In this edition of Litigation Roundup, Southwest Airlines’ attorneys get a temporary stay of an order that they undergo religious liberty training, the Texas Supreme Court declines to grant Harris County emergency relief in its lawsuit over a new law that abolishes the county’s office of election administration, and the full Fifth Circuit revived a lawsuit brought by female Dallas County jailers alleging sex discrimination.
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Liberty County District Court
Judge Finalizes Sam Houston Electric Coop Win Against Capital Credits Class Claims
A class action that’s been ongoing since the summer of 2016 accusing Sam Houston Electric Cooperative of failing to return capital credits and violating its own governing documents had been brought to an end.
Sam Houston had argued the plaintiffs had no grounds to bring suit seeking to recoup hundreds of millions of dollars for both the alleged failure to retire capital credits and for funds the cooperative had allegedly wrongly paid out in executive compensation since its inception in 1938.
The litigation saw two appeals and an order compelling the class claims to arbitration.
Mark Whittington presided over the arbitration and issued a decision Feb. 24 siding with Sam Houston and dismissing the class action, finding the claimants “have no private right of action as individuals to sue for immediate payment of capital credits, statutory excess revenues or to sue for alleged mismanagement of the cooperative.”
“Under Texas law, to bring a class action pursuant to Rule 42 of the Texas Rules of Civil Procedure, a claimant must first establish individual standing,” Whittington wrote. “Here, claimants lack standing to bring a class action with respect to the claims alleges. Further, even if standing were to exist, the claimants are not similarly situated and there is an inherent conflict with the proposes class. Some of the claimants are current members of the cooperative, some are past members and some were never members at all.”
District Judge Chap B. Cain III signed off on the order Aug. 10.
The class claimants are represented by Nomaan Husain and Josh Leske of Husain Law.
The case number is CV1510279-A.
Northern District of Texas
Southwest Gets Temporary Administrative Stay of Judge Starr’s Contempt Order
U.S. District Judge Brantley Starr has granted Southwest Airlines’ request for an administrative stay of his contempt order directing attorneys for the airline undergo religious liberty training for 30 days while an appeal to the Fifth Circuit proceeds.
In the Aug. 17 order, Judge Starr gave Charlene Carter — a flight attendant who alleged she was discriminated against on the basis of her religion after sending anti-abortion messages to her union president, including one calling her “despicable” for participating in the Women’s March in D.C. — until Thursday to file a response.
“The court will promptly rule on the motion after briefing is complete,” the electronic order reads. “If the court denies Southwest’s request for a stay, Southwest may use any remaining time in the 30-day administrative stay to seek a stay from the Fifth Circuit.”
A jury sided with Carter in 2022, and Judge Starr ordered she be reinstated to her former job. On Aug. 7 Judge Starr granted Carter’s motion for sanctions against Southwest, agreeing the legal team had failed to notify flight attendants that the law forbids employment discrimination on the basis of religion.
“It’s hard to see how Southwest could have violated the notice requirement more,” Judge Starr wrote. “… In the universe we live in — the one where words mean something — Southwest’s notice didn’t come close to complying with the Court’s order.”
Southwest’s directive to flight attendants said the court had ordered the airline to inform its employees that it “does not discriminate” against employees on the basis of religion and sent a separate memo to flight attendants “stating that its employees must abide by the types of policies over which Southwest fired Carter and that it believed its firing of Carter was justified because of those policies.”
Judge Starr ordered three Southwest attorneys — Kerrie Forbes, Kevin Minchey and Chris Maberry — to undergo religious liberty training from The Alliance Defending Freedom.
Carter is represented by Matthew B. Gilliam of the National Right to Work Legal Defense Foundation and Bobby G. Pryor and Matthew D. Hill of Pryor & Bruce in Rockwall.
The trial court case number is 3:17-cv-02278 and the case number on appeal is 23-10836.
Texas Supreme Court
Justices Won’t Pause Law Impacting Harris County Election Administration
In an order issued Tuesday morning, the justices declined a request for emergency relief from Harris County in its fight with the state of Texas over a newly passed law, S.B. 1750, that abolishes the county’s election administration office.
The justices set the case for Nov. 28 oral arguments.
A Travis County district judge had sided with Harris County and issued an injunction that temporarily blocked SB 1750 from going into effect. That prompted the Texas attorney general’s office to lodge a direct appeal to the Texas Supreme Court, and Harris County subsequently filed for emergency relief with the justices.
Texas argues that its direct appeal to the Texas Supreme Court supersedes the trial court’s injunction.
The county has refused to abolish the office and argued that without emergency relief it was unclear what impact the new law, which goes into effect Sept. 1, would have on the Nov. 7, 2023, election.
Harris County Attorney Christian Menefee issued a statement Tuesday morning that he was “disappointed” with the Texas Supreme Court’s decision, writing that the court “is quietly allowing the legislature to illegally target Harris County.”
“It was on the Texas Supreme Court to rein in these bad-faith lawmakers,” his statement reads. “The court failed Harris County residents.”
Harris County is represented by Wallace B. Jefferson and Nicholas Bacarisse of Alexander Dubose & Jefferson and Christian D. Menefee, Jonathan Fombonne, Neal Sarkar and Matthew Miller of the Harris County attorney’s office.
Texas is represented by special counsel Susanna Dokupil and assistant attorney general Christina Cella.
The case number is 23-0656.
U.S. Court of Appeals for the Fifth Circuit
En Banc Court Sides with Female Dallas County Jailers
The full Fifth Circuit on Aug. 18 did away with 30 years of precedent that limited employment discrimination claims under Title VII to only those stemming from “ultimate employment decisions” such as hiring, firing, granting leave, promoting and compensating, and has revived a lawsuit brought by female jailers in Dallas County.
The jailers are challenging as discriminatory a policy that allowed only male jailers to have full weekends off while female jailers could have one weekend day and one weekday off.
“For almost 60 years, Title VII has made it unlawful for an employer ‘to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his [or her] compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin,’” the majority wrote. “Despite this broad language, we have long limited the universe of actionable adverse employment actions to so-called ‘ultimate employment decisions.’ We end that interpretive incongruity today.”
In August 2022 a three-judge panel had affirmed dismissal of the lawsuit brought by nine jailers, led by Felesia Hamilton, but lamented that it was bound by precedent and wrote that the case was an “ideal vehicle” for en banc review of the issue. In October the court voted to rehear the case en banc.
Judge Edith Jones authored a concurrence, joined by Judges Jerry E. Smith and Andrew S. Oldham arguing that the court’s precedent did not need to be overridden to reach the correct result of remanding the case back to the trial court for further development.
“But this does not satisfy the present-minded majority, who decry and apparently annul our ‘atextual’ 30-year string of precedents,” she wrote. “The question left hanging by the majority is what kind of ‘term or condition’ of employment creates an actionable Title VII discrimination claim.”
Judge Jones called the majority’s holding “incomplete” and pointed to two reasons why.
“First, it leaves the bench, bar, and employers and employees with no clue as to what this court will finally declare to be the minimum standard for Title VII liability,” she wrote. “Second, I disagree with the majority’s claim to a ‘textual’ reading of Title VII that purports to eschew materiality as a necessary basis of employer liability.”
Judge James C. Ho authored his own concurrence, responding directly to the concurrence authored by Judge Jones and the main criticism there that the majority left unanswered questions in its holding.
“When longstanding precedent conflicts with plain text, we have to decide what’s more important: Restoring the text? Or resolving every unanswered question that restoring the text might present, before we do so?” he wrote. “It’s a choice we must make, because overturning atextual precedent can raise a number of unanswered questions. But the existence of unanswered questions should not stop us from restoring text and overturning precedent.”
Dallas County is represented by its assistant district attorney Jason G. Schuette.
The jailers are represented by Jay E. Ellwanger of Ellwanger Henderson and Madeline Meth and Brian Wolfman of the Georgetown Law Appellate Courts Immersion Clinic.
The case number is 21-10133.
Panel Reverses Qualified Immunity Dismissal in Excessive Force Suit
A man who filed suit after a police officer allegedly assaulted him in his front yard will get another chance to pursue his excessive force suit against the San Benito Police Department, a panel determined Aug. 15.
The trial court had granted the police department summary judgment on grounds of qualified immunity and dismissed Ricardo Sauceda’s lawsuit.
Sauceda had a documented history of disputes with his neighbors across the street, according to the opinion, and cops responded to a call from the neighbor in June 2015 that Sauceda “made rude comments and gestures” from across the street.
The officer, Hector Lopez, spoke to the neighbor and then walked across the street to talk to Sauceda. Problems began when Sauceda refused to provide the officer with his identification, told him he needed a warrant and turned to go inside his home.
The officer pushed open the gate and followed after Sauceda.
“I am coming after you, brother,” Lopez allegedly said. “You’re going to come with me, brother.”
Lopez allegedly took Sauceda, a disabled 55-year-old man, to the ground and handcuffed him. The parties dispute whether Lopez also used his baton to strike Sauceda during the struggle. Sauceda was charged with numerous crimes but all of them were dismissed by the Cameron County district attorney.
The panel wrote that Sauceda had raised “genuine issues of material fact as to his claim for false arrest against Lopez.”
“Yet having found that the acts constituting resisting arrest or assault on a public official occurred after the arrest, and viewing the facts in the light most favorable to Sauceda, Lopez did not have probable cause to enter Sauceda’s property to execute a warrantless arrest,” the panel wrote. “Because Lopez did not have probable cause to arrest Sauceda for resisting arrest, the district court’s provision of qualified immunity to Lopez on this basis must be reversed.”
Judges James L. Dennis, Catharina Haynes and Chief Judge Priscilla Richman sat on the panel.
Sauceda is represented by Katie P. Klein and William Daniel Mount Jr. of Dale & Klein in McAllen.
San Benito is represented by J. Arnold Aguilar of Aguilar & Zabarte in Brownsville.
The case number is 19-40904.
Judge Kacsmaryk Must Recalculate $40M Restitution Order
U.S. District Judge Matthew Kacsmaryk was told by the Fifth Circuit in an Aug. 16 opinion that he must recalculate the amount of restitution owed by Steven Anthony Reinhart, the former director of Reagor Dykes Auto Group’s legal and compliance department, to include only losses that are directly attributable to his actions.
Reagor Dykes owned and operated multiple auto dealerships in West Texas but was outed for fraudulent conduct in 2018 by Ford Motor Credit Company after it failed to produce $40 million of collateralized inventory at a surprise audit.
Criminal charges followed, and Reinhart cooperated with the government, pled guilty to “misprison of wire fraud” and agreed his sentence could include restitution to victims of the fraud. On appeal, he argued the $40 million in restitution he was ordered to pay accounts for the fraudulent activity of other Reager Dykes employees that he knew nothing about.
The panel first agreed with Reinhart that this narrow appeal was allowed under the plea agreement and also agreed that the restitution order holds Reinhart financially responsible for losses that weren’t caused by his “offense of conviction” as required under the law.
“Reinhart began working for RDAG in March 2014. But it is not clear when the fraud at RDAG began or when Reinhart began participating in the fraud,” the panel wrote, criticizing a lack of specificity in the pre-sentence report. “… Thus, we cannot discern from the record evidence if the restitution order impermissibly included amounts for losses that were caused by conduct that occurred prior to Reinhart’s offense, the amount of any such losses, and whether such losses were recouped or not.”
Judges Patrick E. Higginbotham, James E. Graves Jr. and Dana M. Douglas sat on the panel.
The government is represented by Amanda R. Burch and Brian W. McKay of the U.S. Attorney’s Office for the Northern District of Texas.
Reinhart is represented by Aaron Ray Clements of Lubbock.
The case number is 22-10103.
U.S. Court of Appeals for the Federal Circuit
Haynes Boone Gets Win for Orthofix in Patent Fight
A win at the Patent Trial and Appeal Board that was issued in early 2022 in favor of Haynes Boone client Orthofix was recently affirmed by a panel of federal circuit judges.
Spine Holdings had sued Orthofix, a medical device company, in 2020 accusing the company of infringing two spinal-fusion related patents that Spine Holdings acquired a year earlier. The PTAB found that those two patents were invalid.
The PTAB decision was affirmed 16 months later by the federal circuit, solidifying the cancelation of those patents.
Judges Sharon Prost, Evan J. Wallach, and Raymond T. Chen sat on the panel that issued the Aug. 11 ruling.
Spine Holdings is represented by Jorge Miguel Hernandez, David W. Carstens and Brian Andrew Carpenter of Carstens, Allen & Gourley.
The case number is 22-1731.