A court reporter’s lawsuit against the Judicial Branch Certification Commission is allowed to continue, a panel of the Third Court of Appeals ruled this week in an opinion authored by Chief Justice Darlene Byrne.
Court reporter Jo Ann Holmgren and her firm, Preferred Legal Services, sued the JBCC and its commissioners in 2021 after the oversight commission dismissed her complaint against a now defunct company, StoryCloud, that supplied notaries to digitally record depositions in place of licensed court reporters.
Holmgren had filed a petition for judicial review or, alternatively, a writ of mandamus in an Austin trial court. The JBCC, represented by the Office of the Attorney General, argued the court lacked authority to hear the case, that sovereign immunity bars the lawsuit and that Holmgren lacks standing. The trial court allowed Holmgren’s petitions to continue, and the commission appealed.
The three-justice panel of the Third Court, including Gisela Triana and Edward Smith, issued a mixed bag ruling allowing Holmgren to proceed with her suit but dismissed her petition for judicial review.
Because Holmgren’s complaint was dropped without a hearing, judicial review is not expressly available under the Texas Government Code statutes for JBCC actions, the justices decided. Texas’ Administrative Procedures Act extends judicial review to a person aggrieved by a final decision in a contested case, the justices noted, but they did not find Holmgren’s case fell within the provisions.
The ruling is a win for court reporters, said Holmgren’s lawyer and husband, Dennis Holmgren.
“Honestly, either route gets me to where we want to go,” Dennis Holmgren said. Since StoryCloud is no longer in business, the end goal is “to get an opinion from a court that the JBCC didn’t do its job, which will set precedent for them in the future.”
The mandamus proceeding allows Holmgren to go through the discovery process, he added.
“I think that the court was correct in the ruling on the mandamus. I disagree with what they did with respect to the administrative appeal but understand how they got there,” Holmgren said.
Three lawyers with the attorney general’s office did not respond to a request for comment.
The JBCC, created in 2014 by the Texas Legislature, is charged with certifying court reporters and enforcing regulations in the profession.
Texas court reporters have accused the JBCC of letting bad actors run afoul of the law. In another case, court reporter Lorrie Schnoor complained to the commission about an Austin videographer who advertised transcription services without obtaining the state certification required of court reporters. The videographer took Schnoor to court, accusing her of blackballing his business. A federal judge decided the videographer’s transcription service was illegal, even though the JBCC had dismissed Schnoor’s complaint. Court reporter associations have hailed the judge’s opinion as a win.
The Holmgrens figured they had a clean case against StoryCloud because it “blatantly” advertised rule violations, Dennis Holmgren said.
The San Diego-based company began expanding into Texas in 2019 and registered with the JBCC as a court reporting firm. The company selected the court reporting firm option out of abundance of caution because it didn’t see another option that described its exact business model and technology, a lawyer for StoryCloud wrote in a letter that’s been included in the litigation. StoryCloud offered to surrender the registration after Holmgren submitted her complaint to the JBCC.
StoryCloud, whose clients included Farmers Insurance Group, touted transcription services on its website. The company largely relied on notaries to administer oaths and artificial intelligence to transcribe depositions, Holmgren said.
The JBCC has argued Holmgren impermissibly attempted to control state action and does not have standing to bring the suit because there is no redress for her and her firm. But the appeals court panel said Holmgren and her firm “sufficiently demonstrated that they have a particularized interest in the enforcement of rules restricting their profession that would be affected differently from the interests of the general public to support standing in this matter.”
“The potential determination that the Commission has jurisdiction to regulate StoryCloud’s practices is redress sufficient to support that standing,” the chief justice wrote.
The appeals court panel also rejected the argument that the trial court only has jurisdiction to mandate ministerial duties and that requiring the JBCC to conduct investigation and hand down a penalty exceeds its scope.
“The trial court could decide the merits of the mandamus petition in ways that do not attempt improperly to control state action,” the opinion states.
The appeals case number is 03-22-00245-CV.