Texas Supreme Court Orders and Opinions (12/19/14)

In its last weekly order list of 2014, the Supreme Court of Texas issued opinions in four cases, granted the petitions for review in two cases, issued a revised opinion in one case, and dismissed the petition as improvidently granted in one case that had been argued. Access the complete order list here.

The Court will be closed on December 26, so the next regularly scheduled order list will be issued on January 2, 2015.

The Court issued the following opinions:

No. 13-0435, City of Houston v. Carlson - This is an inverse-condemnation suit brought by a group of condominium owners after they were forced to vacate their homes by a city order. In a prior suit, the owners obtained a permanent injunction finding that they had been evicted without due process of law and allowing them to re-enter. The owners then brought this suit seeking damages for lost use for the time they were kept out of their properties. In an opinion by Justice Brown, the Court held that the owners did not have a viable takings claim, and dismissed the case for lack of jurisdiction. The Court reasoned that the owners were not asserting a regulatory taking because they were not complaining about the substantive standards that the city applied to the housing project. Instead they were only complaining about the process through which the standards were enforced. Justice Willett (joined by Justice Divine) wrote a short concurrence to point out that although the city had prevailed on the takings claim, it “acted rather shabbily towards its citizens.” Click here for the majority opinion and here for the concurrence.

No. 13-0537, In re State Board for Educator Certification - This mandamus proceeding presented a fairly narrow question: did the trial court abuse its discretion in refusing to allow the Board to supersede the trial court's judgment pending appeal? The trial court's judgment reversed the Board's decision to revoke a teacher's certification. The trial court refused to allow the Board to supersede that judgment pending appeal. In an opinion by Justice Willett, the Court found that the trial court did not abuse its discretion. The majority reason that the states right to supersede a judgment without a bond did not abrogate the trial court's discretion to refuse to allow supersedeas of a non-monetary judgment under Texas Rule of Appellate Procedure 24.2(a)(3). Justice Guzman (joined by Justice Brown) wrote a concurring opinion. Justice Guzman noted that the trial court might have abused its discretion by failing to properly balance the interests at issue. But because the Board did not challenge the trial court's exercise of discretion, arguing only that the trial court did not have any discretion, Justice Guzman concurred in the Court's judgment. Click here for the majority opinion and here for the concurrence.

No. 13-0686, Thompson v. Texas Department of Licensing and Regulation - In a per curium opinion, the Court held that the Department committed an error of law when it reversed an administrative law judge's determination that an applicant for a tow-truck operator license with a criminal conviction had shown evidence of rehabilitation. Based on the applicant's conduct while in prison and since his release and on letters of support filed on the applicant's behalf, the ALJ determined that evidence of the applicant's rehabilitation and rehabilitative effort while incarcerated weighed in favor of granting the license. The Department reversed, holding that the applicant's continued insistence that he was innocent was evidence that he was not rehabilitated. The Supreme Court held that the term “rehabilitation” is. It defined in the applicable statute and that confession of guilt was not within the plain meaning of rehabilitation. Click here for the opinion.

No. 13-0907, Richmont Holdings, Inc. v. Superior Recharge Systems, LLC - In a per curiam opinion, the Supreme Court held that the court of appeals erred in finding that the defendant waived the right to enforce an arbitration clause in the parties' agreement. The defendant had (1) filed suit; (2) moved to transfer venue of a related suit; (3) failed to respond to discovery requests; and (4) delayed in moving to compel arbitration. The Supreme Court found that this conduct "do not approach a substantial invocation of the judicial process." The Court reiterated that the burden to show waiver of an arbitration clause is a high one and held that the court of appeals misapplied the Court's holding in Perry Homes v. Cull, 258 S.W.3d 580 (Tex. 2008). Click here for the opinion.

The Court issued a revised opinion in No. 11-0425, Petroleum Solutions, Inc. v. Head. Our prior coverage of this opinion is here. The Court did not change its judgment. The email from Osler McCarthy (the Court's staff attorney for public information) indicates that the new opinion includes substantial editorial changes, updated citations, a new footnote 6, and a new section II.C. Access the revised opinion here.

The Court dismissed as improvidently granted the petition in No. 13-0967, S.A.S. v. Bryant, which was argued on December 9. Our prior coverage of this case is here (petition granted) and here (oral argument preview).

The Court granted the petitions in two cases and consolidated the two cases for argument. The two cases are No. 14-0122, Life Partners, Inc. v. Arnold and No. 14-0226, Life Partners Holdings, Inc. v. State. The primary issue presented in both cases is whether "life settlement" transactions facilitated by the Life Partners entities are "securities" under the Texas Securities Act. The Life Partners entities describe "life settlement" transactions as "the sale of an existing life-insurance policy to another party. ... By selling the policy, the policyholder receives an immediate cash payment. ... The purchaser takes an ownership interest in the policy at a discount to its face value and receives the death benefit under the policy when the insured dies." In a prior case, the Waco Court of Appeals held that these transactions are not securities. In these two cases that Dallas Court of Appeals and the Austin Court of Appeals have held that they are. A secondary issue is whether any decision in these cases that the transactions are securities should be prospective only because the Life Partners entities relied on the prior decision from the Waco court that they were not securities. Argument has been set for January 15, 2015.

Finally, I can't pass up Justice Willett's dissent from the denial of the petition for review in No. 13-0822, Service Employees International Union Local 5 v. Professional Janitorial Service of Houston, Inc. The issue was whether the defendant's website was "electronic media" for purposes of the statute that allows an interlocutory appeal by "members of the electronic or print media" for orders that burden their free-press or free-speech rights. Justice Willett's dissent starts with a reference to the 80s classic Ferris Bueller's Day Off. Enjoy.

- Rich Phillips, Thompson & Knight