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

As 2011 comes to a close, everyone else is doing their year in review editions.

Not to be left out, we at the Appellate Record thought we'd do a comprehensive summary of the significant cases from the Supreme Court of Texas for the year 2011.

Well, not so much. I just got asked the other day for my thoughts on significant cases and developments and the four areas I thought of are listed below after the jump.

In no particular order, they include the statute of limitations, fraud, expert testimony, and Kelo as applied or not applied to pipelines.

Enjoy.

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This is the post where you find out what Justice Scalia has in common with the Mayor of River City, Iowa and how a good amicus brief can buttress an opinion. Read on.

Con Law professors everywhere work themselves into a lather every June, because that is when the Supreme Court seems to always let fly with its blockbuster opinions.

This term was no different. In the dock for the final day of the term was Brown v. Entertainment Merchants Association.  Brown asked the question of whether California could prohibit the sale of certain video games to minors, specifically the really gnarly ones that middle school boys would call "wicked" or "awesome" or whatever the kids are saying these days. The law was aimed at:

'killing, maiming, dismembering, or sexually assaulting an image of a human being, if those acts are depicted' in a manner that '[a] reasonable person, considering the game as a whole, would find appeals to a deviant or morbid interest of minors,' that is 'patently offensive toprevailing standards in the community as to what is suitable for minors,' and that 'causes the game, as a whole, to lack serious literary, artistic, political, or scientific value for minors.'

So can California do that? Or is that like trying to ban Lord of the Flies because Piggy gets whacked?

As it turns out, the Court said that violent video games and Lord of the Flies are constitutionally the same.

After the break a few words about how Justice Scalia did it--with a little help from his amici.

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Remember when George H.W. Bush was the 41st President of the United States? Back when the Warsaw Pact dissolved and the U.S.S.R. became the Commonwealth of Independent States? Back when Pan Am ceased flying?

Well, I do.

(No snarky questions professing ignorance about the Warsaw Pact, if you please.)

I was in my first year at Baylor Law School and trying to master the complexities of Civil Procedure, including the mysteries of International Shoe and "minimum contacts."

And just about the time I thought I had it, Professor Trail smiled that mischievous smile of his and came straight at us with something about a "Stream of Commerce" and Asahi Metal Inustry v. Superior Court. As best I can recall, we were either supposed to elucidate what the law of personal jurisdiction actually was in the wake of Asahi, or else predict who would prevail in a cage match between Justice Sandra Day O'Connor and Justice William Brennan.

The result was predictable confusion--confusion that reached down the ages.

Until today. Professors and law nerds everywhere had the vapors because the Supreme Court of the United States had a chance to clear it all up in J. McIntyre Machinery Ltd. v. Nicastro. After the break, a few words on how end-of-term alphabet soup begat "Son of Asahi."

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So, it's that time of year again, campers. It's the time when all the law nerds gather 'round expectantly and philosophize over the Supreme Court's final opinions of the term. 

And it's no different here at the Appellate Record. We yield to no one in our lack of a rich inner life. 

Lately, the talking heads were all agog about the American Electric Power opinion, how these global warming lawsuits were dead without an "activist court."

But then I read the opinion myself.

After the jump, a word or two about what a mess can be caused by awkward silence. 

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Lest we fall behind with all the Nerdlaw fun and games, I feel compelled to highlight a new opinion that will be of interest to civil and appellate practitioners for its treatment of issues concerning class certification and law of the case. 

The Fifth Circuit recently released Gene & Gene v. Biopay (pdf) in which the Court held that the putative class plaintiff did not get another whack at certifying a class after an interlocutory appeal rejecting their first effort had been remanded for "further proceedings not inconsistent with this opinion." 

The opinion rejecting the second attempt invoked the "law of the case" doctrine providing that “an issue of law or fact decided on appeal may not be reexamined either by the district court on remand or by the appellate court on a subsequent appeal.”  Judge Clement wrote the Court's opinion.

The Court held that the District Court's continuing duty under Rule 23 to assess class certification orders did not trump the court's prior opinion denying class certification after discovery was complete, the issue fully briefed below and appellate resources already expended on the issue:

Discovery was complete when Gene successfully moved for class certification. When this court exercised its discretion and heard BioPay’s Rule 23(f) appeal, both parties had another full opportunity to argue the propriety of the class certification decision. When this court reversed, we held that “the determinative question of whether consent can be established via class-wide proof must, given the particular facts of this case, be answered in the negative. Gene has failed to advance a viable theory of generalized proof” concerning lack of consent. . . . The district court interpreted this language, along with this court’s remand “for further proceedings not inconsistent with this opinion,” as meaning “there is nothing in the opinion to preclude Gene from asserting a viable theory on remand.” . . .

[But] [t]he issue of class certification was expressly decided by this court in BioPay I and “that should be the end of the matter.”

Second, the "new evidence" on which the plaintiff relied was not really new at all and did not justify an exception to the law of the case:

Although BioPay did not produce the FileMaker Pro database in its native format in 2006, BioPay did produce selected screenshot printouts of that database at that time. Gene contends that it “now knows” that “an objective methodology exists to identify all class members who gave their consent” as a result of the disclosure of the database in its native format. But the screenshot printouts of the FileMaker Pro database produced in 2006 show every field needed to determine whether a particular contact may have consented to receive a fax. . . . [E]ven assuming that the “new” theory of identifying class members who did not give their consent to receive a fax is viable, the selected screenshot printouts demonstrate that this theory could have been advanced to the court in BioPay I. . . . [T]he evidence disclosed on remand was not “substantially different” from the evidence disclosed before BioPay I and that the “substantially different evidence” exception to the law of the case doctrine does not apply.

So, like Horton, everyone's favorite elephant, the Fifth Circuit "meant what it said and said what it meant."  District courts and parties must follow the mandate, "one hundred percent."    

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Yesterday, the Fifth Circuit released an opinion of some importance for commercial and intellectual property litigation.  

In MGE UPS Systems Inc. v. GE Consumer Industrial Inc. (pdf), the Court affirmed an injunction against a competitor's unauthorized use of security "dongles" to boot up software necessary to service and calibrate uninterruptible power supplies.  All the underlying damage claims, however, failed.  Judge Garza wrote the Court's opinion.   

The Court held that

1. The Digital Millennium Copyright Act's provisions on circumventing technological measures protecting copyrighted work "prohibits only forms of access that would violate or impinge on the protections that the Copyright Act otherwise affords copyright owners."  You can get a copy of the Act here (pdf) and a summary of it's contents here (pdf).
2. The plaintiffs' claims for damages for copyright and misappropriation of trade secrets claims could not be sustained based upon evidence of the wrongdoer's gross revenues.  

The damages question has the widest application to commercial and intellectual property litigation.   The Plaintiff's "Plan A" failed when it's damages expert was struck and it's lay witness was found to be insufficient to establish a reasonable royalty.  The Fifth Circuit was not asked to review these trial court rulings.  While the statutory and common law claims would have allowed for recovery of the wrongdoer's profits from the violation or misappropriation, all that was left was information concerning the defendant's gross revenues from a variety of businesses. 

This was not enough. Not only is gross revenue not the same as profit, the Court made an "Erie Guess" that Texas would not adopt a comment from the Restatement (Third) of Unfair Competition placing the burden on the defendant to show what was not attributable to the wrong once a plaintiff had placed a gross number in issue. 

Said the Court:

In the only reported Texas case involving the recovery of defendant’s profits for a misappropriation of trade secrets claim, the Dallas Court of Appeals held that although defendant’s profits are a “proper element[ ] of damages in a case involving the wrongful use of a trade secret,” a plaintiff cannot recover damages without offering evidence “to show the actual profit made by [defendant].” Elcor Chem. Corp. v. Agri-Sul, Inc., 494 S.W.2d 204, 214 (Tex. Civ. App.--Dallas 1973, writ ref’d n.r.e.) . . .

* * * 

MGE points to PMI’s total revenue . . . and argues that, under the Restatement, this exhibit satisfies its burden of proof with regard to PMI’s “sales” of providing service to UPS machines. MGE contends that GE/PMI subsequently had the burden of demonstrating which portions of PMI’s revenue were not attributable to the state law claims, which it failed to do. Texas courts have not adopted the RESTATEMENT (THIRD) OF UNFAIR COMPETITION in its entirety and whether § 45’s comment f is controlling in Texas courts is still an open question. . . . The burden-shifting procedures noted in comment f are not included in the first RESTATEMENT OF TORTS, whose definition of and factors used to identify trade secrets are still used by Texas courts. . . . Neither the Texas Supreme Court nor any of the Texas appellate courts have specifically applied comment f to determine a defendant’s profits in a trade secret action. Given that comment f’s standard sets a plaintiff’s burden of proof for trade secret damageslower than the standard applied in Elcor, we conclude that the Texas Supreme Court would not adopt the burden-shifting procedures of comment f.

Watch this space for some further commentary on MGE. 

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A mulligan, in a game, happens when a player gets a second chance to perform a certain move or action. The practice is also sometimes referred to as a "do-over."

--Wikipedia

Alas, dear reader.  Here is where you get to find out what an ERISA geek I am.  I've worked in this area since about 1998, that fateful weekend when I made a note book of all the Supreme Court ERISA cases and studied them.  

'Cuz that's how I roll.

So, imagine how my heart went pitter pat when the Supreme Court released Conkright v. Frommert a few weeks ago and delved into the "abuse of discretion" standard of review for ERISA benefit determinations.

(Just a minute.  I need to take a moment to gather myself.  I'm all verklempt.  Talk amongst yourselves.)

Conkright is a lesson in how loose lips from prior opinions sink ships for clients and counsel looking for legal standard they can follow.  More precisely, it is a lesson in how mushy judicial language and multi-prong balancing tests create problems -- lawsuits born of ambiguity -- that some later court has to clean up.

After the jump, I'll explain why Conkright is an ERISA Mulligan that was needed to clean up its prior, imprecise opinion.  And as a bonus, I'll explain that it's at least the second such Mulligan the Supreme Court has needed in this area. 

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Every once in a while you can learn something really useful from good ol' Judge Per Curiam.  The Supreme Court's recent decision in Wal Mart Stores v. Merrell is just such a case. 

The decedents died from smoke inhalation when their recliner burned.  So obviously, it was Wal Mart's fault  because the damaged floor lamp Wal Mart sold them was the culprit.  Right?  After all, according to the expert "the lamp’s halogen bulb exploded, sending burning glass shards onto the recliner, which smoldered for several hours."

Or maybe the decedents set the recliner alight themselves while smoking the drugs that were found in their system--either with candles or perhaps the "blunts" and  "smoking paraphernalia throughout the house, including ash trays, a bong, and marijuana cigarette butts." 

(Incidentally, did anyone other than me find it amusing that the Supreme Court of Texas found it necessary to drop a footnote to explain exactly what a "blunt" is?  I never saw anything stronger than an aspirin at my High School, but even I found the definition unnecessary and humorous.)

After the jump, a little homily on what this case really teaches us.

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Did you notice when the Fifth Circuit ceased to be?

Let me explain.

No, let me sum up.

The Fifth Circuit ceased to exist for one particular case.  The result was a non-en-banc en banc reversal of the panel opinion, and the non-affirmance affirmance of the the district court opinion. 

I am referring to Comer v. Murphy Oil.  The District Court dismissed the case holding that hurricane victims could not sue the military industrial complex for worsening their hurricane damage by contributing to global warming.

A panel of the Fifth Circuit held, "yes you can."

The en banc court said, "no you can't"

Except it didn't.  Well, kinda.  After the jump, an explanation and a recommendation. 

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Procedure geeks were all a-twitter (again) when the Supreme Court released it's recent Krupski opinion.  And who can blame them?  The Supreme Court construed FRCP 15(c)(1)(C) on when correcting the misnomer of a party will relate back to the filing of an original complaint.

Essentially Krupski sued the marketing affiliate (Costa Cruise) when it was clear she had intended to sue the affiliate that actually operated the boat that tripped her (Costa Crociere).  By the time she got it all sorted out, limitations had run.  The Supreme Court saved her.

Eccitante!  No?

Kevin Russell of the SCOTUS Blog wrote a good summary and I won't repeat it.  But I was wondering about something else. 

I was wondering how a case that is essentially a slip and fall on a cruise ship made it to the Supreme Court of the United States.  I wish I could peer inside the black box of the Supreme Court "cert. pool" to know what made this case rise above other worthy cases that the Court rejected, if only for lack of time.

Justice Sotomayor's opinion says the court "granted certiorari to resolve tension among the Circuits over the breadth of Rule 15(c)(1)(C)(ii) . . . ."  She sets out a footnote of cases far less profound than a magnificent, circuit split.  Then she explicitly disavows any warranty of the extent to which they conflict, saying "We express no view on whether these decisions may be reconciled with each other in light of their specific facts and the interpretation of Rule 15(c)(1)(C)(ii) we adopt today."

So . . . "tension?"  That's enough?  Or is this different because it is a rule of procedure?  Absolute uniformity is more important with procedure and tension will suffice?  You SCOTUS wonks out there who have any thoughts feel free to weigh in.  I'm genuinely curious if this fits in any pattern or is just an outlier that the court reached out to grab. 

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I can no longer find the quote, but I heard it said somewhere that the definition of a "legal fiction" is "something only a lawyer could believe."  I could not avoid that impression upon reading Salazar v. Buono (pdf), decided Tuesday by the Supreme Court of the United States. 

At issue?  According to Justices Kennedy and Alito: two lengths of four inch pipe, painted white and arranged in the shape of a cross, erected 10 miles from the nearest highway in a portion of the Mojave desert owned by the federal government that exceeded the combined area of the Nation's five smallest states and that was "likely . . . seen by more rattlesnakes than humans." The pipe sparked four lower court opinions to the effect that such pipes "establish" a religion, which, once established could not be cured by Congress passing a law to transfer the land into private hands for continued maintenance as a monument to "the Great War."

Why?  According to Justice Scalia: Because Mr. Buono was "deeply offended by the display of a Latin Cross on government-owned property" but had "no objection to Christian symbols on private property."

Hemmed in as they were by Mr. Buono's first final judgment, for which Supreme Court review was never sought, the Supreme Court could not reach the merits of whether such a display "established" a religion or whether Mr. Buono's "deep offense" was a sufficient injury to "make a federal case" out of it.  Nevertheless, the Court devoted 71 pages of judicial contretemps in six opinions concerning whether Mr. Buono's Constitutional right not to be "deeply offended" survived the Congressional transfer of the land to the Veterans of Foreign Wars. 

And they remanded to the District Court for further proceedings on the transfer of the land with the lengths of four inch pipe.

Now, don't get me wrong.  I don't discount real establishment clause issues as unimportant or simplistic.    I was at just such an argument the very day this case came out.  But is Buono how we should be expending our judicial resources as Plaintiffs or as Defendants or as Courts?  Especially in a case where no Establishment Clause precedent is even possible?

Chief Justice Roberts' concurring opinion said it best.  This is not surprising, because it was also the shortest.  I reproduce it here in full:

At oral argument, respondent’s counsel stated that it “likely would be consistent with the injunction” for the Government to tear down the cross, sell the land to the Veterans of Foreign Wars, and return the cross to them,with the VFW immediately raising the cross again. Tr. of Oral Arg. 44. I do not see how it can make a difference for the Government to skip that empty ritual and do what Congress told it to do—sell the land with the cross on it. “The Constitution deals with substance, not shadows.” Cummings v. Missouri, 4 Wall. 277, 325 (1867).

(Emphasis added).

For all the post-opinion-learned-head-cogitation on my television, there is very little "there" there.  Whether one's own culture war scruples emphasize "establishment" or "free exercise," the substance of those protections is cheapened for both sides when the alleged injury and the substantive controversy are something only a lawyer could believe. 

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Sometimes I sits and thinks.

And sometimes I just sits. 

Since the Supreme Court of Texas released Del Lago Partners v. Smith, I've been sitting and thinking and thinking.  And when I do it, I start to sound like a toddler.  All I can ask is "why?"

Not that the opinion is wrong, mind you. I take it for granted that it is correctly decided.  As Chief Justice Phillips used to say, "We are not final because we are infallible; we are infallible because we are final."

I just wonder why the Supreme Court of Texas is getting involved in a bar fight with drunken fraternity boys if it is not going to lay down a rule of law that can be applied to future cases.  This is sort of the opposite of the "Chuck Norris Theory" of Supreme Court Jurisdiction. 

After the jump, some rambling prose on why cases like Del Lago Partners aren't the highest and best use of judicial resources for a court with discretionary jurisdiction.

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If you are an appellate lawyer in a law firm, then you're probably treated like the "Shell Answer Man."

(Gentle Reader, if you were not born until the late '70s, this is a pop culture reference to a Shell Oil Company advertising campaign from the time before "Reality Television."  Bear with me.)

You know what I mean.  People avoid that big room with the shelves and shelves of books with a quick trip to the office of the appellate lawyer.  The questions can be practical"

• Can I remove a claim involving _______?
• Do you know of a case on ______?
• How do I preserve error when ____?

They can also be terrifying.

How many times, dear colleagues, has the clever lawyer (often with dollar signs in the eyes) come to your office and asked:

Can I [Fill In The Blank With Random, Incredibly High Risk Gambit With infinitesimally Low Probability Of Potential Reward That Will Likely End In Disaster]??

I often answer this question with a question:

Why would you want to?

The corollary to this question, often by the same lawyer is:

Do I have to [Fill In The Blank With Low Risk, Widely-Accepted Manner Of Doing Things That Would Avoid Vagaries In The Law That Said Lawyer Wants To Exploit For Potential Gain]?

This question is also often answered with a question:

Why wouldn't you do it that way?

After the jump, a primer on the antidote to such temptations, what my mentor, Lori Gallagher, called the "sleep at night" school of practicing law.

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The year 1999.  You're an appellate lawyer in a silk stocking firm in Houston, Texas.  You hear someone running toward your office door.  The door bursts open to reveal a trial lawyer, pupils dilated and sweat beading on his forehead. 

His client, Mega Co., just had a hearing on its 5000 page motion for summary judgment (that the trial lawyer insisted on drafting himself) and lost.  A fact question.  Who knew?

Now they are set for trial in a month but he vowed to Mega Co.'s CEO that they were going to stop the trial and appeal "all the way to the Supreme Court."

That's why he came to see you.  "I want you to handle the appeal."  He feels like he's offering you a plum piece of work that will keep you fully and lucratively employed for some time to come.

You invite him to sit down, perhaps offer him a beverage, before informing him that you will not be handling the appeal because there is nothing to appeal.

There is no appeal from an interlocutory order denying the garden variety summary judgment.  Everybody knows that.

"But this is truly extraordinary," he says.  "What about one of those mandamus things?"

After ascertaining that the only thing extraordinary about this proceeding is that this trial lawyer prefers not to lose, you answer, "No.  A denial of summary judgment is not reviewable by mandamus."  Everyone knows that, you add to yourself. 

Flash forward a decade, and the answer is not so clear.  But it is not nearly as murky as some folks complain.  You just have to understand the Chuck Norris exception to restrictions on mandamus review.

After the jump, my own take on why the Supreme Court of Texas is like Chuck Norris when determining whether mandamus should issue because appellate remedies are inadequate. 

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I love old cases. There is nothing better than a dusty case from a creaky, leather-bound book to demonstrate, “I’m not only correct now. I have been correct for 120 years.”

So imagine how my pulse quickened when I read Don Cruse’s summary of TXI Transportation v. Hughes (pdf) on the Supreme Court of Texas Blog in which the Supreme Court held that repeated references to the defendant's immigration status constituted harmful error.

The quotation Don excerpted from the opinion contained this little gem in the middle of a string cite:

. . . see also Moss v. Sanger, 12 S.W. 619, 620 (Tex. 1889) (“Cases ought to be tried in a court of justice upon the facts proved; and whether a party be Jew or gentile, white or black, is a matter of indifference.”) . . . .

Eighteen Eighty Nine! That’s string cite gold!

After the jump, see the story behind this old case and learn why you ought to be proud of your Supreme Court of Texas.

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In the first post on this topic, I set out the basics of the Supreme Court's recent opinion in Hertz Corp. v. Friend (pdf).  In the second post, I stuck my nose in and graded Justice Breyer's legal writing, rewriting the opinion and reducing its length by about 25%.  In this post, your humble servant gives a hypothesis on how four words could become so confusing. 

In 1958, Congress defined a corporation’s citizenship as the state of its incorporation as well as the state where it had its “principal place of business.” Although those four words do not appear unduly complicated, a half century later there was no clear test for what those words meant, and the leading treatise on Federal Practice and Procedure had to devote 73 footnote-encrusted pages to elucidating what those words meant. And the differences between the circuits were not so much a “circuit split” as a “circuit mashup.”

So how do we get to such a state, where lower courts are all over the map and such a key statute goes a half century in need of construction? Well, some would blame the limitless ingenuity of defense lawyers trying to get to federal court. 

Being a defense lawyer of limitless ingenuity who is fond of federal court, I reject such an insinuation. I will blame the judges. 

But don’t worry. I have Judge Posner on my side. After the jump you’ll see how judges think and why oversight of judicial decisions promotes administrative clarity.

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The Fifth Circuit let go a blast of new opinions this morning.  As always you can check the RSS feed from the Fifth Circuit in the sidebar of the blog.

Several of the new opinions have potential application to the civil practitioner:

• Sullivan v. Leor Energy LLC (pdf) affirms dismissal under Rule 12(b)(6) and involves application of the statute of frauds to an executive compensation dispute under theories of breach of contract, quantum meruit, unjust enrichment, fraud, equitable and promissory estoppel, and “detrimental reliance."  Judge Owen wrote the opinion.
• Schexnayder v. Hartford Life And Accident Co. (pdf) affirms the summary judgment granted to an ERISA claimant seeking disability benefits.  Judge Prado wrote the opinion.
• In Price v. Johnson (pdf) the Fifth Circuit held it lacked jurisdiction to review an order of remand.  The district court had remanded on the ground that a claim for pre-suit discovery under TRCP 202.1 was not a "civil proceeding" and was not removable.  Judge Reavley wrote the opinion.
• In Acevado v Allsups Convenience Stores Inc. (per curiam) (pdf) the Court held that mass joinder of employees in a claim under the FSLA was improper, but that the district court should not have dismissed the entire action for misjoinder. 
• Catlin Syndicate Ltd. v. Imperial Palace of Mississippi Inc. (pdf) involves the computation of business interruption damages.  Judge Prado wrote the opinion. 
• Pendergest-Holt v. Lloyds  (pdf) involves an expedited appeal from a preliminary injunction requiring the insurer to defray defense costs.  Judge Higginbotham wrote the opinion and affirmed the injunction as modified.

And if all that is not enough appellate goodness for you, then check out Anna Christensen's summary on SCOTUSblog about updates to the SCOTUSwiki concerning the Supreme Court's most recent opinions and the causes granted for certiorari review last week. 

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In a prior post, I suggested that if the practice of law were a high school, then appellate lawyers are the chess club.  This post draws another, equally compelling parallel:

If the practice of law is the world of sport, then trial lawyers ought to be soccer players. Instead, many of them act like NFL football players, and they are doing themselves no favors. 

After the jump, see why trial lawyers who want to succeed on appeal need to be more like soccer players by "preserving harm"* in addition to preserving error.

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On February 23, 2010, law professors and Fed Court wonks the world over were observed in giddy and somewhat unseemly displays of enthusiasm for the Supreme Court’s opinion in Hertz Corporation v. Friend (pdf). Allow me to join the fray, because it is not often that federal practitioners get a new case necessitating republication of an entire volume of Federal Practice and Procedure.

In Hertz, the Court held that you can chuck volume 13F of Wright and Miller (really, go ahead) because a corporation is deemed to be a citizen of the state where it is incorporated as well as state where the boss’s office or the “nerve center” is located.

After the jump, analysis, the court’s holding, and a challenge. 

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