In this edition of Litigation Roundup, the U.S. Court of Appeals for the Fifth Circuit found the insulated power structure of an agency meant to protect racehorses facially unconstitutional, Oncor was found liable for a tree trimmer’s injuries and a closely watched insurance case is teed up before the Texas Supreme Court.
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Dallas County District Court
Jury Awards Tree Trimmer $10.8M in Electric Shock Suit
A jury has hit Oncor Electric Delivery Co. with a $10.8 million damages award in a lawsuit brought by a tree trimmer whose left hand was badly burned after the tree he was working on became energized, to the point he requires an amputation.
Jurors sided with Robert Louis Hawkins Jr. 11-1, finding him 20 percent liable for the injuries that occurred in September 2015 and Oncor 80 percent liable. Testimony began before Dallas County District Judge Gena Slaughter Nov. 9 and deliberations began the afternoon of Nov. 17.
The verdict was returned around 6 p.m. Friday.
But the jury’s answer to Question No. 4, which contained three parts, could serve as a roadblock to any possible recovery by Hawkins. The jury answered “yes” to whether it was possible that Hawkins came within six feet of a high-voltage overhead line, but answered “no” to whether he operated a tool, equipment, supplies or materials within six feet of the line.
The question implicates Texas Health and Safety Code Chapter 752, which mandates that anyone doing work within six feet of a high-voltage power line “must notify the operator of the line at least 48 hours before the work begins.”
Jim Mitchell of Payne Mitchell Ramsey, who represents Hawkins, said he presented evidence to the jury that Oncor had failed to follow its vegetation management plan, submitted to the Public Utility Commission of Texas annually, and should have trimmed the tree that came into contact with the powerline 14 months prior to the incident.
Mitchell’s theory of the case was that the tree Hawkins was working on was not near the powerline, but another tree on the property that was also touching the tree Hawkins was trimming was making contact with the powerline and caused both trees to become “energized.”
Oncor had argued Hawkins must have contacted the line with his pole saw.
“And there was no evidence of that,” Mitchell said, adding it was a major point of contention in the case. “They never took down the power line to examine it to see if there was metal-to-metal contact.”
Mitchell said his client’s left hand functions as a “support limb” or “post” that cannot grasp objects and that he needs an amputation and prosthesis that he has not been able to afford. The jury verdict doesn’t mean he’ll be getting that medical care soon, Mitchell said.
“With Oncor’s history, this thing is going to be going on for three more years,” he said, anticipating a likely appeal should the trial court enter final judgment for Hawkins.
Hawkins is also represented by Andrew Bullard of Payne Mitchell Ramsey.
Oncor is represented by Tom Lillard and Robert Wise of Lillard Wise Szygenda.
The case number is DC-17-04820.
Western District of Texas
Jury Sides With VLSI, Hits Intel with $948.7M Verdict
In the third face-off between Intel and Fortress Investments-owned company VLSI Technology before U.S. District Judge Alan Albright, VLSI recently secured a second jury verdict in its favor, bringing the score to 2-1.
The jury returned its unanimous verdict at 4:21 p.m. Nov. 15, according to court documents, finding Intel infringed the ‘983 patent and awarding $948.7 million in damages. The patent was for information processing technology that VLSI alleged was infringed through the server microprocessors Intel manufactures.
In March 2021, a federal jury in Waco determined Intel had infringed the VLSI-owned patents and awarded the company $2.175 billion in damages. A second trial, in April 2021, resulted in a verdict that Intel had not infringed.
The jury began deliberating and returned its verdict the same day, sending two questions to the court that remain sealed. Jury selection began Nov. 7.
Intel is represented by J. Stephen Ravel and Kelly Ransom of Kelly Hart & Hallman, William F. Lee, Louis W. Tompros, Kate Saxton, Gregory H. Lantier and Amanda L. Major of WilmerHale.
VLSI is represented by Andy Tindel, J. Mark Mann and G. Blake Thompson of Mann Tindel Thompson and Morgan Chu, Benjamin W. Hattenbach, Iian D. Jablon, Alan J. Heinrich, Ian Robert Washburn, Amy E. Proctor, Elizabeth C. Tuan, Dominik Slusarczyk, Charlotte J. Wen, Benjamin Monnin, Jordan Nafekh and Babak Redjaian of Irell & Manella.
The case number is 1:19-cv-00977.
Thirteenth Court of Appeals
‘Switched at birth’ Case is a Health Care Liability Claim
A Texas intermediate appeals court has concluded that a claim against a hospital filed by two women who said they were discharged as newborns in 1969 to the wrong families is a health care liability claim. The Thirteenth Court of Appeals remanded the “switched at birth” case to the trial court in Nueces County to rule on the adequacy of expert reports submitted by the women.
The court of appeals said the question of whether a hospital’s misidentification of infant patients constitutes a health care liability claim is an issue of first impression for Texas courts.
Mary Ann High and Cynthia Rector sued Christus Spohn Health System Corporation in 2020 for negligence and medical malpractice, complaining that the hospital’s improper practices resulted in their being misidentified while in the hospital and discharged to the incorrect families.
Christus Spohn challenged the trial court’s denial of its motion to dismiss the case under the Texas Medical Liability Act. The hospital claimed deficiencies in the expert reports submitted by High and Rector.
High and Rector asserted that they had submitted the expert reports out of an abundance of caution and that their claims do not fall under the medical liability act’s requirements for filing expert reports.
In an opinion by Justice Clarissa Silva, the court said the hospital’s alleged act or omission proximately caused the injury to High and Rector.
“A substantive nexus exists between Christus Spohn’s alleged act or omission – its failure to correctly identify each infant and maintain accurate identification for each infant, an inseparable part of the hospital’s professional or administrative duty to create and maintain accurate medical records – and High and Rector’s claimed injury – their misidentification as infants and the resulting erroneous discharge,” said Silva.
Justices Leticia Hinojosa and Jaime E. Tijerina sat on the panel with Silva.
Christus Spohn is represented by Corpus Christi lawyers William C. Woolsey and Richard C. Woolsey of Woolsey & Woolsey and Thomas F. Nye, Megan Ann Kemp and Catrina L. Guerrero of Gault, Nye & Quintana.
High and Rector are represented by Deborah Race of Tyler, Charles C. Webb Jr. and Parker S. Webb of Webb Cason in Corpus Christi and Eric Findlay and Tab E. Lawhorn of Findlay Craft in Tyler.
The case number is 13-21-00172-CV.
Supreme Court of Texas
Life Insurance ‘Intent to Deceive’ Case Attracts Widespread Interest
The Texas Supreme Court will hear an appeal in a case being closely watched by life insurance companies. The case presents issues about whether an insurer’s ability to rescind a life insurance policy based on an applicant’s material misrepresentation requires proof of the applicant’s intent to deceive.
Applicant Sergio Arce did not disclose serious health conditions, including a diagnosis of hepatitis C, on his application for life insurance with American National Life Insurance Company. Arce died in a car accident 13 days after the policy was issued. His mother’s claim for benefits was denied by American National after the company discovered Arce had misrepresented his medical history.
Bertha Arce sued for breach of contract and violations of the Texas Insurance Code. The Hardeman County trial court in 2019 granted summary judgment for American National. The Seventh Court of Appeals in 2021 reversed, concluding a fact issue exists as to whether Sergio Arce intended to deceive on his application for coverage.
American National argues that the common law intent-to-deceive element for rescission claims conflicts with the Insurance Code, which does not require an intent to deceive for policies in place less than two years. Requiring an intent to deceive for all rescission claims would eliminate that statutory distinction, the insurance company says.
Bertha Arce’s lawyers say American National is using a recodification of the Insurance Code to create a new statutory defense for insurers and abrogate more than a century of Texas common law by eliminating the “intent to deceive” element.
The industry, in amicus letters and briefs, argues that insurers must be able to contest misrepresentations in the two-year period after policy issuances to provide needed coverage promptly while preventing fraud.
The court is scheduled to hear the case Jan. 12.
American National is represented by Paul W. Green of Alexander Dubose & Jefferson and Michael Adams, David Le Blanc and Angie Olalde of Greer, Herz & Adams.
Bertha Arce is represented by John Smithee of Templeton Smithee Hayes Heinrich & Russell and Mark A. Ticer and Jennifer W. Johnson of the Law Office of Mark A. Ticer.
The case number is 21-0843.
U.S. Court of Appeals for the Fifth Circuit
Horseracing Integrity & Safety Authority Ruled Unconstitutional
A federal agency created to set national standards to protect race horses has been declared unconstitutional because of its power structure.
The unanimous ruling issued Friday determined that the Horseracing Integrity and Safety Authority unconstitutionally delegates government power to a private entity “without sufficient agency supervision.”
The groups challenging the agency’s authority, joined by Texas, filed an appeal with the Fifth Circuit on April 20, according to court documents, after Lubbock-based U.S. District Judge James Wesley Hendrix held that while the plaintiffs’ concerns “are legitimate” the agency’s structure “stays within current constitutional limitations as defined by the Supreme Court and the Fifth Circuit.”
The panel wrote that it “cannot agree” with that statement even thought it does “admire the district court’s meticulous opinion.”
“A cardinal constitutional principle is that federal power can be wielded only by the federal government,” the court held. “Private entities may do so only if they are subordinate to an agency.”
Because HISA, which operates under the oversight of the Federal Trade Commission, has final say-so over its own rules, the agency is facially unconstitutional, the panel held.
HISA was established by Congress in 2020, in reaction to a “spate of doping scandals and racetrack fatalities.”
Judges Stuart Kyle Duncan, Carolyn Dineen King and Kurt D. Engelhardt sat on the panel.
The National Horsemen’s Benevolent and Protective Association and the other plaintiffs are represented by Daniel Robert Suhr, Jeffrey Jennings and Reilly Stephens of the Liberty Justice Center, Brian Kelsey of Kelsey Firm and Fernando Manuel Bustos of Bustos Law Firm.
The defendants are represented by Pratik A. Shah and Lide E. Paterno of Akin Gump Strauss Hauer & Feld, John Roach of Ransdell Roach & Royse, and Joseph Forrest Busa and Mark Bernard Stern of the U.S. Department of Justice.
The case number is 22-10387.
Editor’s Note: Janet Elliott contributed to this report.