over a three-year period, Dr. Malouf submitted forms falsely representing that he provided services to Medicaid recipients, although the dental services provided to the beneficiaries of those claims were actually performed by other dentists in Dr. Malouf’s practice.
Two private citizens brought separate qui tam actions against Dr. Malouf for violations of the Texas Medicaid Fraud Prevention Act. The trial court consolidated the cases after the State intervened in both. The State’s live petition at the time of summary judgment asserted that Dr. Malouf knowingly failed to identify the license type and Medicaid billing number of the treating dentist on more than 1,800 Medicaid claims, listing himself as the treating dentist, when, in fact, another dentist had provided the services. Both parties moved for summary judgment, the State on traditional grounds and Dr. Malouf on no-evidence grounds. The district court denied Dr. Malouf’s motion, granted the State’s, and awarded more than $16 million in civil penalties, attorney fees for the State and the private citizens who originally brought qui tam actions, and other costs and sanctions against Dr. Malouf.
Dr. Malouf filed a petition for review, arguing that the State did not conclusively show that he failed to indicate the treating dentist’s license type or that he acted knowingly. Specifically, Dr. Malouf contends that he did indicate the correct license type and that his testimony that he lacked personal knowledge of improper billing raised a genuine issue of material fact as to scienter. The court granted the petition for review.
Austin Bar Member Kennon L. Wooten, Scott, Douglass & McConnico LLP, for Appellees
State of Texas v. Loe, No. 23-0697
This case involves a challenge under the Texas Constitution to a statutory prohibition on the provision of certain medical treatments to children experiencing gender dysphoria.
SB 14 adds to the Health and Safety Code subchapter X, which governs “Gender Transitioning and Gender Reassignment Procedures and Treatments for Certain Children.” New Section 161.702 of the Code prohibits a physician or healthcare worker from knowingly performing certain procedures or administering certain treatments “[f]or the purpose of transitioning a child’s biological sex as determined by the sex organs, chromosomes, and endogenous profiles of the child or affirming the child’s perception of the child’s sex if that perception is inconsistent with the child’s biological sex.” SB 14 authorizes the Attorney General to bring an action to enforce the prohibition in Section 161.702, and it amends the Occupations Code to require that the medical license of a physician in violation of Section 161.702 be revoked.
Plaintiffs-Appellees are the parents of children who seek medical treatments prohibited by Section 161.702, physicians who wish to continue providing such treatments to children, and organizations representing the interests of these groups. Plaintiffs sued the Attorney General and other state defendants, alleging that SB 14 violates the Texas Constitution. Specifically, the plaintiffs alleged that SB 14 violates the due course of law guarantee in Article I, Section 19 by infringing on parental autonomy with respect to medical decision-making, by depriving physicians of a vested property interest in their medical licenses, and by infringing on the occupational freedom of healthcare workers. The plaintiffs further alleged that SB 14 violates the guarantees of equal rights and equality under the law in Article I, Sections 3 and 3a by discriminating against transgender children because of their sex and transgender status.
The trial court denied the State’s plea to the jurisdiction, concluded that the plaintiffs are likely to prevail on the merits of their constitutional claims, and granted a statewide temporary injunction prohibiting the State from enforcing SB 14.
The State filed a direct appeal to the Supreme Court, which noted probable jurisdiction under Section 22.001(c) of the Government Code and set the case for oral argument.
The State challenges the injunction on jurisdictional grounds and on the merits.