The Appellate Record : Texas Appellate Lawyer & Attorney Kendall Gray for Fifth Circuit & Supreme Court Appeals

Two opinions from The Hon. Justice Per Curiam today at the SCOTX:

• Hidalgo v. Hidalgo applies a procedural mercy rule, to wit, when the SCOTX takes away your lead pipe cinch procedural argument while a case is pending, the CA ought to let you brief your substantive attacks on a judgment rather than finding them waived.
• Texas Health Insurance Risk Pool v. Sigmundik holds that a trial court cannot cut an insurer with a contractual right of subrogation out of a tort settlement by using a bench trial to allocate all the funds to other parties to the claim--here the surviving wife and child.  The essence:

It was improper to cut the Risk Pool out of a settlement to which it, through the estate, has a valid claim, just as it would be an error to cut out any other estate creditor or recipient in this situation. As in all cases tried to the bench, the trial court was authorized to decide disputed issues of fact and law, see TEX. R. CIV. P. 262, however, a trial court abuses its discretion by failing to follow guiding rules and principles.
* * *
The Risk Pool provided extensive medical records and testimony to support both the expenses it requested and the damages suffered by Sigmundik; that evidence was uncontroverted. Even Sigmundik’s wife testified that his injuries—for which the Risk Pool could seek recovery—amounted to “[e]xceedingly more than” one million dollars. In short, there was evidence that the damages to Sigmundik exceeded the amount of the $800,000 settlement. There can be no doubt that all of the parties here—Sigmundik’s wife and children, but also Sigmundik himself (and thus his estate)—suffered substantial injuries. Trial-court discretion is not boundless and cannot insulate a decision to allocate none of the $800,000 settlement to Sigmundik when the court knew the facts surrounding his severe burns and trauma, his suffering and numerous surgeries, and his death 52 days later.

The Court also granted four petitions for review and indicated argument will be had on a pending petition for writ of mandamus, about which (hopefully) more later.

No conference is set next week so, alas, I guess there will not be a flood of new opinions for the poor sap who has to give the Supreme Court Update next week at the UTCLE Conference on State and Federal Appeals. 

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The Supreme Court released three opinions Monday that would be of interest to civil practitioners:

• American Needle, Inc. v. National Football League (pdf), holding that the NFL and its teams were separate enough to be capable of creating a combination in restraint of trade by the formation of a single entity to exclusively license NFL gear (Stephens, J.).
• Lewis v. City of Chicago (pdf), holding that a plaintiff can bring a disparate impact claim under Title VII when the practice is applied, even if the practice was adopted outside the otherwise applicable limitations period (Scalia, J.).
• Hardt v. Reliance Standard Life Insurance Company (pdf), holding that ERISA allows an award of attorneys fees, even if the party seeking them was not a prevailing party; rather, they need only be a mostly prevailing party (Thomas, J.).

The three cases are a tale of three different federal statutes, to which the Court (of necessity) had to apply three entirely different methods of statutory construction.

Hardt (pdf) involved ERISA, a detailed statute from the early 1970s to which Justice Thomas gave a familiar, modern and literalistic construction to Congress' language:

Whether § 1132(g) limits the availability of attorney’s fees to a “prevailing party” is a question of statutory construction. As in all such cases, we begin by analyzing the statutory language, “assum[ing] that the ordinary meaning of that language accurately expresses the legislative purpose.” . . .  We must enforce plain and unambiguous statutory language according to its terms. . . .
* * *
The words “prevailing party” do not appear in this provision. Nor does anything else in §1132(g)(1)’s text purport to limit the availability of attorney’s fees to a “prevailing party.” Instead, §1132(g)(1) expressly grants district courts “discretion” to award attorney’s fees “to either party."

In contrast, American Needle (pdf) involved the Sherman Act, dating from the dawn of time, containing language so broad that Justice Stevens rightly acknowledged that it could not be construed literally in light of the problems that would follow:

Taken literally, the applicability of §1 to “every contract, combination . . . or conspiracy” could be understood to cover every conceivable agreement, whether it be a group of competing firms fixing prices or a single firm’s chief executive telling her subordinate how to price their company’s product. But even though, “read literally,” §1 would address “the entire body of private contract,” that is not what the statute means.

Finally, Lewis (pdf) involved Title VII.  While Justice Scalia acknowledged that application of Congress' language created "practical problems" and "puzzling results," he stated that it was not the job of the courts to worry about such things:

[I]t is not our task to assess the consequences of each approach and adopt the one that produces the least mischief. Our charge is to give effect to the law Congress enacted. By enacting §2000e–2(k)(1)(A)(i), Congress allowed claims to be brought against an employer who uses a practice that causes disparate impact, whatever the employer’s motives and whether or not he has employed the same practice in the past. If that effect was unintended, it is a problem for Congress, not one that federal courts can fix.

Three statutes and three completely different approaches to statutory construction--all on the same day. 

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**Editor's Note: This is part IV of IV in a series leading up to a presentation on oral argument preparation at the UTCLE Conference on State and Federal Appeals.  Follow the links to read the First, Second and Third parts of the series.**

There is a part of me that really hates oral argument. 

There.  I said it. 

It makes me suspicious that being there "in person," and "who you are" still counts on top of  "what you know" when you are trying to persuade a court to rule in favor of your client.  My paper for the UT Conference on State and Federal Appeals puts it this way:

I have a chip on my shoulder against the “oral argument lawyer.” You know the type: an empty suit whose only merits are that he is tall, dark and handsome with a deep and sonorous voice and a full head of luxurious hair. (This vacuous character usually is a “he.”) I call this type of lawyer a “weatherman,” i.e., one who reads the teleprompter and looks good but who has not studied the legal doctrines and is barely literate on the briefing. For all his faults, a weatherman can still win cases by the power of his personality, even when he should not. As someone who is short, balding and analytical-rather-than-handsome, that kills me.

I'll never be a weather man.  I haven't got the looks or the persona.  But that's OK.  I'd rather be a "real" appellate lawyer.

The one thing that most distinguishes a weatherman, who is just another pretty face, from the "real" lawyer is preparation.  Nothing flashy, but there it is.  Indeed it was preparation that changed a stutterer into the voice that saved the Western World--Winston Churchill in 1940 when England stood alone.  Again from the paper:

Never has the spoken word been used to such great effect; but, Churchill had an inauspicious beginning as a public speaker. He lived in the shadow of a father who was noted in his parliamentary career for giving speeches from memory. So, Winston tried it and failed. Early in his political career, in the middle of a speech on a trade union bill, his mind went blank. He sank to his seat, head in his hands and could go no further.

From that point on, Churchill came to every speech armed with every word that he was going to say, including pauses and notations for “cheers,” “hear, hears” or even “prolonged cheering” and “standing ovations.” He estimated that the preparation of a forty-minute speech took between six and eight hours. He started by dictating to a secretary at a typewriter, the first of several drafts. From there he revised, cut and pasted, until he had it just right. Then, the speech was ready to be set down in what the staff called “psalm form,” the line endings demonstrating the rhythm of the spoken word.

I would say to the House

            as I have said to those who have joined this Government:

                        “I have nothing to offer but blood, toil, tears, and sweat.”

At oral argument, your challenge, in a sense, is even more complicated than Churchill's.  You can't prepare for an uninterrupted speech.  You have to prepare for a score of related speeches to give on the fly while you are subject to cross examination by an audience that may be hostile to your position. 

You have to prepare for that.

Unless you'd rather be a weatherman.

Check out the UT Conference on State and Federal Appeals for great input from the panel on exactly how to prepare for that kind of joust.  The members of the panel, Judge Bill Boyce, Darryl Moore and Jennifer Bruch Hogan, are not weathermen. 

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The Fifth Circuit today released Meaux Surface Protection, Inc. v. Fogleman (pdf), affirming a jury's award of lost profits under Texas law for breach of fiduciary duty.  Meaux complained that two of it's key personnel essentially poached foremen, workers and customers from it in breach of their fiduciary duties to the company.  The jury agreed and awarded $1.43 million in lost profits.  

On appeal, the defendants complained that the District Court had subjected them to trial by ambush.  They were supposedly shocked and amazed that Meaux sought lost profits (having omitted those precise terms from the pretrial order) or that the foreign CFO would testify to establish those damages.  The Fifth Circuit rejected the argument.  Its reasoning emphasized that no real surprise had occurred.  On the contrary, the defendants were trying to use the rules as a trap for the unwary. 

In the two years between filing and trial, defendants obtained discovery and filed motions concerning lost profits. Meaux’s inclusion of lost profits instructions, which the court deemed part of the pretrial order, gave defendants a warning shot across the bow months in advance of trial that this remedy was not abandoned. It is unpersuasive for defendants to say that they believed otherwise, especially when the pretrial order and proposed jury instructions made no reference to other remedies. Defendants repeatedly bewail the “ambush” they suffered when the district court allowed Meaux’s case to proceed. As did the district court, we find such protestations empty and disingenuous. Defendants were not waylaid by guerilla litigation tactics. Being denied the ability to prevail on a technicality is not the kind of “prejudice” we must remedy.

This type of practical reasoning also informed the Fifth Circuit's determination that Meaux had proved its lost profits with "reasonable certainty," any alternative explanations for the loss going only to the weight the jury might give the testimony.  Key to the determination: the profit projections used by Meaux's witness were created by the defendant himself, before he left the company and poached its resources:

The jury heard an estimate from Carsten Ennemann that Meaux had suffered a $2.3 million loss of treasure in 2007 thanks to their employees-turned freebooters. Ennemann was personally familiar with the drop in business suffered by Meaux. Ennemann compared 2007 sales figures for several major clients with the budget projections which were prepared by Fogleman himself before he jumped ship. At trial, Fogleman stood by the projections as reasonable estimates of Meaux’s likely business, taking into account the factors he deemed relevant. Fogleman’s testimony supported Meaux’s case; he was keelhauled by his own windlass. In light of the evidence tending to show that defendants’ acts harmed Meaux, the jury was entitled to find that Fogleman’s and Kotrla’s acts in derogation of a fiduciary duty to Meaux harmed it to the tune of $1.43 million. 

The Fifth Circuit only remanded the case so that the District Court could add in pre- and post-judgment interest, thus granting the Plaintiff a Meaux Bettah' Judgment.

There are several other topics of interest in the opinion that are not touched here, and I commend it to your further study.  Circuit Judge DeMoss, who wrote the Court's opinion, must be a fan of Patrick O'Brien or the Horatio Hornblower novels.  As you can see, the decision between these maritime service providers is up to the gunwales with nautical terms and allusions.

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I wrote here and here about the Conference on State and Federal Appeals on June 3 and 4, as well as my presentation on preparing for oral argument.  Giving a presentation about exactly how and why I do what you do kind of feels like cheating because I wind up learning way more than the group I'm purportedly "teaching." 

One of the lessons I rediscovered was how important it is to take my time when I'm preparing for argument.  The temptation is always there to start creating outlines too soon and figuring out what you're going to say.  This is a mistake.  The first step for preparation that I wrote about in the paper is:

Step One: DON’T Figure Out What You’re Going To Say

I have a paper weight with the quotation, “Good writing is clear thinking made visible.” By the same measure, “Good argument is clear thinking made audible.” One of the biggest temptations in writing a brief is the temptation of writing too soon, before your thinking is clear and before you have a plan. In my view it is the same with oral argument.

There are many hoops to jump through before your thinking is clear enough that you can possibly have any idea what ought to be said. . . .

So, like a good doctor, first, do no harm. Like a good carpenter, measure twice, cut once. Don’t start by trying to figure out what you’re going to say. Get your thinking clear, and do the following steps first.

The rest of the paper is nine steps I use to create and learn all the information I need in a short argument outline.  But none of that creation or learning takes place if I just sit down with pad and paper to "draft" an argument outline from the outset. 

I hope you get to come to the conference and introduce yourself in real life.  UT always puts together a good program, and I know my panel members, Daryl Moore, Jennifer Bruch Hogan,  and Judge Bill Boyce will  have good content on how to get your thinking clear for argument.

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Two new opinions from the Supreme Court of Texas today. 

• Alas, the tow truck driver does not get to keep the large amount of cash found hidden around a suspicious truck's axle, even if his lawyer goes back to his 1L Property notes and pulls out doctrines like "bailment" and "treasure trove" otherwise known as "finders keepers." See State v. $281,420.00 In United States Currency.  But it is kind of cool to see "treasure trove" and "finders keepers" in print.  Justice O'Neill wrote the opinion.
• And yes, a dismissal "with prejudice" really is "with prejudice" even when it ought not to have been so prejudicial.  The DWOP dismissal after a non-suit precludes a later action, even if the trial court should have left well enough alone rather than erroneously DWOP-ing the case.  The judgment, even if erroneous, is not void and protestations that the dog ate it or that one never received the order will not suffice if the judgment has not been set aside.  See The Travelers Ins. Co. v. Joachim.  Justice Green wrote the opinion.  

No more petitions granted in today's orders, and no conference on the calendar next week with much work to be done before the summer dolldrums.  SCOTX needs to find that finishing kick.

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In earlier post I mentioned the paper I am writing on oral argument and the presentation to be given at the UT Conference on State and Federal Appeals held June 3 and 4.  The first part of that paper is about why we hold oral argument at all.  The second part is a blow-by-blow account of how I prepare, as just one suggested method for how to do it well.

As I got down to writing the paper, I noticed something about my method that I had never thought about.  With all the techie tools available to me, my studying is still very 19th Century.  As it turns out, I think that's a good thing:

• My method tends to be very analogue and slow—physically looking at the record or writing certain things in long hand as opposed to using lots of digital tools or applications. 
• My method involves repeated exposure to the same information in different contexts using different, physical senses.
• As a result, my method accidentally incorporates some of the things I learned 30 years ago in my one undergraduate “Educational Psychology” class.

The Ed-Psych researchers that we studied found that repeated exposure to information, using multiple senses to draw relationships and connections was the way to master academic material. So, why not bring those same techniques to bear in “studying” for the oral argument test? 

Just like history class or conjugating French verbs, I literally make flash cards of anticipated hard questions and how I will answer them, flash cards for all the key cases, etc. and then I drill the same as I would for any other "exam."  I physically read the record on paper because it makes a visual imprint.  I say things out loud because hearing helps me remember.  I study as if I will be tested--because I will.  Those folks in the black robes like to ask questions, and I'd much rather have them do so than speechify to a bunch of potted plants.

And I'm sure I'm not the only one that reverts to my school days when preparing.  Help me out.  What are your prep methods that carry over from school?  What is the trick in your tool bag that works best for you?

But if you want my 10 Easy Steps to Making Oral Argument Fun And Simple (and the scintillating discussion of the panel members, Judge Bill Boyce, Jennifer Bruch Hogan and Daryl Moore) you'll have to attend the conference!

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Several new opinions today from the Supreme Court of Texas.  Here's the skinny:

• Yes, you really do have to arbitrate and just because you say it is unconscionable don't make it so.
• No, a police report preliminarily assigning fault for an accident is not "actual notice," which is required for jurisdiction to obtain under the Texas Tort Claims Act.
• No, Texas is not the forum for the world, especially for Australians killed on offshore rigs located near Singapore.
• No, naturally accumulating ice in a Texas parking lot is not an "unreasonable risk of harm" from which a landowner must protect a business invitee.
• Yes, Baylor College of Medicine and its physicians are governmental entities and employees (respectively) when providing charity care at Ben Taub because the Legislature said so. This involves two cases, one with argument and a concurrence, and one PC.  (Full disclosure and shameless plug: The Andrews Kurth Appellate Practice Group represented the defendants in those cases).
• And finally yes, you may have to forfeit your ill gotten gains, in addition to other damages that result from tortious conduct, if you breach your fiduciary duty by fraudulently inducing your partner to a buy out.

Your SCOTX at work!

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On June 3 and 4, UT will hold its annual Conference on State and Federal Appeals at the Four Seasons Hotel in Austin. I'm lucky enough to get to speak at the conference again.

This year, I wanted to take up the topic of oral argument preparation--not the typical "how to argue" topic (listen to the judges, answer the questions, blah, blah blah), but a real nuts and bolts presentation on the steps one goes through from the time one gets the argument setting to the day of argument. 

Joining me for that presentation will be Judge Bill Boyce, Jennifer Bruch Hogan and Daryl Moore, thorough preparers all. 

The paper and the presentation will also try to make the case that oral argument still matters, even in the era where we idealize the legalist, umpire judge who just calls the balls and strikes:

 

            We idealize the judge who is the icy legalist. As Chief Justice Roberts put it during his confirmation hearings, the good judge is merely an umpire who calls the balls and strikes. And this idealized passivity is no new development. The Federalist Papers speak of judges that (unlike the executive or legislative branches) exercise “judgment,” but not “will.”

That kind of judge certainly would never be swayed by the dulcet tones of a mere orator, right?  But are all the questions to be decided truly cold and legal?  And contrast that with the old British system.  It had its drawbacks, of course, but its emphasis on full oral development of the case let the public and the litigants have some level of confidence in the work of the court, which they had themselves observed first hand:

Proceeding orally step-by-step through the case, reading aloud pertinent written material, assures that each one of the three judges is having the same matter put before him and is focusing at the same time on the same facts, issues, and arguments. Three minds are working in harness together, heading toward a collegial decision. The judges' minds are exposed for all the world to see. There is little ground for anyone to doubt that a judge considered every point, because everyone in the courtroom can see whether each judge is listening and participating-as he usually is-or, equally important, whether he is asleep or inattentive.

(quoting Daniel J. Meador, English Appellate Judges From An American Perspective, 66 Geo. L. Rev. 1349 (1977)).

The conclusion I came to (and will demonstrate on the day) is that oral argument very much still counts.  As legalist as we want to believe ourselves to be, there are many legal questions that are not as concrete as doing sums.  Likewise, it is important for the parties and the public to see justice being done, and in appellate cases, that can only happen in oral argument. 

The second part of the presentation is entirely taken up with steps for preparation.  Watch this space for a preview of that, but I'd love to hear from some others.  Feel free to send me an e-mail or leave a comment describing your method for getting sharp in advance of argument. 

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Today, in an appeal  by AT&T and similarly situated carries from a preliminary injunction, the Fifth Circuit found that there was no federal question jurisdiction.  Curiously, the non-federal case arises from a regime set up under the federal Telecommunications Act of 1996.  Even more curious, the complaint, at one time, contained federal antitrust claims, dismissed without prejudice for reasons not stated in the Fifth Circuit opinion. 

As Alice would say, "Curiouser and curiouser."  Curiouser still with the addition of the obligatory, alphabet soup of federal acronyms.

In Budget Prepay v. AT&T, the Court held that the Telecommunications Act of 1966 did not provide for federal jurisdiction because, under the structure of the Act, the construction of interconnection agreements (ICAs) between incumbent carriers (ILECs) and the small, wily, competitive carriers (CLECs) are matters of state law.  The importation, by agreement, of FCC standards into the ICA is still A-OK and does not create an FQ (federal question):

[W]e held in Southwestern Bell that interpretation of the terms of an ICA, even if the ICA terms are intertwined with federal law, is a claim governed by and arising under state law.

* * * 

The fact that the ICA at issue here invokes and incorporates federal law is not to the contrary. As noted above, the Act imposes general duties on ILECs and then fills in the details of enforcement and interpretation with regulations promulgated by the FCC. But the parties are free to negotiate around these statutory and regulatory rules. See 47 U.S.C. § 252(a). The invocation of federal law in an ICA does not turn a contract dispute into a federal question case; rather, it accepts the relevant statutory language or regulation as a binding contract provision in lieu of a privately negotiated provision. . . . The fact that this ICA provision was drawn from 47 U.S.C. § 251(c)(4)(A) and not specifically negotiated does not raise a federal question. It raises an issue of state law contract interpretation.

Judge Clement wrote the opinion. 

To recap: the Federal Telecommunications Act allows ILECs and CLECs to have ICAs with FCC regs from the CFR under authority of 47 USC §§ 251 & 252 without making an FQ under 28 U.S.C. § 1331.

This is "cooperative federalism."  Simple, huh?

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