Litigation

Big Business Big Winner in Court Rulings

By Angel L. Reyes, III

I had the privilege of being interviewed by Eric Torbenson of the Dallas Morning News about a discussion held at a continuing education event called the Bench Bar Conference, which was hosted by the Dallas Bar Association. This discussion was on whether the Texas Supreme Court now favors corporate defendants in court rulings.  Although many of my colleagues shared my views, others did not.   I believe the tides have changed, and the Texas Supreme Court caters to big business more often than not.   In fact, data shows that over 87% of the time, the court rules in favor of corporate defendants.  Arguments can be made that this trend is fair and just.  I strongly disagree, and believe that injured parties are receiving biased and unfair treatment by the courts. But you decide for yourself by reading Eric's article in its entirety below.

Critics: Texas Supreme Court favors big business
Court disagrees, pointing out opinions are often divided
08:45 AM CST on Sunday, November 25, 2007
By ERIC TORBENSON / The Dallas Morning News
etorbenson@dallasnews.com

Texas' Supreme Court justices aren't in the habit of defending their judicial records, much less from lawyers grilling them as they would an uncooperative witness.

But that's just what happened in September at a continuing education event at Horseshoe Bay Resort hosted by the Dallas Bar Association, where lawyers peppered two justices with questions about their impartiality.

Sample query: Do the justices hunt for plaintiff victories in appeal courts just so they can overturn them?

"To be honest, I've never seen anything quite like that in a bar group," Justice Paul Green told Texas Lawyer magazine after the event.

The incident has added fire to a decade-long debate over whether Texas' highest court favors big business in lawsuits.

The perception is bolstered by data showing that the court's rulings increasingly favor defendants in lawsuits - upward of 87 percent of the time, one study said.

However, the court's public information lawyer, Osler McCarthy, cautions that viewing the court isn't as simple as counting up the wins and losses of a football team.

"In any given decision, a win for a plaintiff - whether it's a corporate plaintiff or an injured person - may involve a development in the law that actually favors the other side," he said.

"The court exists to assure that Texas law is uniform and to decide among 14 courts of appeals that often rule differently what the law should be, not whether X number of defendants win."

Still, a few recent rulings have stood out for some academics and plaintiffs' lawyers as judicial activism in favor of big business.

In one case, they complain, the court seemed to cherry-pick state laws to find a way to give a property owner the same protections from an injured worker's lawsuit that a contractor has compared with an employer. The worker, hired by a contractor, was injured in a plant owned by Entergy Gulf States.

"It's just another door closing for folks who are injured - at this point, it wasn't even that surprising," said Angel Reyes, a Dallas injury attorney who says workers' rights have eroded steadily in the state over the last three decades. "The Texas Supreme Court has made the climb to get relief so steep here that unless you have wrongful death and negligence, it's nearly impossible to make a case."

Not all lawyers agree, of course.

"It's a reasonable ruling," said David A. White of Thompson & Knight in Dallas, who handles complex insurance matters. "I don't think it's a sweeping ruling - it gives clarity to owners of property by extending the benefits of being a general contractor in these kinds of situations."

For a long time, Texas had a reputation as a haven for large plaintiff verdicts. But recent tort reform has taken much of the vigor from plaintiffs' lawyers.

Some call the Entergy ruling a low water mark.

"I'd say that right now Texas is on the forefront of the business-friendly legal environment," said Rogge Dunn at Clouse Dunn Khoshbin LLP in Dallas, who handles some workers' compensation cases. "If you're an insurer here or a large company getting sued, you've got the Supreme Court as your safety net."

Handling civil matters

The Supreme Court is the last court of appeal in the state for civil matters; the Texas Court of Criminal Appeals handles criminal matters.

The nine Supreme Court justices are elected on a rotating basis statewide for six-year terms. All are Republicans. Three are up for re-election next year.

Alex Winslow of Texas Watch is tracking the court's rulings for its 2006-07 term, as he has for the last decade.

By his count, civil defendants won favorable rulings in a relatively equitable 52 percent of cases in the court's 2000-01 term, but the number has been soaring since then. In 2005-06, 82 percent of rulings went in favor of defendants, he said.

"This is an anti-consumer court," he said.

He called the Entergy ruling "egregious" because he thinks the court hunted for a way to rule for the company.

The Entergy ruling ignored the Legislature's previous actions on the issue that were pro-worker. A ruling the previous week involving another energy company cited legislative intent, Mr. Winslow said, "making them unbelievably inconsistent, except for the fact that the energy company won both times."

But Mr. McCarthy disputes the notion of a Republican court following a Republican agenda.

The cases that critics point to as showing the court's bias often are split 5-4 and feature vigorous dissents, Mr. McCarthy notes. "If the court is seen as moving in lockstep to favor one side or the other, logic would insist that it would, well, move in lockstep."

In a separate study, law professor David Anderson of the University of Texas at Austin found 87 percent of lawsuit defendants received favorable rulings in the 2004-05 term.

"I've heard from a lot of lawyers who told me they're glad someone is saying what they're not able to say," he said.

Whether the bias issue will come up in next year's elections isn't for him to say. "I'm a scholar, not a politician."

Court's 'activism'

What's especially galling to critics of the court is what they see as the court's "activism," a complaint more common from conservative politicians against liberal judges on social issues.

In an antitrust lawsuit, Harmar Bottling Co. alleged that Coca-Cola Co. tried to drive Harmar, based in Paris, Texas, out of business in Texas and Oklahoma.

Writing for a 5-4 majority, Justice Nathan Hecht overturned Harmar's jury award, writing that Texas' antitrust law doesn't apply in other states and that Harmar hadn't proved damages in Texas.

The dissent from Justice Scott Brister called the decision unprecedented and argued strongly that Texas law applied throughout the case.

Critics have focused on Justice Hecht, who accepted $16,000 in contributions from Houston home developer Bob Perry's political action committee to help defray costs related to a judicial ethics investigation, as The Dallas Morning News reported in April. The contribution was made as the court was about to hear a case related to Perry Homes.

The conflict prompted Dallas attorney Ben C. Martin to file a motion Sept. 12 asking four justices - including Chief Justice Wallace Jefferson - to recuse themselves from the medical malpractice case he was bringing against Columbia Medical Center of Las Colinas.

The case involved a plaintiff who had died from a drug overdose. Mr. Martin cited Mr. Anderson's research showing the preponderance of defendant verdicts; the court, minus the recused justices, denied the motion nine days later.

"The court is changing law that's been around for 150 years, and they're changing it for good," Mr. Martin said. "Once people and voters realize what's happening here and see the derogation of the process, I believe they'll finally get what the court is doing."

THREE CASES

These Texas Supreme Court rulings in favor of businesses have been some of the most talked about in the legal community recently.

Entergy Gulf States vs. John Summers
Mr. Summers injured himself at Entergy's Sabine Station plant while he worked for a contractor hired by Entergy. Along with his worker's compensation claim, he tried to sue the utility for negligence. The Supreme Court overturned an appellate ruling in his favor, establishing that Entergy - the "premises owner" - also qualified as a "general contractor" and hence was immune from the injury suits.

Harmar Bottling vs. Coca-Cola
Harmar, a Royal Crown Cola distributor based in Paris, Texas, alleged that Coca-Cola tried to drive it out of business by establishing preferential agreements with grocers in nine Texas counties and three Oklahoma counties. A jury awarded Harmar $16 million in damages and attorney fees, but the Supreme Court ruled that the state's antitrust law doesn't apply in other states and that Harmar hadn't proved damages in Texas.

Lamar Homes vs. Mid-Continent Casualty Insurance
Homeowners sued Lamar Homes for cracks in the walls of houses and for foundation problems. Mid-Continent, Lamar's insurer, declined to cover the suit, and Lamar sued, arguing that the work had been undertaken with the intention of doing it correctly, making any defects "accidental" and covered under the policy. Some consumer advocates praised the ruling as helping homeowners in battles with builders, but others predict insurers' higher rates will simply be passed on to homebuyers.

Eric Torbenson

©2007 Angel Reyes
www.ReyesLaw.com

Full post as published by Angel Reyes Blog on November 26, 2007 (boomark / email).