Landmark Campaign Finance Case From the US Supreme Court

This morning, a divided United States Supreme Court struck down 2 U.S.C. Section 441b, a provision of the Bipartisan Campaign Reform Act of 2002 which prohibits corporations and unions from using their general treasury funds to make "electioneering communications," or for speech that expressly advocates the election or defeat of any candidate. The statute defines an "electioneering communication" as any communication in any medium that refers to a clearly identified candidate for Federal office and comes within 30 days of a primary election. We'll have a detailed summary and analysis of the 183 pages of opinions as soon as possible.

California Court of Appeal Limits Insurers' Liability When Insureds Misrepresent Medical History

The California Court of Appeal issued a decision yesterday, Nieto v. Blue Shield of California Life and Health Ins. Co., (No. B214669), limiting insurer's liability exposure when insureds make false representations about their medical history on applications. The opinion also has broad implications for all litigants, as it addresses when multiple motions for summary judgment may be made.

The Nieto court concluded Insurance Code sections 331 and 359 allowed Blue Shield to rescind a policy after the insured denied having medical issues despite seeing a doctor for chronic back problems 17 times within four months, including the day she signed her application, as well as having prescriptions for 10 medications and undergoing two steroid injections during the previous year. The insured unsuccessfully argued that summary judgment was foreclosed by Ticconi v. Blue Shield of California Life & Health Ins. Co. (2008) 160 Cal.App.4th 528, which held Insurance Code sections 10113 and 10381.5 prevent an insurer from raising a fraud defense if the insurance application is not attached to or endorsed on the policy when it is issued. The Court of Appeal, relying on a Supreme Court decision not cited in Ticconi [Metzinger v. Manhattan Life Ins. Co. (1969) 71 Cal.2d 423], held section 10113 does not apply when the insurer seeks rescission after an insured makes material misrepresentations. It agreed with the trial court's assessment that neither section 10113 nor section 10381.5 precluded Blue Shield from rescinding the policy based on undisputed facts showing the insured's representations were fraudulent and deceitful. Indeed, section 10113 explicitly states that it applies in the absence of fraud. This appellate panel refused to apply Ticconi as a blanket preclusion to rescission when the insurer does not physically attach an application containing misrepresentations or omissions to the policy. Moreover, the Court of Appeal noted the insured's fraud extended beyond her application. Finally, it rejected the insured's reliance on Hailey v. California Physicians' Service (2007) 158 Cal.App.4th 452, which prevents health care plans that are governed by the Knox-Keene Act from engaging in postclaims medical underwriting; the court found Hailey inapplicable because Blue Shield was an insurer and, further, that the insured had no evidence to establish postclaims underwriting took place.

The appellate court also held that Blue Shield's second motion for summary judgment was procedurally proper. It noted that the trial court specifically denied the prior motion because the plan failed to address the fraud issue. Thus, when the plan filed the second motion and contended plaintiff's fraud entitled the plan to judgment, the appellate court concluded the trial court properly entertained the second motion to address a new legal theory. As a second ground to reject the insured's asserted procedural infirmities, the Court of Appeal found the record supported the trial court's inherent power to revisit whether fraud allowed the plan to argue for the contract's rescission.

The Fourth Circuit Explains Twombly and Iqbal

Last month, the Fourth Circuit offered an important explanation of Federal pleading standards, as set forth by the United States Supreme Court's landmark cases, Bell Atlantic Corp. v. Twombly, 550 US 244 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009). Francis v. Giacomelli, 588 F.3d 186 (4th Cir. 2009) was an outgrowth of the firing of the Baltimore Police Commissioner and two senior deputies by the Mayor. Following the termination, the Mayor sent police to the Commissioner's office to retrieve the officers' badges, firearms, computers, and other official property. In addition to pursuing a state court suit, the officials sued in Federal court, purporting to state claims for unreasonable search and seizure and deprivation of due process. The Commissioner and one of his deputies, who were African American, also alleged racially motivated termination.

Affirming the district court's judgment of dismissal under Twombly and Iqbal, the Fourth Circuit explained that Federal court had never really followed a pure notice pleading standard. Although notice is the primary aim of proper Federal pleading, a motion to dismiss also tests the legal sufficiency of the complaint. A complaint's legal sufficiency is subject to more stringent standards found in Rules 8 through 11 and 12(b)(6). According to the court, the Supreme Court has responded to the problems of strike suits and frivolous litigation by increasing the emphasis on these tools for assessing the sufficiency of a claim. The court found that plaintiffs' constitutional claims were not plausible, pointing out that a reasonable explanation for the Mayor's actions, based upon the facts pled, was the government's interest in terminating the plaintiffs' employment and reclaiming government property. The court also affirmed dismissal of the racial discrimination claim, noting that the Caucasian deputies had been treated the same way as the African American plaintiffs.

The Fourth Circuit's decision represents a new weapon for defense counsel seeking to terminate vague and speculative complaints without undergoing the expense of discovery. Unfortunately, the Twombly-Iqbal regime may ultimately be short-lived. Bills are currently pending in both the House (HR 4115) and Senate (S 1504) to overturn the Supreme Court's decisions. Both bills have so far received a generally favorable reception in Congress, and the plaintiffs bar is making a major effort to push them to passage. Whether that will be achieved now that an election year has begun remains to be seen.

Supreme Court Will Decide Test for Corporate Citizenship

Several decisions coming this term from the United States Supreme Court will generate extensive publicity in the non-legal press. However, perhaps the most important case for the day-to-day functioning of the Federal courts may pass almost unnoticed outside legal circles.

Friend v. Hertz Corporation is a putative class action, filed in the fall of 2007, alleging that Hertz violated California's wage and hour laws. Hertz timely removed the action from California state court to federal court pursuant to the Class Action Fairness Act. Plaintiffs moved to remand, arguing that although Hertz' corporate headquarters is in New Jersey, the company is a citizen of California under Ninth Circuit law. The district court granted plaintiffs' motion, and the Ninth Circuit affirmed.

Hertz petitioned for certiorari, pointing out that the circuits are badly split on the proper test for determining a corporation's "principal place of business" pursuant to 28 USC 1332(c)(1). The Ninth Circuit applies a "place of operations" test, ignoring the corporate headquarters and considering facts such as the location of the company's plants, employees, sales outlets and assets. The Third Circuit applies the "center of corporate activities" test, looking to the place where the corporation's day-to-day activity and management is centered. The Seventh Circuit applies the "nerve center" test, asking merely where the "brain" of the corporation is located. Finally, the Fifth, Sixth, Eighth, Tenth and Eleventh Circuit's apply a "totality of the circumstances" test, considering the character, business purpose, nerve center, management center and general operations of the corporation. The Supreme Court granted certiorari earlier this year.

In its briefing, Hertz relied on two principal arguments. First, Hertz argued that the language and structure of Section 1332 dictated that a corporation's "principal place of business" for diversity and citizenship purposes must be its headquarters. Hertz pointed out that the Ninth Circuit's test required a statewide aggregation of plants, employees and sales outlets, but the statute refers to the principal "place" of business, not the "state." Second, Hertz argued that both the statute and judicial economy and efficiency required a clear and easily administered rule. As a practical matter, large corporations seldom change their headquarters, while the Ninth Circuit's market-based test is highly fluid, depending on conditions in the marketplace from one year to the next.

In opposition, plaintiffs argued that by pointing to a corporation's "principal" place of business, Congress necessarily required that a comparison be made. If Congress had intended to say "headquarters," it would have simply said so. Besides, plaintiffs argued, the purpose of the statute was to prevent corporations who did most of their day-to-day business in a given state from litigating in Federal court; the Ninth Circuit's practical test best served that purpose, in plaintiffs' view. Plaintiffs also challenged Hertz' argument about the need for a simple test, claiming that district courts are frequently called upon to apply factually complex tests, such as domicile, personal jurisdiction and standing.

The Court heard argument in Friend in early November. In its argument, Hertz pointed out that under the Ninth Circuit's test, a major national corporation could be sued in the city where its headquarters was located, and successfully remove to federal court - surely a counter-intuitive result. Justice Kennedy pointed out that not all diversity suits involve major law firms with the resources to litigate factually complex questions, suggesting the need for a simple, black-letter test.

The justices appeared somewhat skeptical of plaintiffs' position. Justice Sotomayor posed Hertz' argument, asking whether, if Congress intended an aggregation of factors, the statute wouldn't call for a corporation's "principal state of business." Justice Ginsburg pointed out that since California is the most populous state in the country, the Ninth Circuit's test would necessarily mean that most national corporations are California citizens. Chief Justice Roberts followed up on Justice Ginsburg's point, asking where Starbucks' citizenship lies under the Ninth Circuit's test. Plaintiffs' counsel responded that the Ninth Circuit has recently ruled that Starbucks -- despite its heavy corporate identification with Washington -- is a California citizen. Both Justice Ginsburg and Justice Stevens seemed sympathetic to the view that a simple test of citizenship is preferable. It seems likely that the Supreme Court -- probably with few or no dissenters -- will hold that a corporation's headquarters is presumptively its principal place of business, subject to a plaintiff's showing that the headquarters is a sham.

California Supreme Court Update Re Pending Cases

The California Supreme Court's website is a veritable goldmine of information. Unfortunately, it's not organized in a way that allows lawyers and clients to easily track issues the court has accepted for decision. We were the first site that regularly provides comprehensive and up to date information on all civil cases. Appellatestrategist.com has organized the pending issues according to subject matter. We will update periodically, as new reviews are granted, or opinions issued on old ones. Hope it's useful.

(Updated through 3/5/10)

Employment – Compensation & Benefits
Employment – Other
Insurance
Torts & Products
ADR
Attorney-Related
Damages
B & P 17200/Class Actions/Commercial
Civil Procedure/Evidence/Discovery
Environmental
Civil Rights
Taxation and Assessments
Other

Texas Supreme Court Update Re Pending Cases

Appellatestrategist.com has organized the pending issues mentioned on The Texas Supreme Court's website according to subject matter for quick reference. We will update this information periodically, as new reviews are granted or opinions are issued. Hope it's useful.

Alternative Dispute Resolution
Commercial Law
Constitutional Law
Consumer Protection
Contracts
Employment
Family Law
Governmental Immunity
Healthcare
Insurance Matters
Intentional Torts
Judicial Administration
Jurisdiction
Juvenile Law
Local Government
Negligence
Other Issues
Products Liability
Public Utilities

Appealing From Rulings Under California C.C.P. 1008

After receiving word that a motion did not reach the "right" result, parties often return to the same judge with a request to reconsider the adverse ruling. In California, motions for reconsideration are governed by the parameters set out in Code of Civil Procedure section 1008. Reconsideration is not available, however, when a judgment has been entered. (See e.g., Betz v. Pankow (1993) 16 Cal.App.4th 931, 937-938.)

Recently, the Court of Appeal, Fourth Appellate District, Division Three, addressed a trial court's jurisdiction to entertain a motion for reconsideration following the denial of a motion seeking relief from a default judgment. (D.R.S. Trading Company, Inc. v. Barnes (2009) 180 Cal.App.4th 815.) Preliminarily, it agreed with the Betz line of authority that holds section 1008 does not provide litigants with an alternative ground to challenge a judgment on its merits and, thus, entry of judgment presented a jurisdictional bar to reconsider the merits of the entered judgment (or any interim rulings subsumed within that judgment). Nonetheless, the D.R.S. Trading court concluded a trial court had jurisdiction to entertain a motion to reconsider the denial of a motion for relief from a default judgment. The critical distinction, the appeals court found, rested with the fact that the reconsideration challenge was not to the merits of the judgment, but rather to the post-judgment request for relief.

This decision also serves as a reminder to use caution when filing notices of appeal from section 1008 rulings. Remember that California Rules of Court, Rule 8.108(e), extends the time to file a notice of appeal from an order made under a timely section 1008 motion for reconsideration. But if a court enters judgment before ruling on a pending motion for reconsideration, that motion does not extend the time to file an appeal. (Safeco Ins. Co. v. Architectural Facades Unlimited, Inc. (2005) 134 Cal.App.4th 1477, 1482.) And if the situation is like that presented in D.R.S.Trading, where the section 1008 ruling, not the merits of the underlying judgment, is being challenged, the entry of judgment is not a relevant consideration.

Circuit Split Over Enforcement of Arbitration Provisions in International Insurance Contracts

Several states have statutes making arbitration provisions in insurance contracts unenforceable. These statutes "reserve preempt" the Federal Arbitration Act under the McCarran-Ferguson Act, which provides that any "Act of Congress" shall not be construed to interfere with state regulation of the business of insurance. In a recent case, the Fifth Circuit considered whether this reverse preemption applied to an international arbitration agreement governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

In Safety National Casualty Corp. v, Certain Underwriters at Lloyds, London, 587 F.3d 714 (5th Cir. 2009), the Fifth Circuit, in an en banc opinion, held that a treaty such as the Convention was not an "Act of Congress" and hence not reverse preempted. The court rejected the argument that the Convention was not a self-executing treaty and required an Act of Congress, the Convention Act, to become effective. The court reasoned that it was the terms of the Convention itself that conflicted with the statute in question.

The Safety National case declined to follow Stephens v. American Intl. Ins. Co., 66 F.3d 41 (2nd Cir. 1995) where the Second Circuit held that the Convention Act was the relevant consideration and was reverse preempted by the McCarran-Ferguson Act. This sets the stage for a possible Supreme Court resolution. In the meantime, the enforceability of arbitration provisions in international insurance agreements in the face of hostile state legislation remains an open question in most of the country.

Appeal Despite Remand: The City of Waco doctrine

A prior post described situations where an order remanding a case to state court may be reviewable despite the strong statutory language seemingly foreclosing such review. This post addresses a related situation--the possibility of obtaining federal appellate review of pre-remand orders even after the case as a whole has been returned to state court. In City of Waco v. U.S. Fidelity & Guaranty Co. 293 U.S. 140 (1934), the City was a defendant in a personal injury case. It impleaded its contractor's surety. Surety removed the case, contending that the dispute with the city was a "separable controversy" from the underlying action. The underlying plaintiff moved to remand the case to state court, contending that the City’s claim against U.S. F&G was ancillary to, not separable from, the original claim. The district court found that the claim was a separable controversy, but also found that surety was an unnecessary and improper party and dismissed the claim against it. Diversity now being absent, the court remanded the action to state court.

The Supreme Court held that appellate jurisdiction still existed over the order of dismissal because that order preceded the remand and was made at a time when the district court had jurisdiction over the case. Thus, a party can obtain review of appealable orders made prior to the remand to state court. If such an appeal were not permitted, there would be no effective review of the district court's substantive legal rulings. The state court could not review a federal court's determination that a claim or party should be dismissed.

The City of Waco doctrine remains viable but the courts have limited its scope. Recent judicial approaches to the doctrine have emphasized two principle limitations to the doctrine. First there must be a separate appealable order from the remand order. The order may be in the same document as the remand order so long as the order being appealed is analytically prior to the remand---an order reciting that federal claims are dismissed is, for example, logically prior to an order that, in the absence of federal claims there is no basis for jurisdiction. Second, the order may be conclusive as to the parties rights. If the district court's order concerns only the forum in which a claim is to be heard or makes only non-binding jurisdictional findings, no right to appeal exists. For instance, if a defendant asserts federal question jurisdiction by asserting the doctrine of complete preemption a ruling rejecting the claim is not reviewable. No rights of the defendant have been conclusively determined. It is still free to raise preemption as a defense in state court.

City of Waco appeals are relatively rare. Where the doctrine does apply, however, the issues involved may be very important. Since there is no other way to obtain effective review of pre-remand dispositive orders, appellate attorneys should be aware of the doctrine and its uses.

Amidst Judicial Belt Tightening, California Completes Take-Over of County Courthouses

The last California courthouse was transferred to state control on December 29, 2009, completing the process of transferring control and responsibility of all 532 California county courthouses to the state government. This process was designed to create a comprehensive infrastructure program for court facilities statewide, rather then leaving courthouses to the fiscal vagaries of county politics and finances. The repair and restoration of local courthouses has already begun, as many local courthouses were in a state of disrepair. This should also simplify future efforts to secure adequate funding for court facilities, as all such efforts can now be focused on the state government, rather than the 58 county governments that previously controlled the many courthouses.

While California courts continue to struggle for adequate operating funds in light of a seemingly endless state financial crisis, a revenue stream of up to $5 billion from court fees and fines provides funding for 41 new and renovated court facilities. This does not include the new Long Beach courthouse in Los Angeles County, which is being developed under a separate private-public partnership. However, the Judicial Counsel has approved an additional 112 needed projects for which funding has not yet been secured. In a time when all California courts are taking furlough days and/or reducing services in the face of limited budgets, this demonstrates the need for more creative financing arrangements. It also raises the question of whether the income stream now designated for new facilities should be used to support the operation of existing ones.

Recognizing Appealable Remand Orders

It is generally recognized that an order of a federal court remanding a case to state court is not subject to appellate review. The language of 28 U.S.C.§ 1447(d) seems absolute: “an order remanding a case to the state court from which it was removed is not reviewable upon appeal or otherwise…” Yet, the rule is not as absolute as it appears on first blush and several categories of remand orders may be appealed.

First, certain special jurisdictional statutes specifically provide for the appeal of remand orders. The Class Action Fairness Act, for example, allows a removing party to seek an appeal by petition. Certain civil rights statutes, the Westfall Act (governing the immunity of certain federal employees) , statutes dealing with thrift institutions and statutes involving the resolution of land disputes with Indian tribes all contain specific authorization for appeals of remand orders. Second, the Supreme Court has held that 28 U.S.C. § 1447(d) has to be read in conjunction with the preceding subsections which speak of remand due to lack of jurisdiction or a defect in the removal process. Consequently, section 1447(d) precludes appeals only when the underlying order is based on defective removal or lack of jurisdiction. Thermtron Products Inc. v. Hermansdorfer, 423 U.S. 336 (1976). This leaves several categories of orders subject to appeal, such as when the court declines to exercise jurisdiction under one of the abstention doctrines, declines to exercise supplemental jurisdiction over state claims after federal claims are dismissed, or remands a case by enforcing a private agreement such as a forum selection agreement or a service-of-suit clause.

Unfortunately, when jurisdictional and non-jurisdictional grounds are asserted in the same remand motion the resulting order may not clearly state the basis of the court’s decision. Also, the court may err in characterizing a decision as jurisdictional when it is actually based on the exercise of discretion. The Courts of Appeals have struggled with whether they can look behind the language of a remand order to determine the real basis of the district court’s decision. In Powerex v. Reliant Energy Services, Inc., 551 U.S. 224 (2007) the Supreme Court held that a reviewing court must accept the district court’s characterization of a remand order as jurisdictional unless there is no colorable basis for doing so. Consequently it is vital that counsel pay close attention to the wording of remand orders, and to the extent they have input into that wording, to encourage courts to be precise in stating the basis of decision.

Public Utilities

Stranded Costs, Transition to Competitive Marketplace.
Is utility entitled to recover interest on certain “stranded costs” it incurred during transition from land-regulated to competitive marketplace? Is utility permitted to recover a valuation panel fee as an expense? Must new on-site generators of electricity continue to pay utility to offset its stranded costs? State of Texas v. Public Utility Commission, No. 08 0421, formerly 263 S.W.3d 448 (Tex. App.—Austin 2008), review granted 06/19/09, and Texas Industrial Energy Consumers v. CenterPoint Energy, No. 08 1727, review granted 06/19/09.

Products Liability

Causation, Pre-Emption, Safer Alternative Design, Jury Misconduct.
Was claimant required to introduce into evidence at least two statistically significant scientific studies showing that Vioxx more than doubled the risk of heart attack or is evidence from clinical trial sufficient? Did claimant’s expert sufficiently account for alternate causes of account for potential alternate causes of heart attack to support a finding of specific causation? Was the evidence sufficient to show that a “proper” warning of the risk of Vioxx would have changed the physician’s decision to prescribe it? Does the Food and Drug Act pre-empt claims that Vioxx was defectively marketed? Did plaintiff present sufficient proof of a safer alternative design by introducing evidence of a patent application into evidence? Did jury misconduct require a new trial where one of the jurors failed to reveal that he had accepted several interest-free loans from one of the parties? Merck & Co. v. Garza, No. 09 0073, formerly 277 S.W.3d 430 (Tex. App.—San Antonio 2008), review granted 10/23/09.

Seller’s Indemnity.
Were component parts of exterior insulation and finish system a “product” within the meaning of the Products Liability Act? Was an independent contractor a “seller” for purposes of Tex. Civ. Prac. & Rem. Code § 82.002? Was contractor entitled to receive indemnity when its liability to the homeowner arose solely out of contract? Fresh Coat Inc. v. K 2 Inc., No. 08 0592, formerly 253 S.W.3d 386 (Tex. App.—Beaumont 2008), review granted 09/25/08.

Other Issues

Civil Forfeiture.
Did the court of appeals err in determining that the trial court incorrectly disregarded the jury’s findings that currency found in a truck was not contraband where there was no direct evidence linking the currency to any drug transaction? If the currency is not contraband, is innocent bailee of truck where currency was found entitled to currency by right of possession? State of Texas v. $281,420 in U.S. Currency, No. 08 0465, formerly 2008 WL 907565 (Tex. App.—Corpus Christi 2008), review granted 04/17/09.

Lottery, Statutory Construction.
Does Tex. Bus. & Com. Code § 9.406(f), providing for the assignability of “accounts,” including lottery winnings, pre-empt Tex. Govt. Code § 466.406 and 406.410 which prohibit such assignments? Texas Lottery Commission v. First State Bank of DeQueen, No. 08 0523, formerly 254 S.W.3d 677 (Tex. App.—Austin 2008), review granted 09/25/09.

Open Records Act.
Did the court of appeals properly determine that state employee birth date information was not private and was therefore subject to disclosure under the Texas Public Information Act, Tex. Govt. Code § 552.001 et seq.? Was the prevailing party entitled to attorney’s fees as a matter of law? Texas Comptroller of Public Accounts v. Attorney General of Texas, No. 08 0172, formerly 244 S.W.2d 629 (Tex. App.—Austin 2008), review granted 02/27/09.

Negligence

Equine Activity Act.
Do provisions of the Equine Activity Act, Tex. Civ. Prac. & Rem. Code § 87.001 et seq., providing that certain persons are not liable for damages resulting from risks inherent to an equine activity apply to a claim that defendant was negligent in leading plaintiff into a boggy area that frightened the horse? Did the defendant fail to make a reasonable efforts to determine plaintiff’s ability to engage in the equine activity in a safe manner so as to trigger an exception to the protection of the Equine Activity Act? Loftin v. Lee, No. 09 0313, formerly 277 S.W.3d 519 (Tex. App.—Tyler 2009), review granted 10/23/09.

Local Government

Governmental Immunity and Waiver, Declaratory Judgment Act.
Did the Dallas City Charter and/or Tex. Loc. Gov. Code § 51.075 providing that a municipality may “plea and be impleaded in any court” waive governmental immunity? May a municipality who has waived governmental immunity through asserting a counterclaim reinstate that immunity by dismissing the counterclaim? Does the Declaratory Judgment Act permit a suit to determine the party’s rights despite governmental immunity? City of Dallas v. Martin, No. 07 0288, formerly 214 S.W.3d 638 (Tex. App.—Dallas 2006), review granted 10/23/09.

Judicial Review of Education Commissioner’s Decision, Jurisdiction, Necessary Parties.
In a suit to judicially review the decision of a Commissioner of Education pursuant to Tex. Educ. Code § 21.307, is the Commissioner considered a party to the suit who must consent to venue in Travis County? Presidio Ind. Sch. Dist. v. Scott, No. 08 0958, formerly 266 S.W.3d 531 (Tex. App.—Austin 2008), review granted 08/21/09.

Standing, Municipal Propositions.
Did citizens who sponsored a citizen-initiated referendum have standing to seek a declaratory judgment that the proposition is valid and must be enforced? May provision included within the proposition that any taxpayer may maintain an action to prevail expenditures made in violation of a proposition suffice to confer standing? Robinson v. White, No. 08 0658, formerly 260 S.W.3d 463 (Tex. App.—Houston [14th Dist.] 2008), review granted 06/26/09.

Takings, Res Judicata.
Does the finding by the Dallas Urban Rehabilitation Standards Board, subsequently affirmed by a district court, that certain property constituted an urban nuisance, constituted res judicata, precluding a subsequent takings claim? City of Dallas v. Stewart, No. 09 0257, formerly 2008 WL 5177168 (Tex. App.—Dallas 2008), review granted 11/20/09.

Waiver of Governmental Immunity, Bond Contract.
Does section 271.152 of the Local Government Code waive governmental immunity? Does the bond contract in question require the governmental entity to place the bond issue on the next bond election following the contract or is it required to place the issue on all subsequent bond elections until passed? Kirby Lake Development, Ltd. v. Clear Lake City Water Authority, No. 08 1003, formerly 278 S.W.3d 41 (Tex. App.—Houston [14th Dist. 2008), review granted 10/23/08.

Juvenile Law

Prostitution.
May a 13-year-old juvenile be adjudicated delinquent for the offense of prostitution, even though juvenile could not have given valid consent to sexual acts? In re B.W., No. 08 1044, formerly 274 S.W.3d 179 (Tex. App.—Houston [1st Dist.] 2008), review granted 10/23/09.

Jurisdiction

Personal Jurisdiction Over Corporate Officers.
Are corporate officers subject to personal jurisdiction in Texas for claims arising under the Texas Trust Fund Act where officers controlled trust funds intended for payments of persons providing labor or material to Texas construction projects? May Texas assert personal jurisdiction over corporate officers with respect to fraud claim where it is alleged that corporate officers permitted claimant to continue work on project when they knew he would not be paid? Kelly v. General Interior Construction, No. 08 0669, formerly 262 S.W.3d 79 (Tex. App.—Houston [14th Dist.] 2008, review granted 06/05/09.

Judicial Administration

Law of the Case Doctrine, Jurisdiction of State Courts After Removal, Recusal.
Does federal court order establish law of the case with respect to whether remand had properly been carried out? Did appeal of remand order in federal court deprive the state court of jurisdiction? Did judge err in ruling on his own recusal motion when he was referred to hear a recusal motion directed at another judge? Gonzalez v. Gonzalez, No. 08 0961, formerly 267 S.W.3d 556 (Tex. App.—Houston [14th Dist.] 2008), review granted 11/20/09.

Intentional Torts

Conversion, Punitive Damages.
Does probative evidence support the finding that defendant stole 13 cattle? Did evidence support finding that defendant acted with malice under the “clear and convincing standard?” Is award of over $1 million in punitive damages constitutionally excessive in case involving theft of cattle worth approximately $5,000? Bennett v. Reynolds, No. 08-0074, formerly 242 S.W.3d 866 (Tex. App.—Austin 2007), review granted 08/28/09.

Insurance Matters

Assumption of Liability Exclusion.
Where the insured is immune from tort liability as government contractor and the alleged contractual liability mirrors tort liability, does policy’s assumption of contractual liability exclusion apply? Did insurer waive its coverage defenses by associating in the defense of the insured? Gilbert Texas Construction v. Certain Underwriters of Lloyds, No. 08 0246, formerly 245 S.W.3d 29 (Tex. App.—Dallas 2007), review granted 04/17/09.

Mold Exclusion, Expert Qualifications.
Does a mold exclusion in a homeowner’s policy for mold caused by plumbing leak? Was expert relied upon by insured to establish causation qualified and reliable? State Farm Lloyds v. Page, No. 08-0799, formerly 249 S.W.3d 257 (Tex. App.—Waco 2008), review granted 06/19/09.

Worker’s Compensation, Causation, Attorney’s Fees.
Did claimant’s causation expert properly employ differential diagnosis to determine that work-related knee injury was a producing cause of the worker’s death? Did the trial court submit an incorrect definition of “producing cause” by failing to include the concept of “substantial factor?” Does the Texas Constitution guarantee a jury trial on the issue of attorney’s fees in worker’s compensation cases? Transcontinental Ins. Co. v. Crump, No. 09 0005, formerly 274 S.W.3d 86 (Tex. App.—Houston [14th Dist.] 2008), review granted 10/23/09.

Healthcare

Application of Expert Report Requirements.
Does section 74.531 of the Civil Practice & Remedies Code, which requires the production of an expert report in the early stages of a healthcare liability claim, apply to the claims against a water park with respect to the placement of a defibrillator and the device’s use by its employees and to claims that the park’s medical advisor was negligent in failing to provide certain advice and recommendations to the water park concerning the defibrillator? Yamada v. Friend, No. 08 0262, formerly 2008 WL 5583690 (Tex. App.—Fort Worth 2008), review granted 02/13/09.

Attorney’s Fees.
Was physician entitled to award of attorney’s fees pursuant to section 74.351 of the Civil Practice and Remedies Code, permitting an award of fees incurred by the physician in a case where the claimant fails to provide a timely expert report, where the physician’s attorney did not testify regarding the reasonableness of the requested fee? Garcia v. Gomez, No. 09 0139, formerly 286 S.W.3d 445 (Tex. App.—Corpus Christi 2008), review granted 10/23/09.

Constitutionality of Limitations Provision.
Does the two-year statute of limitations for healthcare liability claims in Tex. Civ. Prac. & Rem. Code § 74.251 violate the open courts provision of the Texas Constitution in a case involving a sponge left in a surgical patient? Walters v. Cleveland Regional Med. Center, No. 08 0169, formerly 264 S.W.3d 154 (Tex. App.—Houston [1st Dist.] 2007), review granted 03/27/09.

Constitutionality of Statute of Repose.
Is the two-year statute of repose applicable to health care claims under Tex. Prac. & Rem. Code § 74.051(b) violate the open courts provision of the Texas Constitution? Methodist Health Care System of San Antonio v. Rankin, No. 08 0316, formerly 261 S.W.3d 93 (Tex. App.—San Antonio 2008), review granted 03/27/09.

Expert Reports, Extension of Time.
Was patient entitled to an extension of time to cure deficiency in an expert’s report that failed to state a causal link between the physician’s alleged breaches of duty and the patient’s injury? Samlowski v. Wooten, No. 08 0667, formerly 282 S.W.3d 82 (Tex. App.—Waco 2008), review granted 06/19/09.

Limitations.
Does the “relation back” doctrine apply to save claims against Health Science Center first asserted in an amended pleading where original pleading had only named physician, who was an employee of the center? University of Texas Health Science Center at San Antonio v. Bailey, No. 08 0419, formerly 261 S.W.3d 147 (Tex. App.—San Antonio 2008), review granted 06/26/09.

Governmental Immunity

Availability of Interlocutory Appeal.
Was a private hospital and a resident employed by the hospital entitled to bring an interlocutory appeal of a denial of a summary judgment based upon governmental immunity? Based on the argument that sections 3.12006 and 3.12007 of the Texas Health Code, when did the hospital or government unit and the resident, a government employee for purposes of the governmental immunity defense? Klein v. Hernandez, No. 08 0453, formerly 260 S.W.3d 1 (Tex. App.—Houston [1st Dist.] 2008), review granted 04/17/09.

Inverse Condemnation.
Did state’s easement give it the right to remove soil or did the removal of such soil give rise to a separate inverse condemnation claim, thereby avoiding governmental immunity? State of Texas v. Brownlow, No. 08-0551, formerly 251 S.W.3d 756 (Tex. App.—Houston [14th Dist.] 2008), review granted 08/28/09.

Retroactivity of Statutes.
Did an amendment to Tex. Loc. Govt. Code § 411.034, providing that compliance with the notice provisions of the Texas Tort Claims Act was a prerequisite to subject matter jurisdiction, apply to a lawsuit filed before the amendment’s effective date? University of Texas Southwestern Medical Center at Dallas v. Estate of Arancibia, No. 08 0215, formerly 244 S.W.3d 455 (Tex. App.—Dallas 2007), review granted 06/26/09.

Family Law

Availability of Free Record.
Was petitioner’s due process rights violated when the trial court denied him a free clerk’s record and reporter’s record pursuant to Tex. Civ. Prac. & Rem. Code § 13.003? Did petitioner waive his complaint by failing to raise constitutional arguments at the hearing on his request for a free record? In the Interest of B.G., No. 07 0960, formerly 2007 WL 2713764 (Tex. App.—Tyler 2007), review granted 05/05/09.

Employment

Retaliatory Discharge.
Does the Anti-Retaliation Act, Tex. Lab. Code § 451.003, require a worker to exhaust administrative remedies before filing suit? Travis Central Appraisal District v. Norman, No. 09 0108, formerly 274 S.W.3d 902 (Tex. App.—Austin 2008), review granted 08/28/09.

Sexual Harassment.
Did plaintiff submit sufficient evidence to establish the elements of a sexual harassment claim? Was plaintiff constructively discharged under the facts of the case? Or was the evidence sufficient to support the jury’s finding of malice and a subsequent award of punitive damages against a corporate defendant for failure to properly investigate sexual harassment claim? Waffle House, Inc. v. Williams, No. 07 0205, formerly 2007 WL 290808 (Tex. App.—Fort Worth 2007), review granted 02/13/09.

Contracts

Depository Contracts, Probate Code.
Did bank breach a depository contract as a matter of law when it granted access to an estate’s account to a person presenting false Letter of Administration? Does section 186 of the Texas Probate Code, providing that Letters of Administration are sufficient evidence of the appointment and qualification of a person to serve as representative of an estate, provide a defense to the bank’s actions? Jefferson State Bank v. Lenk, No. 09 0269, formerly 2009 WL 618693 (Tex. App.—San Antonio 2009), review granted 11/20/09.

Parol Evidence Rule, Fraud, Measure of Damages.
Is argument that payment of money, the recovery of which was the only damage sought, was made by entity other than plaintiff an issue of capacity that is waivable if an issue of standing that is not waivable? Was the testimony supporting certain categories of damages inadmissible parol evidence? Did claimant fail to present sufficient evidence out-of-pocket or benefit-of-the-bargain damages? ERI Consulting Engineers, Inc. v. Swinnea, No. 07 1042, formerly 236 S.W.3d 825 (Tex. App.—Tyler 2007), review granted 10/23/09.

Third-Party Beneficiary Status, Consequential Damages.
Did the trial court correctly disregard the jury’s damages findings when plaintiff failed to obtain a finding that it was a party to the agreement? With certain trusts, courts have related to the contractual parties, entitled to enforce the contract of third-party beneficiaries? Under the record, were plaintiffs entitled to recover consequential damages in the form of lost opportunity damages when they did not consider evidence that defendant was aware that plaintiffs could not have obtained financing from other sources? Basic Capital Management v. Dynex Commercial, No. 08 0244, formerly 254 S.W.3d 588 (Tex. App.—Dallas 2008), review granted 04/17/09.

Consumer Protection

Jury Instructions—Mitigation of Damages—Usury—Consumer Status.
Did the trial court correctly submit the issue of causation in its jury instruction? Was lender’s oral agreement to pay delinquent property taxes supported by consideration? Did lender’s agreement to pay taxes amount to the provision of an escrow service thereby conferring consumer status on borrower under the Deceptive Trade Practices Act? Did lender commit usury by sending a demand in the absence of proof the debtor actually received and read the document? American General Finance, Inc. v. Allen, No. 08 0110, formerly 251 S.W.3d 676 (Tex. App.—San Antonio), review granted 02/27/09.

Constitutional Law

Takings, Standing.
Does the operator of non-consent towing and storage facility have a sufficient property interest in the stored vehicles to support a takings claim? May the operator assert a claim under the Declaratory Judgment Act? Are operator’s claims moot since it is no longer licensed to operate a vehicle storage facility? City of Dallas v. VSC, LLC, No. 08 0265, formerly 242 S.W.3d 584 (Tex. App.—Dallas 2008), review granted 10/23/09.

Takings, Breach Access Easements.
Does Texas recognize a “rolling” public beachfront access easement which migrates according to the naturally-caused changes in the location of the vegetation line? Is any such easement derived from common law doctrines or from a construction of the Open Beaches Act? To what extent is a landowner entitled to receive compensation under Texas law where any limitations on the use of the property are affected by a landward migration of a rolling easement? Severance v. Patterson, No. 09 0387, formerly 566 F.3d 490 (5th Cir. 2009), review granted 05/15/09.

Commercial Law

Commercially Reasonable Sales Upon Repossession.
Did the evidence establish that the sale of repossessed vehicles were commercially reasonable under the Uniform Commercial Code § 9.610. Regal Finance v. Tex Star Motors, No. 08 0148, formerly 246 S.W.3d 745 (Tex. App.—Houston [14th Dist.] 2008), review granted 03/27/09.

Alternative Dispute Resolution

Expanded Scope of Judicial Review in Arbitration.
Does the Texas Arbitration Act permit enforcement of a contractual provision expanding the scope of judicial review of an arbitration award? NAFTA Traders v. Quinn, No. 08 0613, formerly 275 S.W.3d 795 (Tex. App.—Dallas 2008), review granted 03/27/09.