In this edition of Litigation Roundup, the Texas Supreme Court answers two certified questions from the Fifth Circuit, and a plaintiff who saw her $222 million jury award canceled abandons her appeal.
The Litigation Roundup is a weekly feature highlighting the work Texas lawyers are doing inside and outside the state. Have a development we should include next week? Please let us know at tlblitigation@texaslawbook.net.
Northern District of Texas
Judge Kacsmaryk Rules in Favor of DOL’s ESG Investing Rule
U.S. District Judge Matthew Kacsmaryk on Friday issued a ruling in favor of the Department of Labor in a lawsuit challenging the agency’s rule that allows for the consideration of “environmental and social governance and related nonpecuniary factors” when evaluating investment options.
A group of more than two dozen states, led by Utah, had argued in a January 2023 lawsuit that the rule violated both the Administrative Procedure Act, the Employee Retirement Income Security Act and undermined “key protections for retirement savings of 152 million workers.” In particular, the plaintiffs alleged the rule ran afoul of ERISA by permitting fiduciaries to “make investment decisions on the basis of any factor other than the economic interest of the plan.”
“Plaintiff’s interpretation of ERISA would demand arbitrary randomness to choose between such investment options,” Judge Kacsmaryk wrote in rejecting that argument. “It embodies the wooden textualism that courts should endeavor to avoid. ERISA does not require such capriciousness. A fiduciary has acted in full accord with his ERISA duty of loyalty when he chooses between investment options that all are valid options because they each maximize the beneficiaries’ financial benefits.”
In his initial ruling, Judge Kacsmaryk determined the rule, promulgated in 2022, did not run afoul of “the then-binding Chevron deference standard.” The Fifth Circuit remanded the case back to him last year so he could consider whether the U.S. Supreme Court’s ruling in Loper Bright changed the analysis.
“The 2022 rule does not permit a fiduciary to act for other interests than the beneficiaries’ or for other purposes than the beneficiaries’ financial benefit,” Judge Kacsmaryk wrote. “For that reason, under the Loper Bright standard, it is not contrary to law.”
The litigation was led by Utah and joined by Texas, Virginia, Louisiana, Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Idaho, Iowa, Kansas, Kentucky, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, Tennessee, West Virginia, and Wyoming. Other plaintiffs include Liberty Energy, Liberty Oilfield Services and the Western Energy Alliance.
Utah and the other states are represented by their respective attorneys general.
The Department of Labor is represented by Cassandra Snyder of the Department of Justice.
The case number is 2:23-cv-00016.
First Court of Appeals, Houston
Plaintiff Whose $222M Verdict Was Axed Fails to Appeal
Kelli Most, who was awarded $222 million in a wrongful death lawsuit by a Fort Bend County jury after her husband was killed on the job, will not fight a panel’s May 2024 ruling that vacated the ruling and dismissed her case.
In October, the First Court of Appeals denied Most’s request for en banc reconsideration. In November and again in December she sought and was granted extensions to file a petition for review with the Supreme Court, but according to court records she did not file by the Jan. 17 deadline.
Most had argued that the appellate court panel’s decision to side with Team Industrial Services, dismiss the appeal and vacate the award on grounds that Texas was an inconvenient forum was “literally unprecedented.”
The panel determined the lawsuit should have been litigated in Kansas, where Most and her husband Jesse Henson lived and where he died in an on-the-job incident at coal-fired power plant Jeffrey Energy Center. The forum non conveniens ruling came after Team Industrial Services, a Sugar Land-based company, had unsuccessfully attempted pretrial to get the appellate court to move the suit out of Texas courts.
“Until now, no Texas appellate court has ever ordered dismissal for forum non conveniens after an unsuccessful mandamus proceeding and after a trial on the merits,” Most argued in seeking en banc reconsideration. “If left uncorrected, the impact of the panel’s grievous errors will extend far beyond this case, threatening unsustainable confusion on a host of issues throughout trial courts in ten counties — if not more broadly. It need not be so. The court should grant reconsideration en banc.”
The case received significant amicus attention.
Team Industrial is represented by Russell Hollenbeck, Brian J. Cathey and Michael J. Adams-Hurta of Wright Close & Barger, Wallace B. Jefferson, Robert B. Dubose and William J. Boyce of Alexander Dubose & Jefferson and Eileen F. O’Neill and Paul Smith of Ware, Jackson, Lee, O’Neill, Smith & Barrow.
Most is represented by Daryl L. Moore of Ahmad Zavitsanos & Mensing, S. Scott West of The West Law Firm, and Jason A. Itkin, Andrew R. Gould, Brian M. Christensen and Cory D. Itkin of Arnold & Itkin.
The case number is 01-22-00313-CV.
Fifth Court of Appeals, Dallas
Dallas County Prevails in Budget Appeal
In a case that pitted the Dallas County Commissioners Court against the county’s juvenile probation department, the Fifth Court of Appeals recently determined the commissioners won’t have to face a lawsuit over its decision to eliminate salary increases for those who work in the Dallas County Juvenile Department.
The panel issued its 14-page ruling on Feb. 11, holding Dallas County District Judge Eric V. Moyé should have granted the commissioners’ plea to the jurisdiction.
“Through this lawsuit, the Juvenile Board seeks to force the Commissioners Court to pay money that was eliminated from the fiscal year budget; the Juvenile Board does not merely seek the release of withheld money in a reserve,” the panel explained. “Because the Juvenile Board seeks to recover money eliminated from a budget after the budget year has ended, we conclude its claims for declaratory judgment and injunctive relief only seek retrospective monetary relief. … We grant the Commissioners Court’s plea to the jurisdiction as to the Juvenile Board’s claims for declaratory judgment and injunctive relief that seek retrospective relief.”
According to the opinion, the Commissioners Court refused to approve the juvenile board’s budget and salary increases until the board agreed to hand over treatment records for juvenile detainees. The Commissioners requested the data after allegations surfaced that some children were being confined in cells for 23 hours a day.
That prompted the Juvenile Department to file suit. Chad Baruch of Johnston Tobey Baruch, who represented the Commissioners, issued a statement that the ruling will allow “for the Dallas County Commissioners Court to retain its authority over budgetary decisions in accordance with Texas law.”
Justices Emily Miskel and Maricela Moore Breedlove sat on the panel, along with Judge Barbara Rosenberg, who sat by assignment.
The Dallas County Commissioners Court is represented by Chad Baruch and Randy Johnston of Johnston Tobey Baruch.
The Dallas County Juvenile Probation Department is represented by Brian N. Hail of Kane Russell Coleman Logan.
The case number is 05-24-00151-cv.
Texas Supreme Court
Environmental Group Dealt a Loss in LNG Permit Fight
The Texas Commission on Environmental Quality received a favorable ruling from the Texas Supreme Court on Friday in a fight over the issuing of a permit to construct an LNG plant.
Last February, Fifth Circuit Judges Jacques L. Wiener Jr., James E. Graves Jr. and Dana M. Douglas sent the following certified question to the Texas Supreme Court:
- Does the phrase “has proven to be operational” in Texas’s definition of “best available control technology” codified at Section 116.10(1) of the Texas Administrative Code require an air pollution control method to be currently operating under a permit issued by the Texas Commission on Environmental Quality, or does it refer to methods that TCEQ deems to be capable of operating in the future?
The panel also withdrew the court’s November 2023 opinion that had found the TCEQ applied its own administrative policy inconsistently when it approved emissions permits for a natural gas plant in Port Arthur and vacated the TCEQ’s order.
The nonprofit group Port Arthur Community Action Network was challenging TCEQ’s decision to issue a permit to Rio Grande LNG, a facility which has been approved but not yet constructed, that capped two types of emissions at lower levels than what the Port Arthur permit allowed.
Chief Justice Jimmy Blacklock authored the court’s 14-page opinion. Justices Evan Young and James P. Sullivan did not participate in deciding the case.
“The parties, as well as several helpful amici, have provided briefing and argument, for which we are appreciative,” Chief Justice Blacklock wrote. One of the amicus briefs came from the governor of Texas in support of TCEQ and was signed by then-general counsel James P. Sullivan.
Russell Post and Parth S. Gejji of Beck Redden authored an amicus brief on behalf of the Texas Oil & Gas Association, which also threw its support behind TCEQ. And Winston & Strawn lawyers Michael J. Woodrum and Jonathan D. Brightbill represented the U.S. Chamber of Commerce in a third amicus brief, also in support of TCEQ.
The Texas Supreme Court determined that “previously issued permits are not determinative of BACT in the way the power plant’s opponents have suggested in this case.”
“A previously permitted emissions level for one facility is neither necessary nor sufficient to establish [best available control technology] for other, similar facilities,” the court held.
The Port Arthur Community Action Network is represented by Colin Cox of the Environmental Integrity Project in Austin and Natasha Bahri, Amy Dinn and Chase Porter of Lone Star Legal Aid.
TCEQ is represented by Erin Snody and Jessica Ahmed of the state attorney general’s office and Toby Baker of the TCEQ.
The case number in the Texas Supreme Court is 24-0116. The case number in the Fifth Circuit is 22-60556.
Justices Define Contours of Defamation Law
A former student of the Southwestern Baptist Theological Seminary who alleges the school failed to protect her from sexual assault and defamed her received a favorable ruling from the Texas Supreme Court on Friday that may revive her lawsuit.
In May, Judges Carolyn Dineen King, James C. Ho and Kurt D. Engelhardt of the U.S. Court of Appeals for the Fifth Circuit sent the certified question to the Texas Supreme Court, explaining that it needed the state court’s input before analyzing one statement Jane Roe alleges the seminary’s former president, Leighton Paige Patterson, made in a donor letter that he did not sign but that she alleges is vicariously responsible for.
The letter stated her “allegations of rape were false” among other statements Roe alleges were defamatory.
The questions were:
- Can a person who supplies defamatory material to another for publication be liable for defamation?
- If so, can a defamation plaintiff survive summary judgment by presenting evidence that a defendant was involved in preparing a defamatory publication, without identifying any specific statements made by the defendant?
Justice Jane Bland authored the court’s 12-page opinion.
“First, a person who supplies defamatory material to another for publication may be liable if the person intends or knows that the defamatory material will be published,” she wrote. “Second, a plaintiff may survive summary judgment without identifying the specific statements the defendant made in supplying the defamatory material if the evidence is legally sufficient to support a finding that the defendant was the source of the defamatory content.”
U.S. District Judge Sean Jordan had granted summary judgment to SBTS and Patterson in 2023, prompting Roe’s appeal in May of that year.
Roe is represented by Sheila P. Haddock of Zalkin Law Firm in San Diego.
Patterson is represented by Travis Jones and James Grau of Grau Law Group.
Southwestern Baptist Theological Seminary is represented by Bryan Rutherford and David Macdonald.
The case number in the Texas Supreme Court is 24-0368. The case number in the Fifth Circuit is 23-40281.
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