THE JOSH BRENT CASE: “APPARENT” INTOXICATION IS AN OBJECTIVE TEST FOR DRAM-SHOP-ACT LIABILITY

Beamers Private Club d/b/a Privae Lounge v. Jackson

Dallas Court of Appeals, No. 05-19-00698-CV (April 21, 2021)

Justices Osborne, Pedersen III (Opinion, here), and Goldstein

Ken Carroll

In the wee hours of the morning on December 8, 2012, after a night of drinking, Dallas Cowboys defensive lineman Josh Brent crashed his car while speeding. Brent’s best friend and teammate, Jerry Brown, was a passenger in the car and died in the accident. Brown’s mother, Stacey Jackson, sued Brent and Beamers d/b/a Privae, the club where Brent had been drinking immediately before the crash, securing multi-million-dollar judgments against each. Brent did not appeal. Beamers did, challenging, among other things, the legal and factual sufficiency of the evidence to support the judgment against the club under the Texas Dram Shop Act.

Under the Act, providing an alcoholic beverage to someone can lead to statutory liability if, “at the time the provision occurred it was apparent to the provider that the individual being sold, served, or provided with an alcoholic beverage was obviously intoxicated to the extent that he presented a clear danger to himself and others.” Focusing on the requirement that it be “apparent to the provider” that the person being served “was obviously intoxicated,” Beamers pointed to testimony from servers and other club employees, as well as from some of Brent’s teammates who were present, that Brent did not appear to them to be “obviously intoxicated.” The jury, of course, disagreed.

The Dallas Court of Appeals affirmed the verdict and judgment, holding that “the test for liability under the Act is an objective one.” The Court explained that “the requirement that intoxication be ‘apparent to the provider’ does not mean that the provider must actually observe such signs of intoxication; if it did, any provider of alcohol could escape liability by turning a blind eye to signs of intoxication that would otherwise be plain, manifest, and open to view.” Here, Brent failed a series of “roadside intoxication tests” at the accident scene, and a video showed Brent—who “was quiet and reserved by nature”—dancing at the club while drinking from two open bottles of alcohol. Especially viewed in the light most favorable to the verdict, the evidence was legally and factually sufficient to satisfy the Act’s objective test.

One procedural note, highlighting the recent turnover on the Dallas Court: Both the late Justice David Bridges and former Justice David Evans had participated in this case through submission. Justices Osborne and Goldstein, having studied the briefs and record, replaced them in the final determination of the appeal.

FIRST IMPRESSION: DALLAS COURT OF APPEALS HOLDS TCHRA PROHIBITS DISCRIMINATION BASED ON SEXUAL ORIENTATION

Tarrant County College District v. Sims

Dallas Court of Appeals, No. 05-20-00351-CV (March 10, 2021)

Justices Schenck (Concurring and Dissenting, here), Smith (Opinion, here), and Garcia

Ken Carroll

In the context of reviewing the denial of a plea to jurisdiction, the Dallas Court of Appeals has held the Texas Commission on Human Rights Act (TCHRA) prohibits discrimination based on a person’s sexual orientation or transgender status. It is the first court to do so. 

The Court acknowledged that “no Texas state court has addressed the issue of whether discrimination based on sexual orientation is prohibited under the TCHRA,” and the parties and trial court had in fact assumed the statute did not do so. But the appeals court noted that a stated “general purpose” of the TCHRA is to “provide for the execution of the policies of Title VII of the [federal] Civil Rights Act of 1964 and its subsequent amendments,” and so it “look[ed] to federal law for guidance.” Until very recently, federal authorities (including the Fifth Circuit) had held Title VII prohibited “sex discrimination—not sexual orientation or transgender discrimination.” But while the Sims case was on appeal, the United States Supreme Court decided Bostock v. Clayton County, Georgia, 140 S. Ct. 1731 (2020), holding that Title VII’s prohibition of discrimination “because of … sex” does extend to and prohibit discrimination based on sexual orientation or transgender status. “In order to reconcile and conform the TCHRA with federal anti-discrimination and retaliation laws under Title VII,” the Dallas Court concluded it “must follow Bostock and read the TCHRA’s prohibition on discrimination ‘because of … sex’ as [also] prohibiting discrimination based on an individual’s status as a homosexual or transgender person.”

Justice Schenck filed a separate opinion, concurring in the result (finding jurisdiction in the trial court) but dissenting for a variety of reasons from the majority’s pronouncement extending the scope of the TCHRA. The trial court had not had the opportunity to review the issue in light of Bostock. No party or amicus before the appeals court had addressed the issue “in an adversarial posture”—i.e., after Bostock, they all agreed with the extended scope articulated by the majority. The pronouncement was unnecessary to the determination of jurisdiction, because jurisdiction clearly existed on grounds other than the TCHRA—which Sims had not expressly pleaded, given the state of the law when she filed her lawsuit. And, on the “merits,” the law of Texas in 1983 when the TCHRA was enacted—including statutes that prohibited same-sex marriage and criminalized homosexual conduct—was such that the legislature at that time could not reasonably be understood to have included discrimination on the basis of sexual orientation within the prohibitions of the TCHRA or to have envisioned or intended that a change in federal law 40 years later would have that effect on this Texas statute.

THE NARROWED SCOPE OF “MATTERS OF PUBLIC CONCERN” UNDER THE TCPA, AS AMENDED

Vaughn-Riley v. Patterson

Dallas Court of Appeals, No. 05-20-00236-CV (December 2, 2020)

Justices Myers, Nowell, and Evans (Opinion, linked here)

Ken Carroll

In 2019, the Texas Legislature amended the TCPA “with the intent to narrow its scope” for actions filed on or after September 1 of that year. In Vaughn-Riley, the Dallas Court of Appeals provided an early glimpse of how it regards the amended version of the TCPA to limit the “matters of public concern” that trigger coverage under the Act. And while the plaintiff surely welcomed the result here, the appeals court’s reasoning probably stung a bit for someone, like her, in show biz.

Lawainna Patterson’s play, Sleeping with the Enemy, was set for back-to-back performances in Tyler. After the matinee, a dispute arose between the actors and crew and the producers, leading to cancellation of the evening show. Terri Vaughn-Riley, one of the actors (identified as “Vaughn” in the opinion), posted a video on Instagram voicing her frustrations with the situation. Patterson and others associated with production of the play sued Vaughn and the other actors, alleging breach of contract and “defamation, slander, and libel.” Vaughn moved to dismiss under the TCPA, arguing that “Patterson’s legal action was ‘based on or is in response to’ Vaughn’s exercise of the right of free speech or right of association” regarding the play and Patterson, its author. Specifically, Vaughn argued that “her communications and actions relate to matters of public concern because they (1) pertained to Patterson, who she claims is a limited purpose public figure, (2) involved the quality and timeliness of the public performance of a theatrical work, and (3) concerned a service in the marketplace.” The trial court denied the motion, and the Court of Appeals affirmed.

The appeals court began by noting that the Legislature had redefined “matters of public concern” before this lawsuit was filed, with the intention of narrowing the applicability of the TCPA. Drawing on legislative history, the Court reasoned that whether something qualifies as a “matter of public concern” is to be measured by the United States Supreme Court’s formulation in Snyder v. Phelps: “communications are matter[s] of public concern when they can ‘be fairly considered as relating to any matter of political, social or other concern to the community’ or when it ‘is a subject of legitimate news interest; that is, a subject of general interest and of value and concern to the public.’” 562 U.S. 443, 453 (2011). The Dallas Court concluded “there is nothing to suggest that the cancellation of the second performance of a play in Tyler, Texas, was the subject of general interest and of value and concern to the public.” Ouch. Further, the Court said, “Patterson’s status as cowriter and producer of the play,” coupled with a brief public interview about the dispute, do not “make Patterson a limited purpose public-figure.” Ouch, again. The Court then rejected Vaughn’s final argument—that the dispute related to a service in the maketplace, i.e., the play—because “the legislature’s 2019 amendments to the Act specifically removed issues related to ‘a good, product, or service in the market place’ from the definition of ‘matter of public concern.’”

DOCTORS’ DISPUTE IS NOT A “HEALTH CARE LIABILITY CLAIM”

Baylor Scott & White Health v. Roughneen

Dallas Court of Appeals, No. 05-18-00966-CV (June 9, 2020)

Justices Whitehill, Schenck, and Pedersen, III (Opinion, available here)

Kelli Hinson

Not all claims involving doctors and hospitals are health care liability claims subject to the procedural protections of TEX. CIV. PRAC. & REM. CODE Chapter 74. Roughneen involves a long-running dispute among various doctors and other health care providers. In 1999, Dr. Roughneen joined a group of physicians practicing cardiology, cardiothoracic surgery, and vascular surgery (CSANT). Dr. Roughneen left CSANT in 2005, and the following year he filed suit against the practice. The litigation ended in a settlement, with the CSANT physicians agreeing that “they would voluntarily recuse themselves from any voting, deliberation and/or decision-making relating to any peer review matters involving [Dr.] Roughneen.” Years later, when the doctors worked together at Heart Hospital and Baylor Grapevine, the CSANT doctors participated in purportedly “sham peer review proceedings” against Roughneen in alleged violation of their settlement agreement. Other disputes followed, resulting in claims and counterclaims for breach of contract, tortious interference, improper restraint of trade, and other causes of action. The CSANT parties filed a motion to dismiss under Chapter 74, arguing that Roughneen’s claims were health care liability claims and that he had failed to timely serve an expert report as required by the statute.

The trial court and the Dallas Court of Appeals both held that the claims were not health care liability claims under the statute and so the expert report requirement did not apply. The CSANT parties argued that all of Roughneen’s claims arose out of the peer review process and that “credentialing activities are an inseparable part of the medical services” a patient receives. The Court disagreed, noting that “at their heart, appellees’ complaints do not relate to how any patient was treated, but to how Dr. Roughneen was treated in the business of practicing medicine.” The Court distinguished a prior opinion holding that a claim that a faulty peer review process caused harm to a patient is a covered health care liability claim. In contrast, Dr. Roughneen’s causes of action did not involve any specific patient-physician relationship and were not rooted in the care and treatment of any patient. When claims against a health care provider “do not directly relate to any patient’s medical care, treatment, or confinement,” those claims are not health care liability claims. The motion to dismiss was, therefore, appropriately denied. 

“BOILERPLATE” IN JUDGMENTS HAS CONSEQUENCES

B.C. v. Steak N Shake Operations, Inc.
Supreme Court of Texas, No. 17-1008 (March 27, 2020)
Per Curiam Opinion (linked here)

Ken Carroll

We’ve all included something like this in our proposed orders, submitted to the trial court at a summary judgment hearing: “After considering the pleadings, evidence, and arguments of counsel, the Court finds that the motion should be granted.” Standard. Professional. But innocuous, right? Not really, the Supreme Court tells us.

B.C., who worked at a Steak ‘n Shake, alleged her supervisor sexually assaulted her. Steak ‘n Shake moved for summary judgment, urging both traditional and no-evidence grounds. B.C. submitted a response (with over 400 pages of evidence attached) for electronic filing on the day it was due, but said “her filing was rejected ‘because one of the exhibits was not formatted for optical character recognition.’” She corrected the technical glitch and re-filed the next day—one day after the deadline, without seeking leave to file late. Steak ‘n Shake filed a reply and objected to the late filing. The trial court granted summary judgment to Steak ‘n Shake. Its summary judgment order made no mention of Steak ‘n Shake’s objection to the late-filed response and evidence, but did contain the broad recitation quoted above, that the court had “consider[ed] the pleadings, evidence, and arguments of counsel.” The court of appeals affirmed summary judgment for Steak ‘n Shake, concluding in the process that the trial court had not considered B.C.’s late-filed response and evidence, and that it could not do so on appeal.

But the Supreme Court disagreed, reversed, and remanded. The Court acknowledged that, where there is nothing in the record to indicate the trial court granted leave for a summary judgment response and evidence to be filed late, it is presumed leave was not granted and that the tardy filing was not considered by the court. But, the Court said, an appeals court should review the record thoroughly for any “affirmative indication that the trial court permitted [and considered] the late filing.” Here, it held, “the trial court’s recital that it considered the ‘evidence and arguments of counsel,’ without any limitation, is an ‘affirmative indication’ that the trial court considered B.C.’s response and the evidence attached to it.” The Court analogized to its longstanding approach when considering late-filed amended pleadings in advance of a summary-judgment hearing. Like the situation here, the rules prohibit amendment of pleadings, without leave, within seven days of a summary-judgment hearing. But “leave of court is presumed when a summary judgment [order] states that all pleadings were considered, and when, as here, the record does not indicate that an amended pleading was not considered, and the opposing party does not show surprise.” So, be careful with “boilerplate” language in proposed orders.

One more thing. You may be thinking: Was B.C.’s filing really late at all? Shouldn’t the filing of B.C.’s response simply have related back to the day before, the deadline day, when she submitted the technically defective e-filing? Unfortunately, that was not standard practice back in 2014 when B.C. attempted her e-filing. And both the Supreme Court and court of appeals ruled B.C. waived that argument because she didn’t assert it until her motion for rehearing en banc in the appeals court.

INSURANCE COVERS DAMAGES AWARDED AGAINST MAJORITY OWNER WHO WRONGFULLY FIRED BUSINESS PARTNER

Prophet Equity LP v. Twin City Fire Ins. Co.
Dallas Court of Appeals, No. 05-17-00927-CV (August 19, 2019)
Justices Bridges, Brown, and Whitehill (Opinion linked here)

Lyndon Bittle

A majority partner wrongfully fired his partner, and paid the judgment entered against him. After the first $10 million of insurance coverage was exhausted, he sued an excess insurer for another $4 million. Reversing the trial court, the Dallas Court of Appeals held the excess insurer must pay the balance of the judgment and additional attorney’s fees, summing up its decision in a nifty flow chart:

DEC ACTION: IS A HARASSING DEFENDANT A JUDICIABLE CONTROVERSY?

Gutman v. Richard Wayne Wells and Real Estate Arbitrage Partners, Inc.
Dallas Court of Appeals, No. 05-18-01227-CV (August 5, 2019)
Justices Whitehill (Opinion, linked here), Partida-Kipness (Dissent, linked here), and Pedersen

Neil R. Burger

In a split panel decision, the Dallas Court of Appeals held that a “petition alleging that a defendant has repeatedly harassed and threatened the plaintiff because he refuses to accede to the defendant’s unlawful demands presents” a judiciable controversy under the Declaratory Judgments Act.

The Court considered this issue in an appeal of the trial court’s dismissal under Rule 91a. In previous lengthy litigation, Greg Gutman had obtained a judgment against one defendant, Real Estate Arbitrage Partners, LLC (“Arbitrage”) but not against the other defendant, Richard Wayne Wells. After the judgment was affirmed, Arbitrage paid the judgment, and Gutman delivered to Arbitrage a fully executed release of judgment. But Defendants wanted more. According to the petition, they repeatedly demanded an executed release of judgment against Wells, and harassed and threatened Gutman for his refusal to do so.

The majority held there was a real and substantial dispute under the Declaratory Judgments Act: “This sets out a controversy—whether Gutman must provide the requested release—that is real and not hypothetical.” And a declaratory judgment resolving that issue “will serve a useful purpose of terminating the parties’ controversy and ending the harassment and threats.” The dismissal was therefore reversed.

Justice Partida-Kipness dissented. Gutman did not seek construction of a contract or any other written instrument. Justice Partida-Kipness construed Gutman’s petition as asserting a claim for civil harassment, which sounds in tort, and does not fall within the parameters of the Declaratory Judgments Act. She disagreed “with the majority’s expansion of the statute,” and would have affirmed the trial court’s dismissal.

So, this case is precedent that a dec action can be used to resolve all sorts of disputes, not just those involving contracts, deeds, wills, and other writings.

LACHES IN THE CYBER AGE: WHEN THE JUDGE SAYS “GRANTED” BY EMAIL, CAN YOU WAIT FOR A SIGNED ORDER BEFORE PURSUING MANDAMUS?

In re Yamaha Golf-Car Co.
Dallas Court of Appeals, No. 05-19-00292-CV (April 8, 2019)
Justices Bridges, Osborne, and Carlyle (Opinion, linked here)

Neil R. Burger

In this mandamus proceeding, the Dallas Court of Appeals held that the relator waived its right to pursue mandamus relief by failing to timely challenge a trial court ruling contained in an email to the parties, even though no signed, written order was issued until months later.

The underlying lawsuit involved injuries to a child caused by a golf-car accident. The defendant, Yamaha, moved to designate emergency medical care providers as responsible third parties under Chapter 33. Plaintiffs filed a motion to strike, asserting that Yamaha had failed to meet the pleading and proof requirements of Chapter 74 concerning medical-care providers in emergency situations.

A month after the court held a hearing on that and other motions, the Judge sent an email to the court administrator stating that she needed “the following orders,” and listing the pending motions with an indication as to the court’s ruling on each, including that the motion to strike was “Granted.”  The court administrator forwarded the Judge’s email to all counsel, and requested orders be submitted.

The court did not sign a formal order denying the motion to strike for another seven months. Yamaha filed its mandamus petition one month after that, only three weeks before trial. Without considering the merits of the order striking the designation, the Court of Appeals determined that Yamaha’s mandamus was barred by laches because it had waited eight months after the Judge’s email announcing her decision before seeking mandamus relief. The Court rejected Yamaha’s argument that the Judge’s email was not sufficiently specific, and found that “signing the order was merely a ministerial act.”

So, the next time a court announces a ruling orally, in an email, or in some other informal fashion, think twice about waiting for a signed, written order before pursuing mandamus.

ARBITRATION AGREEMENT IN NDA DID NOT EXTEND TO SEXUAL ASSAULT CLAIM

Alliance Family of Companies v. Nevarez
Dallas Court of Appeals, No. 05-18-00622-CV (April 4, 2019)
Justices Whitehill, Molberg, and Reichek (opinion linked here)

Kelli Hinson

The Alliance Family of Companies and its CEO moved to compel arbitration of an employee’s claims that the CEO sexually assaulted her. In connection with her employment, the employee had signed two non-disclosure agreements, agreeing to keep confidential the information she learned about the company and the CEO. Each NDA included an agreement to arbitrate “[a]ny dispute under this Agreement.” The defendants argued that, because the alleged assault occurred in the course and scope of both the employee’s and the CEO’s employment, the claims were covered under the “broad language” of the arbitration agreements. The trial court denied the defendants’ motion to compel arbitration, and the defendants appealed.

The Dallas Court of Appeals sided with the employee, holding that her claims for sexual assault did not arise “under the [NDA] Agreement,” and so were outside the scope of the agreement to arbitrate. It concluded that “under the Agreement” requires a direct relationship between the agreement and the dispute and limits application to actions that arise as a result of the agreement. The Court distinguished other cases involving “broad provisions,” including an agreement to arbitrate “all disputes related to the employment relationship.” Here, there was no such broad language. And because the NDAs address the non-disclosure of confidential information, and not the type of intentional tort alleged by the employee, the dispute did not arise under the NDAs.

The Court also refused to consider arguably broader language contained in the recitals or “whereas clauses” of the NDAs, noting that contract recitals “are not strictly part of a contract and will not control a contract’s operative clauses unless those clauses are ambiguous.”

INTERLOCUTORY APPEAL OF AN ORDER DENYING AN MSJ THAT INVOLVES FREE SPEECH OR PRESS GROUNDS ENCOMPASSES THE ENTIRE ORDER

Dallas Symphony Association, Inc. v. Reyes
Supreme Court of Texas, No. 17-0835 (March 8, 2019)
Opinion by Chief Justice Hecht (linked here)

Ken Carroll

Jose Reyes was “a low-level customer-call-center employee of Bank of America [who] participated in [Dallas Symphony] Orchestra events as a volunteer and small donor for some ten years.” But he “acquired a reputation for crashing [DSO] events uninvited, photobombing, and speaking to the media purportedly on the Orchestra’s behalf but without authorization.” The DSO terminated Reyes as a volunteer and informed the Orchestra’s contact at the Bank about that. Reyes responded with an aggressive email from his Bank computer, purporting to express the Bank’s displeasure. The DSO forwarded that email to the Bank, which then terminated Reyes’s employment for a variety of reasons. When the DSO issued a brief “media advisory” about Reyes’s termination as a volunteer, D Magazine investigated and published an article about the entire saga, branding Reyes a “social butterfly” who “misrepresented his role with charities.”

Reyes sued D Magazine and the DSO for, among other things, defamation, tortious interference, and conspiracy. Both defendants moved for summary judgment, partly on the basis that some of the statements at issue were constitutionally protected, and partly on other, nonconstitutional grounds. When the trial court granted the motions in part and denied them in part, the magazine and the DSO appealed under § 51.014(a)(6) of the Civil Practice & Remedies Code, which provides for interlocutory appeal when a trial court “denies a motion for summary judgment that is based in whole or in part” on a defense grounded in the First Amendment’s free speech and free press guarantees. The Dallas Court of Appeals, however, concluded it lacked jurisdiction to review the trial court’s denial of the DSO’s motion regarding tortious interference, saying interlocutory review under § 51.014(a)(6) “is limited to the denial of summary judgment on claims or defenses implicating rights of free speech or free press”—an issue on which intermediate courts of appeals had disagreed.

The Supreme Court reversed, holding that whenever an appeal is triggered under § 51.014(a)(6), the statute’s plain language extends review to the entire order denying summary judgment and not just to those portions of the order addressing constitutional claims or defenses. The Court discounted earlier characterizations of the interlocutory-appeal statute as a “narrow exception” to general rules of appealability, an exception that must be “strictly construed.” “Characterizations of textual interpretations as ‘strict,’ liberal,’ ‘narrow,’ ‘broad,’ and the like,” the Court said, “are not helpful when, as is usually the case, the real goal is simply a ‘fair’ reading of the language.” Carefully parsing that language here—and particularly the statute’s authorization of an appeal from an order that denied a motion “based in whole or in part” on constitutional guarantees—the Court held that § 51.014(a)(6) allowed the DSO to appeal from the entire order denying its motion, on all grounds. The Court therefore proceeded to review the trial court’s denial of the DSO’s motion for summary judgment on tortious interference, a review that involved no constitutional defenses. It reversed that denial and remanded for the trial court to render judgment for the DSO.

JURISDICTION AFTER MANDATE, OR, “WE REALLY MEANT IT.”

In re F.A. Brown’s Construction, LLC
Dallas Court of Appeals, No. 05-18-00804-CV (September 18, 2018)
Justices Lang-Miers (Opinion, linked here), Fillmore, and Stoddart

Ken Carroll

The Dallas Court of Appeals granted mandamus when a trial court failed to follow its mandate from an earlier appeal. In the process, it explained the scope of a trial court’s jurisdiction when faced with a mandate, and the scope and duration of both courts’ jurisdiction when the trial court doesn’t follow the mandate.

Brown’s Construction sued Ken-Do Contracting for breach of contract. Brown alleged venue in Dallas; Ken-Do argued for transfer to Ellis County. The trial court sustained venue in Dallas, and the case proceeded to judgment there after a jury trial. On appeal, the Fifth Court found neither party had made the necessary venue showing, reversed the judgment, and remanded with specific instructions for the trial court “to conduct further proceedings on the issue of venue.” The trial court then peremptorily ordered the case transferred to Johnson County—a venue sought by neither party— without “conducting further proceedings,” as directed by the mandate. When Brown filed a motion to reconsider, the trial court acknowledged its transfer order was in error, but denied the motion because, it said, its plenary jurisdiction had expired. Brown then sought mandamus. Ken-Do acknowledged the transfer order was erroneous, but opposed mandamus, arguing that neither the trial court nor the Court of Appeals had jurisdiction to do anything about it—in part because of the trial court’s loss of plenary power and also because Johnson County lies outside the Appeals Court’s territorial jurisdiction, making it impossible for the Court of Appeals to order the transferee court to return the case to Dallas.

What a mess, right? But the Dallas Court promptly cleaned it up.

What is at stake here, the Court of Appeals explained, is an appellate court’s authority to enforce its judgments—in this case, the earlier judgment and mandate directing the trial court to “conduct further proceedings on the issue of venue” and only then to act on the issue. On remand, the trial court’s jurisdiction was limited to effectuating the mandate issued by the Court of Appeals. The appeals court retains jurisdiction for as long as necessary to ensure the trial court follows its instructions. Delays in the trial court—even those that would seem to deprive that court of plenary jurisdiction generally—do not impair the appeals court’s jurisdiction to ensure compliance with its prior mandate, by way of mandamus, or the trial court’s jurisdiction to effectuate that renewed directive. The Court of Appeals therefore granted mandamus, ordering the trial court to vacate its transfer order and to conduct the further proceedings on venue as ordered originally.

DEMAND LETTER? NO SLAPP. IT’S TRUE; BADU CAN SUE.

Levatino v. Apple Tree Café Touring, Inc.
Dallas Court of Appeals, No. 05-15-00614-CV (March 11, 2016)
Justices Lang-Miers, Evans, and Whitehill (Opinion)

Ken Carroll

The Dallas Court of Appeals has laid another stepping stone on the path to understanding the Texas Citizens Participation Act, the State’s anti-SLAPP statute. In a case of first impression, the Court ruled that a pre-suit demand letter constitutes neither the exercise of the right of association nor first amendment petitioning activity covered by the TCPA. So, a declaratory judgment action brought in response to such a demand letter may not be dismissed pursuant to that statute.

Recording artist and actress Erykah Badu prides herself on managing her own career, never having retained a professional talent manager. Badu once employed Paul Levatino through her company, Apple Tree Café Touring. After she fired Levatino, Badu posted statements on social media saying, among other things, that Levatino had not been her manager. Levatino retained counsel, who sent two demand letters to Badu’s counsel, threatening a defamation lawsuit. Badu filed a declaratory judgment action, seeking a determination Levatino had not been her “talent manager” and was owed no compensation for such. Levatino moved for dismissal under the Texas anti-SLAPP statute, arguing that Badu’s lawsuit was filed in response to his exercise of rights protected under the statute, specifically, the rights of association and petitioning. The trial court denied the motion, and Levatino appealed.

The TCPA—in particular, § 27.005 of the Civil Practice & Remedies Code—allows a party to seek early dismissal of a meritless lawsuit or claim brought against that party in response to the party’s exercise of a protected right. As the first step, the movant must show by a preponderance of the evidence “that the legal action is based on, relates to, or is in response to the party’s exercise of” certain constitutional rights. Levatino stumbled on this threshold requirement. He argued the demand letters constituted exercises of his First Amendment rights of association and petitioning. The court of appeals disagreed on both counts.

To be covered as an “exercise of the right of association” under TCPA § 27.001(2) “a communication [must be] between individuals who join together to collectively express, promote, pursue, or defend common interests.” The demand letters, however, were adversarial communications from Levatino’s counsel to Badu’s counsel; they were not designed to “promote, pursue, or defend common interests.”

Perhaps more difficult was the question whether the letters were protected as petitioning activity. TCPA § 27.001(4)(A)(i) protects as petitioning “a communication in or pertaining to . . . a judicial proceeding.” The Act does not define “judicial proceeding” or specify whether it encompasses potential future proceedings or refers only to an existing case. Relying on the “ordinary meaning” of the term, the Dallas Court concluded the Act protects only communications pertaining to an existing proceeding. Consequently, Levatino’s demand letters were not covered by the TCPA, denial of his motion to dismiss was affirmed, and Badu’s suit was allowed to proceed.

ONE TOUGH PRIVILEGE: MEDICAL PEER REVIEW

In re Rockwall Regional Hospital, LLC
Dallas Court of Appeals, No. 05-15-01554-CV (March 2, 2016)
Justices Lang, Fillmore (Opinion), and Brown

Ken Carroll

Rockwall Regional is a physician-owned hospital. When a shareholder- anesthesiologist terminated his practice there and the hospital then sought to redeem his shares, the doctor sued, claiming another recently departed physician had been offered better compensation for his shares. The doctor served requests for production that encompassed the peer review and credentialing files of the plaintiff doctor and the other recently departed physician. Rockwall Regional resisted, asserting the medical peer review committee privilege under Texas Occupations Code § 160.007(a). That privilege covers a peer review committee’s credentialing and review of physicians, including confidential documents generated by the committee or prepared at its direction, its minutes and recommendations, and the committee’s inquiries about a physician and responses to those inquiries. The trial court reviewed in camera the documents in question and ordered the hospital to produce almost all of them. The hospital elected to turn over four pages of the contested documents, but sought mandamus relief with respect to production of the rest, submitting a “sealed record containing the disputed documents” for review by the appellate court.

After conducting its own review of the “sealed record” of contested documents, the Dallas Court of Appeals declared them all to be covered by the medical peer review committee privilege. The doctor argued, however, that the hospital had waived the privilege by allowing him to view, but not copy, his own credentialing file (part of the disputed documents), pursuant to a letter from the hospital’s attorney, and by producing four pages of the other doctor’s file. The appeals court rejected both arguments. The hospital concluded the four pages from the other doctor’s file were not covered by the privilege, as the trial court had found; their production, therefore, could not constitute waiver as to other documents that were privileged. More significantly, the Court held that allowing the plaintiff doctor to view his own file, even though authorized in writing by the hospital’s attorney, did not waive the privilege here, because the statute recognizes “a waiver of the privilege” only if it is “executed in writing by the chair, vice chair, or secretary of the affected medical peer review committee,” which was not shown here. Tex. Occ. Code § 160.007(e). So, although the hospital’s voluntary disclosure of the doctor’s records almost certainly would have constituted waiver of other, more fragile privileges—e.g., attorney-client or work product—it did not fulfill the more robust requirements delineated in the statute for waiver of the medical peer review committee privilege.

AN AMBIGUOUS AGREEMENT IS STILL AN AGREEMENT

In re Lauriette
Dallas Court of Appeals, No. 05-15-00518-CV (August 20, 2015)
Justices Francis, Myers (Opinion), and Schenck

Kelli Hinson

An agreement is enforceable even if the parties can’t agree on what it means. The Dallas Court of Appeals granted mandamus to require the trial court to determine “the parties’ true intentions.”

"SERIAL" LIVES ON, WITH A TWIST: ADNAN’S ALIBI ISSUE GOES BACK TO THE TRIAL COURT

Adnan Syed v. State of Maryland
Maryland Court of Special Appeals, No. 2519 (May 18, 2015)
Order for Limited Remand

Ken Carroll

The appeal of Adnan Syed, subject of NPR’s popular Serial podcast, has taken a somewhat unusual turn. After the State had filed a well-crafted brief in opposition to Adnan’s own principal appeal brief (previously summarized here), the Maryland Court of Special Appeals on Monday stayed the appeal and ordered a “limited remand” for the trial court to consider issues raised in the January 2015 “affidavit” of potential alibi witness Asia McClain. That affidavit was filed earlier this year as the final exhibit to a supplement to Syed’s Motion for Leave to Appeal. McClain’s affidavit testimony not only bolstered her status as a potential alibi witness—whom Syed’s trial counsel allegedly failed to interview or even contact—but also raised concerns about possible misconduct by one of the prosecutors in the post-conviction process. But, while this remand Order is clearly good news for Syed and his supporters, it may not be the “home run” some see it to be.

PAPER TOWELS DO NOT PROVE KNOWLEDGE OF PUDDLE

Young v. Wal-Mart Stores Texas, LLC
Dallas Court of Appeals, No. 05-14-00362-CV (March 12, 2015)
Justices Francis (Opinion), Lang-Miers, and Whitehill

Lyndon F. Bittle

Young slipped on a puddle of water as she was leaving a Wal-Mart store and sued Wal-Mart for her injuries. The Dallas Court of Appeals affirmed a no-evidence summary judgment against Young. Evidence that a store clerk was in the area for half an hour and had paper towels in her hand was no evidence the clerk knew or should have known the puddle was there, when the clerk testified she was using the towels to clean conveyor belts. “Circumstantial evidence from which equally plausible but opposite inferences could be drawn is merely speculative, and therefore, legally insufficient to support a finding.”

DALLAS COURT ADDS TWO CASES TO THE DISCUSSION OF WHAT IS AND WHAT ISN’T A HEALTH CARE LIABILITY CLAIM

Texas Health Presbyterian Hospital Dallas v. Burch

Dallas Court of Appeals, No. 05-14-00665 (January 22, 2015)
Justices Evans (Opinion), Brown, and Schenck

Tinnard v. Dallas County Hospital District
Dallas Court of Appeals, No. 05-13-01161-CV (January 22, 2015)
Justices Bridges, Lang (Opinion), and Evans

Kelli Hinson

The Dallas Court of Appeals issued two opinions further clarifying what is and what isn’t a health care liability claim subject to the expert report requirements of Chapter 74 of the Texas Civil Practice & Remedies Code. In Tinnard, it found that the character of a health care liability claim cannot be changed by artful pleading or by the invocation of the Texas Tort Claims Act. In Burch, it found that a slip and fall that happened to take place in a hospital did not give rise to a health care liability claim.