THUS SAYETH THE TEXAS SUPREME COURT: LIMITATIONS FOR CONSPIRACY GOVERNED BY LIMITATIONS FOR THE UNDERLYING TORT

Agar Corp. v. Electro Circuits International, LLC
Supreme Court of Texas, No. 17-0630 (April 5, 2019)
Opinion by Justice Devine (linked here)

Ken Carroll

Dirty Harry Callahan famously warned, “A man’s got to know his limitations.” Well, thanks to the Supreme Court’s decision in Agar v. Electro Circuits, we now know our limitations with respect to civil conspiracy claims here in Texas. The Supreme Court held that “civil conspiracy is a derivative claim that takes the limitations period of the underlying tort that is the object of the conspiracy.” “Having determined that civil conspiracy is not an independent tort,” the Court said, “it follows that the claim does not have its own statute of limitations.” Instead, “a civil conspiracy claim is connected to the underlying tort and survives or fails alongside it.”

As a corollary, the Court also held a conspiracy claim accrues and limitations begin to run along with the underlying tort; it rejected a separate last-overt-act accrual rule for conspiracy. If the claimant alleges conspiracy to commit multiple torts, the claim accrues and limitations run separately with respect to each such underlying tort.

The ruling brings Texas into line with the majority of other jurisdictions throughout the country. But reaching this conclusion required the Court to disapprove the decisions of all Texas intermediate courts of appeals to have addressed the issue, because they had held conspiracy to be governed by the two-year statute of limitations in TEX. CIV. PRAC. & REM. CODE § 16.003. Invoking that previously unbroken chain of Texas precedent, Electro protested that the Court “should not overturn the court of appeals’ decades-long uniform application of the two-year limitations period to civil conspiracy.” But the Supreme Court demurred, observing that “a long history of mistaken application alone is insufficient to counsel against correcting the error.”