Features for March 2018

Welcome to the March 2018 edition of the Appellate Lawyer --
the newsletter of the HBA Appellate Practice Section.

by: Justice Evelyn Keyes, First Court of Appeals and Angela Spoede, Staff Attorney

by: Mark Ritchie, Law Office of Mark Ritchie, P.C.

by: David A. Furlow, Co-Chair, HBA Teach Texas Committee

by: Jill Schumacher, 14th Court of Appeals and Adam Schumacher, CISSP, IT Operations & Security at FlightAware, LLC

by: Andrew Nelson, Wright & Close, LLP and Kyle Lawrence, Beck Redden, LLP

by: JoAnn Storey





Practical Legal Reasoning

By Justice Evelyn V. Keyes, Justice, First Court of Appeals, and Angela W. Spoede, Staff Attorney

Legal arguments and reasoning follow a similar path, drilled into aspiring lawyers beginning their first year of law school. In an appellate brief, the lawyer begins by setting out the issue or question to be answered, followed by the governing rule of law. Then comes an analysis, in which the legal standard is applied to the relevant facts of the case, and a conclusion. While this formula is certainly familiar, and it seems simple enough to apply, the reality is that there are numerous pitfalls and byways that can derail the attempt at a sound legal argument. As Plato wrote, “Arguments, like men, are often pretenders.”

Legal arguments must be more than just logically valid. After all, an argument can be valid but still lack the soundness required when applying abstract principles in real-world settings. Legal analysis is complex, requiring the synthesis of general legal principles, specific governing laws, and multiple facts to yield a legally sound and just result.

In legal reasoning and analysis, everything good stems from starting with the “right” question. One of the most frequent problems in appellate briefing is the failure to clearly identify the core issue or issues at the outset, leaving the judge to trudge through pages of briefing without knowing what she is looking for. Lawyers can also derail their legal argument from the very beginning by misidentifying the key issue or, worse, failing even to recognize it and bring it forward on appeal.

A far better practice is to consider your legal goals from numerous perspectives and frame the issue carefully from the start. Make sure you keep your legal goals in mind—and the proof required to support them—from the moment the client comes in, through your preparation for trial, through preparation of the jury charge, through trial, and on to appeal. The more complex the case, the more important it is to have a clear, concise statement of your key issue or issues. As Einstein is credited with saying, “If you can’t explain it simply, you don’t understand it well enough.”

You cannot hope to complete a sound legal analysis if you cannot distill the legal controversy to its essence. And to communicate the essence of the case effectively once you are on appeal, you must be precise. Abstract legal principles divorced from the facts that give them context will not provide any structure to your analysis of the applicable law and relevant facts. But also keep in mind that issue statements that are too specific or over-stuffed with irrelevant facts are unwieldy and just as unhelpful as vague issue statements.

The central question or issue in the case should be backed up by research that helps you build a theory of the case and a plan for going forward. Adequately researching the legal issues helps not only in articulating the central question but also in making a straight, logical path for your analysis. Research involves looking into the law and thoroughly examining the facts of the case. The soundness of the analysis comes from scrupulously applying the right law to the facts of the case, and doing so in a way that takes into account all of the relevant legal and factual considerations.

Legal arguments cannot be sound when they depend on the omission of a significant fact or legal premise, but this is precisely where lawyers are prone to develop blind spots. Good practitioners have found ways to guard against such blindness. They focus the on the actual text of the law, citing relevant statutory or contract provisions in their entirety. And they consider statutory provisions and case holdings in their entire context. Good legal analysis also relies on appropriate authority—authority that is relevant to the issue at hand and from a controlling jurisdiction. Be wary of over-reliance on secondary sources because courts usually find statutory and case law most relevant and persuasive.

Sound reasoning requires, above all, intellectual integrity. If a case from another jurisdiction is helpful to the analysis, include it and be clear about its role as persuasive, rather than controlling, authority. Do not try to pass the case off as controlling or as holding something that it does not. When analogizing or distinguishing relevant cases, be thorough in considering the unique facts and the larger context of those cases in addition to considering the facts of your own case. Explain why omitted facts or legal principles are not relevant or do not affect the legal conclusion.

Legal analysis done with this kind of intellectual integrity is much more likely to produce sound conclusions, and it helps the lawyer to avoid some of the common logical errors that undermine sound legal reasoning. A lawyer can do a fine job of setting out the governing rule of law, but then write an analysis that is not connected to the legal rule because it omits a discussion of a key element or fact. Lawyers sometimes draw irrelevant conclusions, such as when they ignore the application of a statutory exception to the general rule or when they try to isolate a contract provision from its larger context. Legal “reasoning” can be employed to overextend the application of a general rule when it fails to take into account the specific facts of the case setting out a general rule or the specific facts of the case at hand.

By synthesizing the relevant facts in the context of both general legal principles and specific provisions of law that govern the issue at hand, lawyers can avoid the common traps and—best of all—persuade judges and win cases.

Arbitration’s Appeal

By Mark Ritchie, Law Office of Mark Ritchie, P.C.

The Ever-Expanding Role of Arbitration

While arbitration has been widely used in England to resolve commercial disputes since the latter part of the eighteenth century, [1] it has struggled to achieve broad acceptance in the United States. Until relatively recent times, arbitration was only common in the context of labor disputes [2] and discrete varieties of business and professional conflicts. Arbitration’s potential remained largely dormant in our nation until the 1980s, when Moses H. Cone Memorial Hospital v. Mercury Construction Corporation [3] and Southland Corporation v. Keating shifted federal law squarely in favor of enforcing arbitration clauses. The use of arbitration clauses has expanded geometrically in the wake of these cases, with such clauses now being included as a matter of course in many types of contracts.[4] In the span of roughly 30 years, these developments have pushed arbitration from relative obscurity into becoming a substantial part of our nation’s current legal landscape.

Despite the growing significance of arbitration, litigators have been slow to accept arbitration due to its perceived disadvantages. While commercial clients are highly attracted to arbitration by the promise of greater speed and reduced costs, litigators continue to view arbitral proceedings with skepticism in light of substantial limitations on discovery, the limited role played by dispositive motions, and the very limited grounds for subsequent appellate review.[5] Over time, arbitration in the U.S. has come to more closely resemble traditional litigation by allowing greater discovery [6] and expanding the role of dispositive motion practice.[7] Still, many litigators view arbitration with some measure of distaste, fueled at least in part by concern that there is no real opportunity for appellate review.

Manifest Disregard: The Standard of Review We Need, But Not the One We Deserve Right Now [8]

Contrary to popular perception, arbitration awards were (until recently) reviewable for manifest disregard of law. Every federal circuit (including the Fifth) [9] adopted some permutation of this standard of review for awards issued under the Federal Arbitration Act (FAA), [10] and the standard was likewise adopted by multiple courts of appeals in Texas to review awards issued under the Texas Arbitration Act (TAA). [11] The contours of this standard of review were succinctly described by the Fifth Circuit in Brabham:

Manifest disregard means more than error or misunderstanding with respect to the law. The arbitrators must have appreciated the existence of a clearly governing principle but decided to ignore or pay no attention to it. Furthermore, the governing law ignored by the arbitrators must be well defined, explicit, and clearly applicable.[12]

When viewed as a tool for increasing confidence in and acceptance of arbitration, the widespread acceptance of this standard is easy enough to understand. By placing such a high burden on the party seeking review, manifest disregard strikes what many deem the right balance between allowing for error correction when arbitrators completely ignore accepted legal standards and affording broad deference to arbitrators’ determinations in the overwhelming majority of cases.[13]

Predictably, this attempt at balance did not last.[14] In Hall Street Assocs., LLC v. Mattel, Inc., the Supreme Court held that section 10 of the Federal Arbitration Act provides the “exclusive” grounds for vacatur of arbitration awards under federal law.[15] Curiously, this decision undermined an earlier decision from the Court responsible for giving rise to the manifest disregard standard in the first place.[16] Perhaps in recognition of this irony, the Court suggested in Stolt-Nielsen S.A. v. AnimalFeeds International Corp. that manifest disregard might continue as a viable standard after Hall Street Associates, either “an independent ground for review[,] or as a judicial gloss on the enumerated grounds for vacatur set forth at 9 U.S.C. § 10.”[17] In light of the Court’s conflicting declarations, there is now a circuit split on whether manifest disregard is still viable.[18]

While the applicability of manifest disregard is the subject of much debate nationally, in Texas the death of manifest disregard as a judicially-created standard is no longer debated at either the federal or state level. The Fifth Circuit has held definitively that manifest disregard is no longer viable, [19] and in Hoskins v. Hoskins the Texas Supreme Court held that the TAA provides an exclusive list of the grounds for reviewing an arbitrator’s awards, which does not include an arbitrator’s manifest disregard of the law.[20] For now, manifest disregard is dead as a judicially-created basis for review of arbitral awards in Texas . . . but that doesn’t mean there aren’t other options available.

When One Door Closes, Another Opens – Providing for Appellate Review in the Arbitration Clause Itself

In Nafta Traders, Inc. v. Quinn, [21] the Texas Supreme Court was faced with the question of whether parties could contractually agree to judicial review of an arbitration award for reversible error. The Nafta Traders court focused its analysis on the TAA’s provision applicable to instances in which the arbitrators exceed their powers, using this as a springboard to criticize a gap in the analysis of the equivalent FAA provision set forth in Hall Street Associates:

Yet the Supreme Court, in holding that under FAA the grounds for vacating, modifying, or correcting an arbitration award cannot be expanded . . . did not discuss section 10(a)(4), which like section 171.088(a)(3)(A) of the TAA, provides for vacatur “where the arbitrators exceeded their powers.” The omission appears to us to undercut the Supreme Court’s textual analysis. When parties have agreed that an arbitrator should not have authority to reach a decision based on reversible error—in other words, that an arbitrator should have no more power than a judge—a motion to vacate for such error as exceeding the arbitrator’s authority is firmly grounded in the text of section 10.[22]

The Nafta Traders opinion dedicates several pages to analyzing and systematically dismissing both Hall Street Associates’ textual and policy analysis, ultimately finding no convincing reason not to allow parties to agree to expanded judicial review of arbitration awards.[23] So long as the parties’ agreement is not subject to the FAA, the parties are entirely free to agree to whatever degree of appellate review they desire. Those drafting contractual provisions for such review should take care to bear the following points in mind:

  • Because the FAA does not permit contractual agreements for judicial review, anyone drafting an arbitration clause with an eye toward providing for expanded judicial review should be mindful of federal preemption. The clause should be drafted to ensure that the TAA applies to the agreement, and also should provide that judicial review of any award is premised on limitations of the arbitrators’ authority. Counsel drafting these clauses should pay particular attention to the analysis provided in Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, [24] Nafta Traders, [25] and Denbury Onshore, LLC v. Texcal Energy South Texas, L.P.[26]
  • Under Nafta Traders, the parties are free to agree to full judicial review (starting with the trial court) of the arbitration award, in the same manner as any other judicial decision.[27] That being said, entitlement to full judicial review is still contingent on creating a sufficient record of the arbitral proceeding, with appropriate steps taken by counsel at the proceeding to preserve error.[28]
  • Instead of proceeding through the judicial system, many arbitral institutions (including JAMS [29] and AAA [30]) now provide an optional appellate procedure that parties can invoke in their arbitration clauses. Proceeding with appellate review through an arbitral institution may allow for faster determination, but it is also likely to be more expensive. It also has no chance of producing an opinion with precedential value.

There is no disputing the fact that more and more disputes are ultimately destined for arbitration, but until the issue is addressed at the contract-drafting stage, cases where we might otherwise be able to offer assistance will simply not be subject to substantial appellate review. It is clear that everyone is keenly interested in appellate review once things go wrong, but it is key for everyone to understand that such review is something the parties must agree to well before it is actually needed. Given that many of our transactional colleagues may not be especially concerned about carefully drafting arbitration clauses that provide for appellate review consistent with current law, [31] we should be working to educate everyone on this issue so they can take appropriate action.

[1] Commercial arbitration was used to resolve controversies between medieval merchants in fairs and marketplaces in both England and on the European continent, but it wasn’t until enactment of the English Arbitration Act of 1889 that arbitration came into common use as a tool for resolving commercial disputes in general. Arbitration, Encyclopedia Britannica, https://www.britannica.com/topic/arbitration (last checked Mar. 7, 2018).

[2] For extensive discussion of the history and development of labor arbitration in the first half of the twentieth century, see Morton Gitelman, The Evolution of Labor Arbitration, 9 DePaul L. Rev. 181 (Spring-Summer 1960).

[3] 460 U.S. 1. In Moses H. Cone, the Court held that state policies disfavoring arbitration could not prevail in the face of the contrary intent behind the Federal Arbitration Act, which the Court interpreted as mandating “a liberal federal policy favoring arbitration” and requiring that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Id. at 24-25.

[4] “The use of arbitration clauses has exploded in the last thirty years, and such clauses are routinely inserted by corporations into employment agreements, consumer contracts, brokerage agreements, and the like.” Richard Frankel, The Arbitration Clause as Super Contract, 91 Wash. U. L. Rev. 531, 533 (2014). “Over the last few years, it has become increasingly difficult to apply for a credit card, use a cellphone, get cable or Internet service, or shop online without agreeing to private arbitration. The same applies to getting a job, renting a car, or placing a relative in a nursing home.” Jessica Silver-Greenberg and Robert Gebeloff, Arbitration Everywhere, Stacking the Deck of Justice, N.Y. TIMES, Oct. 31, 2015, at A1.

[5] See generally Jennifer R. Scharf & Margot P. Schoenborn, Pros and Cons of ADR from the Corporate Counsel Perspective (Erie Inst. of Law CLE, Feb. 8, 2017).

[6] See Claudia T. Salomon & Sandra Friedrich, Obtaining and Submitting Evidence in International Arbitration in the United States, 24 AM. REV. OF INT’L ARBITRATION 549, 551-54 (2013) (contrasting approach to discovery in U.S.-based arbitrations to the typical disclosure phase approach employed in international arbitrations).

[7] E.g., AAA Commercial Arbitration Rule 33 (providing that the arbitrator may allow filing and rule on dispositive motion “only if . . . the moving party has shown that the motion is likely to succeed and dispose of or narrow the issues in the case”).

[8] This oblique reference to Christopher Nolan’s The Dark Knight is not meant to suggest that manifest disregard is the functional equivalent of an obsessed vigilante, only that manifest disregard has been treated quite poorly in recent years despite its beneficial effect.

[9] E.g., Kergosien v. Ocean Energy, Inc., 390 F.3d 346, 353 (5th Cir. 2004); Brabham v. A.G. Edwards & Sons Inc., 376 F.3d 377, 381 (5th Cir. 2004); Prestige Ford v. Ford Dealer Computer Servs., Inc., 324 F.3d 391, 395 (5th Cir. 2003).

[10] Kate Kennedy, Manifest Disregard in Arbitration Awards: A Manifestation of Appeals Versus a Disregard for Just Resolutions, 16 J. L. & Pol’y 417, 417 n.1 (2007).

[11] E.g., Xtria L.L.C. v. Int’l Ins. Alliance Inc., 286 S.W.3d 583, 594 (Tex. App.—Texarkana 2009, pet. denied); Home Owners Management Enters., Inc. v. Dean, 230 S.W.3d 776, 768-69 (Tex. App.—Dallas 2007, no pet.); Tanox, Inc. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P., 105 S.W.3d 244, 252 (Tex. App.—Houston [14th Dist.] 2003, pet. denied).

[12] 376 F.3d at 381 (internal quotes and citation omitted).

[13] Manifest disregard was judicially designed to provide only extremely limited judicial review, so as to avoid “undermin[ing] our well established deference to arbitration.” Tanox, 105 S.W.3d at 253. “Manifest disregard is a very narrow standard of review. It is more than error or misunderstanding of the law. The error must be obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator.” Xtria, 286 S.W.3d at 594 (internal quotes and citation omitted). “[T]he issue is not whether the arbitrator correctly interpreted the law, but whether the arbitrator, knowing the law and recognizing that the law required a particular result, simply disregarded the law.” Id.

[14] For those who are curious, Paula Poundstone is largely responsible for introducing the phrase “this is why we can’t have nice things” into popular culture. ENGLISH LANGUAGE & USAGE STACK EXCHANGE, https://english.stackexchange.com/questions/417320/what-is-the-origin-of-the-phrase-this-is-why-we-cant-have-nice- things (last visited Mar. 11, 2018).

[15] 552 U.S. 567, 585 (2008).

[16] See id. at 584 (discussing circuit opinions interpreting Wilko v. Swan, 346 U.S. 427 (1953)). 17 130 S. Ct. 1758, 1768 n. 3 (2010). Given the attendant confusion and crystal-ball gazing prompted by this passage, one commentator has characterized footnote 3 of Stolt-Nielsen as the most famous footnote in the arbitration world. Lionel Schooler, Ethics for Arbitrators and Advocates: I Didn’t Know I Couldn’t Do That!! PowerPoint presentation, Slide 34, from Handling Your First (or Next) Arbitration: Effective Uses of Arbitration (Texas Bar CLE, Nov. 3, 2017).

[18] The Seventh, Eighth, and Eleventh Circuits currently hold that manifest disregard is no longer a basis for appellate review, while the Second, Fourth, Sixth, and Ninth Circuits, no doubt prompted by Stolt-Nielsen, now hold that manifest disregard of the law renders an arbitral award subject to reversal by virtue of the arbitrators exceeding their powers under 9 U.S.C. §10(a)(4). Jason P. Steed, Appealing Arbitration Awards and the Circuit Split over “Manifest Disregard of the Law,” ABA Section of Litigation, Appellate Practice (May 10, 2016), available at http://apps.americanbar.org/litigation/committees/appellate/articles/spring2016-0516-appealing- arbitration-awards-circuit-split-manifest-disregard-law.html.

[19] Citigroup Glob. Mkts., Inc. v. Bacon, 562 F.3d 349, 358 (5th Cir. 2009).

[20] 497 S.W.3d 490 (Tex. 2016). Justice Willet filed a concurring opinion in Hoskins in which he indicated the opinion was motivated in significant part by a desire to “avoid the sort of quagmire that surrounds the TAA’s federal counterpart, the Federal Arbitration Act (FAA).” Id. at 499. If the U.S. Supreme Court decides to revisit the issue and approve of the manifest disregard standard, it will be interesting to see whether this prompts a corresponding change in position by the Texas Supreme Court. See Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84, 91-92 (Tex. 2011) (stating that the Texas Supreme Court was “obliged to examine Hall Street’s reasoning” in the process of reaching its decision).

[21] 339 S.W.3d 84 (Tex. 2011).

[22] Id. at 92-93.

23 Id. at 97.

[24] 489 U.S. 468 (1989).

[25] 339 S.W.3d at 97-101.

[26] 513 S.W.3d 511 (Tex. App.—Houston [14th Dist.] 2016, no pet.).

[27] 339 S.W.3d at 101-02 (discussing the parties’ entitlement to “full judicial review,” and noting that the parties “cannot agree to a different standard of judicial review than the court would employ in a judicial proceeding involving the same subject matter”).

[28] Id.

[29] https://www.jamsadr.com/appeal/

[30] https://www.adr.org/sites/default/files/AAA%20ICDR%20Optional%20Appellate%20Arbitration %20Rules.pdf

[31] As noted by the AAA, “[c]ompanies and their transactional lawyers carefully evaluate the business terms in their contracts, but they often reflexively insert a boilerplate arbitration clause from other contracts or a form book.” David L. Evans & India Johnson, The Top 10 Ways to Make Arbitration Faster and More Cost Effective, https://www.adr.org/sites/default/files/document_repository/The %20Top%2010%20Ways%20to%20Make%20Arbitration%20Faster%20and%20More%20Cost-.pdf (last visited Mar. 7, 2018).

Should Lawyers Be Cybersecurity Experts Too?

By Jill Schumacher, 14th Court of Appeals, and Adam Schumacher, CISSP, IT Operations & Security at FlightAware, LLC

The Internet is always on, always present, and lawyers almost always have access. The modern lawyer uses the Internet to communicate, research, and store massive amounts of data. Without the Internet, most law practices would grind to a halt. At the same time, cybersecurity threats have become increasingly prevalent, and lawyers of every breed know that cybersecurity matters to their practice. Translating that fuzzy background awareness into action can be hard, particularly for lawyers who do not have a background in Information Technology (IT). How should lawyers respond to the growing awareness that cybersecurity is important?

Lawyers can take some guidance from the rapidly changing ethical obligations relating to technology and cybersecurity. In the American Bar Association’s assessment, a lawyer’s knowledge of the skills and risks of various technologies reflects on the lawyer’s competence as a practitioner. Model Rule of Professional Responsibility 1.1 requires a lawyer to provide competent representation to a client. Comment 8 recently was revised to state:

To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.

To date, Texas has not adopted a similar requirement that lawyers continually keep abreast of the benefits and risks associated with relevant technology. Texas ethics opinions have focused on whether a lawyer reasonably may use different technologies. For example, Ethics Opinion No. 648, published in April 2015, addressed whether the Texas Disciplinary Rules of Professional Conduct permit lawyers to communicate confidential information by email. In concluding that a lawyer ethically may communicate confidential information by email, Ethics Opinion No. 648 analyzes the technology, the concern that unauthorized individuals may gain access to the communication, the risks inherent in other forms of communication, and the expectation of privacy present in email based on laws making it a crime to intercept emails.

Though the ethics rules and opinions in Texas do not explicitly place the onus on lawyers to assess the risks inherent in different technologies, many states are moving to adopt broader requirements that more closely mirror the position of the American Bar Association. Similarly, many clients subject to security regulations and interested in the security of their data mandate that the lawyers they retain meet a higher standard than required by the rules governing professional responsibility.

Law firms of every size — from the biggest firms to solo practitioners — work with and store many kinds of confidential records of their own and their clients. Increasingly, individuals seeking unauthorized access to data have targeted a third party, such as a contractor or a law firm rather than the party that originated the data. Third parties are often the weakest link in the data security chain and often store the data in a concentrated form — in short, lawyers already have done a lot of the “doc review” for the individual seeking unauthorized access.

The 2015 breach of Mossack Fonseca has become a famous example of how even relatively small and obscure firms are targets for cyberattack. The breach resulted in millions of client documents, emails, database records, and other data colloquially known as the “Panama Papers” being leaked publicly. An analysis of the breach indicated that an unpatched webserver was the most likely entry point.

One response to learning that unauthorized individuals accessed law firm data by breaching an unpatched webserver might be to label the breach as an IT problem. A law firm with an IT security department should be able to expect that department to manage software patching and systems maintenance. (A solo practitioner relying on third parties to maintain and manage systems should ensure she is using third parties who reliably are patching and maintaining those systems.) Although lawyers should expect IT professionals to properly manage systems, cybersecurity is not simply an IT problem. In the case of Mossack Fonseca, the fact that so much data was so easily accessed from an internet-facing server suggests the firm as a whole was not adequately assessing the risks it faced and protecting the data with which it had been entrusted.

While IT professionals can provide access to technology, lawyers are in the best position to ensure their confidential information is stored securely. Lawyers can minimize risk by working with their IT professionals to locate where this information is stored, enumerate the risks to the data, and identify the necessary controls to protect it.

Many security threats that practicing lawyers face may bypass the IT department entirely. Although social engineering is one of the oldest security threats, it remains one of the most effective. The ubiquity of technology, like email, that removes or masks a person’s true identity has enabled sophisticated scammers to operate on an unprecedented scale. By default, there is no mechanism for validating or verifying the authenticity of a sender’s email address or name. Just as one could put any return address on an envelope and sign any name in the body of the letter sent through the postal service, so too could an attacker with an email they send.

Lawyers must be cognizant of the fact that an individual seeking unauthorized access might send an email that mirrors some of the most routine emails lawyers regularly receive without thought or question. While Ethics Opinion No. 648 might shield lawyers in Texas from ethical responsibility, awareness of these types of attacks is the best way to help prevent them. Lawyers should be involved in discussions with clients and other individuals in their law practice about ways to verify the authenticity of emails and provide alternate means for an email recipient to follow up on any communication that seems questionable.

Lawyers can implement many types of safeguards without becoming cybersecurity experts. Lawyers are not required to have degrees in IT fields. (Lawyers interested in learning more about cybersecurity can learn the basics by reading publications geared towards lawyers, such as The ABA Cybersecurity Handbook by Jill D. Rhodes and Robert S. Litt.) While lawyers may not have IT backgrounds, lawyers are incisive thinkers who often are required to work with experts in other fields. Lawyers can and should think critically about cybersecurity and engage with IT professionals. Lawyers need not become cybersecurity experts to safeguard client data. But, lawyers can go a long way toward improving the safety of their clients’ confidences simply by thinking about the data they possess and the ways they might minimize the risk of unauthorized access.

Case Update for January and February 2018

By Andrew Nelson, Wright & Close, LLP and Kyle Lawrence, Beck Redden LLP,


Jackson v. Stroud, No. 01-17-00145-CV, 2017 WL 6519913 (Tex. App.—Houston [1st Dist.] Dec. 21, 2017, no pet. h.)

In reversing and remanding a case for a new trial, the court found that a trial court improperly overruled a Batson challenge when counsel’s explanations for striking all black members of the panel were pretextual in nature.

Carolyn Jackson’s husband died from complications of heart bypass surgery performed by Dr. Daniel Stroud. Jackson sued Stroud for medical malpractice. During jury selection, one of the four black members of the panel was struck for cause. At the conclusion of voir dire, Stroud used three of his peremptory strikes to strike the remaining black panelists. Jackson raised a Batson challenge, which the trial court overruled. After the jury returned a defense verdict and the trial court entered a take-nothing judgment, Jackson appealed, raising the Batson issue as her first issue on appeal.

The court began its analysis by stepping through the three-step Batson analysis. First, the party challenging the peremptory strike must establish a prima facie case of racial discrimination. To make this showing, a party may rely on all relevant facts, including a statistical disparity between black and non-black panelists who are struck. Second, if the challenging party meets her burden, the burden shifts to the striking party to offer a race-neutral explanation for the strikes. This is a burden of production only. To meet this burden, the striking party must offer “clear and reasonably specific” reasons for the strikes. Third, if the striking party has offered a facially race-neutral explanation, the challenging party must prove purposeful racial discrimination. In the third step, a court examines the persuasiveness of the justification for the challenged strikes, and “implausible or fantastic justifications” may be found to be pretexts for purposeful discrimination. The court of appeals reviews the trial court’s Batson determination for an abuse of discretion, considering all relevant circumstances to determine whether race was a factor in the exercise of the preemptive strike.

Regarding the first factor—the existence of a prima facie case of discrimination—the court found that trial counsel mooted the factor by proceeding directly to explanations of the strikes and not challenging the existence of a prima facie case. In examining the second factor, the court does not analyze whether the explanations are persuasive or even plausible, but rather whether they are facially valid. In the case before it, the court held that trial counsel provided race-neutral explanations for his strikes. Specifically, counsel said he struck one juror because she was a certified nursing assistant, another because she appeared disinterested and was dozing off, and the third because he believed his brother died as a result of malpractice.

Finally, the court examined the third Batson factor, namely whether the explanations offered by counsel were pretextual in nature. In examining this factor, the court first noted a large statistical disparity between the percentage of black and non-black panelists struck by Stroud. The court held that this disparity tended to show a racial motivation for the strikes. The court then honed in on the strike used on the certified nursing assistant. The court examined counsel’s reasoning for why her status as a CNA justified a strike, and found that it was pretextual—there was simply no explanation for why her job as a CNA would have impacted her ability to be an impartial juror. As a result, at least one of the jurors was struck for a pretextual reason, meaning that the district court should have sustained the Batson challenge. The court reversed the trial court’s judgment and remanded for a new trial.

English v. Bajjali, No. 01-17-00093-CV, 2017 WL 6520433 (Tex. App.—Houston [1st Dist.] Dec. 21, 2017, no pet. h.)

The trial court did not err in granting a no-evidence motion for summary judgment when the plaintiffs did not file a sworn motion or affidavit showing why additional discovery was needed, and did not err in not considering evidence filed after the submission date for the motion for summary judgment.

English and Colling sued Bajjali over a disputed investment. Bajjali filed a no-evidence motion for summary judgment and set it for October 3, the last day for consideration of motions under the docket control order. English and Colling filed a response arguing that there had been inadequate time for discovery and that Bajjali had failed to comply with several of their discovery requests. In the following paragraph, English and Colling argued that they had “volumes of documents, evidence . . . to support each and every allegation in their complaint.” English and Colling each attached written statements to their response. Bajjali filed a reply and objected to English and Colling’s evidence. On October 5, two days after the submission date, English and Colling filed an amended response and attached additional evidence. On November 1, the trial court sustained several of Bajjali’s evidentiary objections and granted summary judgment. English and Colling appealed, arguing 1) there was an inadequate time for discovery and 2) that the court erred by striking portions of their summary judgment evidence.

First, the court stated the law regarding inadequate time for discovery:

A discovery period set by pretrial order should be adequate opportunity for discovery unless there is a showing to the contrary, and ordinarily a motion under paragraph (i) would be permitted after the period but not before. A party contending that it has not had adequate time for discovery before a summary judgment hearing must file either an affidavit explaining the need for further discovery or a verified motion for continuance. The affidavit or motion must describe the evidence sought, state with particularity the diligence used to obtain the evidence, and explain why the continuance is necessary.

English v. Bajjali, 01-17-00093-CV, 2017 WL 6520433, at *2 (Tex. App.—Houston [1st Dist.] Dec. 21, 2017, no pet. h.) (internal citations and quotations omitted). The court noted that English and Colling did not file an affidavit or verified motion for continuance showing why they needed more time to conduct additional discovery. Additionally, the court pointed out that in their response to the no-evidence motion for summary judgment, English and Colling specifically stated that they had “volumes” of evidence to support their position, which conflicted with their argument on appeal. Further, the written statements attached to their summary judgment response did not address the specific evidence sought or why a continuance was necessary. Because English and Colling did not show why they needed time to conduct additional discovery, the court overruled the first issue.

Second, regarding the court’s striking of some of English and Colling’s evidence, the court began by noting that, in reviewing a summary judgment, a reviewing court must first consider whether issues raised on appeal were “actually presented to and considered by the trial judge.” The court is not “free to search . . . materials not cited to or relied on by the trial court.” Unless there is leave of court given to file untimely summary-judgment evidence, a court of appeals presumes that the trial court did not consider the evidence. In the case before it, because English and Colling’s evidence was filed late without obtaining leave of court, it was not before the trial court for consideration. As such, the court of appeals overruled the challenge to the trial court’s striking of English and Colling’s summary judgment evidence.


Home Comfortable Supplies, Inc. v. Cooper, No. 14-16-00906-CV, 2018 WL 1004703 (Tex. App.—Houston [14th Dist.] Feb. 22, 2018, no pet. h.)

A complaint that the opposing party failed to properly segregate attorney’s fees is preserved by an objection before the case is submitted to the factfinder. Thus, in a bench trial, a segregation complaint was preserved for appeal by counsel’s statements made during closing argument.

After a bench trial, the trial court awarded Cooper and other plaintiffs (the “Cooper Parties”) actual damages, punitive damages, and attorney’s fees on their claims against Home Comfortable Supplies and its president (“HCS”). HCS appealed the attorney’s fees award, arguing that the Cooper Parties’ counsel failed to properly segregate their fees for work performed solely to advance claims for which attorney’s fees were unavailable.

A key issue on appeal was whether HCS’s post-judgment motion to modify preserved its segregation complaint for appeal. The court of appeals acknowledged there was “no consistent rule about when an objection to the failure to segregate attorneys’ fees must be raised in a case tried without a jury.” Surveying the case law, the court observed that some courts have held that an objection to the failure to segregate “must be raised when the fee testimony and billing records are offered as evidence,” some courts (including the Fourteenth) have held that a post-judgment motion preserves the complaint, and still other courts (also including the Fourteenth) have held that a post-judgment motion does not preserve the complaint.

Ultimately, the court noted that HCS’s counsel stated during closing argument: “They also didn’t segregate their attorney’s fees.” This statement, according to the court, was “made before the case was submitted to the factfinder” and properly “preserved the complaint” for appeal. The court further explained that its conclusion was consistent with its prior holding that such a complaint must be made before fees are awarded, its prior decisions allowing a post-judgment motion to preserve the complaint, and “many cases stating that, in a jury trial, the complaint can be preserved by a charge objection, that is, before the case is submitted to the jury.”

Finding the complaint preserved by counsel’s statements during closing argument, the court declined to “resolve the conflicts in the case law” about whether, in a bench trial, such a complaint can be preserved by post-judgment motion.

In re Merino, No. 14-17-00805-CV, 2018 WL 357476 (Tex. App.—Houston [14th Dist.] Jan. 9, 2018, orig. proceeding)

If a party adversely affected by a judgment (or their attorney) does not receive notice or acquire actual knowledge of the judgment within 20 days after the judgment was signed, Rule 306a(4) provides that the typical 30-day period for plenary power under Rule 329b does not begin until the party or their attorney receives such notice or acquires actual knowledge. But “in no event shall such periods begin more than [90] days after the original judgment or other appealable order was signed.”

According to established Supreme Court precedent, the Rule 306a(4) exception does not apply if neither the party nor their attorney learned of the judgment until more than 90 days have passed. In a concurring opinion, Chief Justice Frost labels this result a “camouflaged” trap that has “vexed Texas litigants and trial courts for many years” and calls on the Supreme Court to clarify the text of Rule 306a(4).

Merino sued a home repair company, Ivory Carter Enterprises, Inc., and two other defendants after defects in a home Merino purchased became apparent. Ivory Carter failed to answer suit, so Merino moved entry of a default judgment and severance of the resulting judgment from the remainder of the suit against the home inspector and previous owner.

The trial court granted Merino’s motion and entered a default judgment and severance order on February 28, 2017. On June 26, 2017, Ivory Carter filed a motion for new trial supported by the affidavit of its Chief Executive Officer, Gregory Carter, who testified that Ivory Carter first received notice of the lawsuit on June 19, 2017—111 days after the judgment was entered. The trial court granted the motion for new trial on August 11, 2017. Merino sought mandamus to compel the trial court to set aside the new trial order, arguing that plenary power expired before the order was entered because Ivory Carter did not timely file its motion for new trial.

The court of appeals began by explaining the relationship between Texas Rules of Civil Procedure 329b and 306a, which set the time in which a judgment may be directly attacked. Rule 329b(d) gives the default rule: unless a motion for new trial or motion to modify, correct, or reform the judgment has been filed, a trial court’s plenary power of the judgment expires 30 days after the judgment was signed. Rule 306a, in turn, provides a limited exception. First, Rule 306a(3) requires the trial court clerk to give notice to the parties or their counsel of record immediately after the judgment was signed. And if neither a party adversely affected by the judgment nor their attorney receives the required notice or acquires actual knowledge of the judgment within 20 days after the judgment was signed, Rule 306a(4) provides that the 30-day window for plenary power under Rule 329b begins on the date the party or their attorney received such notice or acquired actual knowledge, whichever occurred first. In “no event,” however, “shall such periods begin more than ninety days after the original judgment or other appealable order was signed.” Therefore, according to established precedent from the Supreme Court, the Rule 306a(4) exception does not apply if the party or their attorney did not receive notice or acquire actual knowledge of the judgment within ninety days after the trial court signed the judgment or order.

Because Ivory Carter did not receive notice of the default judgment until June 19, 2017—111 days after the default judgment was signed on February 28, 2017—the court of appeals followed Supreme Court precedent and held that the Rule 306a(4) exception could not apply. Consequently, the trial court’s plenary power expired 30 days later, on March 30, 2017, Ivory Carter’s June 26, 2017 motion for new trial was untimely, and the August 11 new trial order was void.

Chief Justice Frost joined the opinion and judgment in full, but authored a concurring opinion to emphasize that the case “highlights an opportunity” for the Supreme Court to “eliminate a trap in the procedural rules that has vexed Texas litigants and trial courts for years.” Emphasizing that courts, practitioners, and pro se litigants “ought to be able to pick up a rule book and glean the meaning of a rule from the text alone,” the Chief Justice called on the Court to amend the text of Rule 306a(4) to unambiguously reflect the Court’s prior interpretation of the rule.

Did you Know?

By JoAnn Storey

We all know the following about cases transferred by the Texas Supreme Court from one court of appeals to another:

1. The transferee court must decide the case in accordance with the precedent of the transferor court if the transferee court’s decision otherwise would have been inconsistent with the precedent of the transferor court.

2. The court’s opinion may state whether the outcome would have been different had the transferee court not been required to decide the case in accordance with the transferor court’s precedent.

Here’s the authority for the rule, at your fingertips: TRAP 41.3

Crossword Puzzle

by James Marrow, Hogan & Hogan

Here is the latest HBA Appellate Lawyer crossword puzzle. For those who prefer to solve online, there is a .PUZ version of the file. (To solve online, you may need the Across Lite software, which is available for free.)

A PDF version of the puzzle is available. The solution is also available.

Upcoming Luncheons

April 26, 2018

“An Original Document for Every Song in ‘Hamilton: An American Musical,’” by Charles Eskridge
RSVP deadline: noon on Monday, April 23
CLE: 1.0 hour

May 10, 2018

“Oral Argument Dissection: A Video Analysis of Oral Arguments at the Texas Supreme Court” by Tom Wright, Reagan Simpson, and Justice Tracy Christopher
RSVP deadline: noon on Monday, May 7
CLE: 1.0 hour

Place: Coronado Club, 919 Milam Street, Suite 500 from 11:30 a.m. - 1:00 p.m.

Cost: $40 for Section members who RSVP; $45 for non-members who RSVP and for Section member walk-ins; $50 for non-member walk-ins.

To RSVP, please e-mail luncheon@hbaappellatesection.org. Reservations are transferable. Please note that if you RSVP and do not attend or transfer your reservation, you will be billed for the cost of the luncheon. For more information, please contact Meetings and Membership Chair, James Marrow, at (713) 222-8800. PLEASE NOTE IN YOUR RSVP IF YOU HAVE A DIETARY REQUEST (vegetarian, gluten free, non-dairy, non-seafood, etc.).

Business attire required (jackets for men). Please do not valet park at the Coronado Club; valet parking at the Coronado Club is only for Coronado Club members who pay for parking through their individual memberships. Paid parking is available at the McKinney Place Garage at 930 Main Street, at street level, and in surrounding surface lots.

* If you RSVP now for a luncheon in the future, please indicate in your email which luncheon you are planning to attend.

Upcoming Events

April 11, 2018

27th Annual Appellate Judicial Reception
Time: 5:30-8:00
Location: Brennan’s of Houston

May 3, 2018

HBA Appellate Practice Section Happy Hour
Time: 5 p.m.
Location: Cellar 7 Wine & Bar Bites, 610 Main Street

Best Brief Award Winners

Congratulations to the winners of the 2018 HBA Appellate Section Best Brief Award: Austin Echols from the University of Houston Law Center, Natalie Stanley from South Texas College of Law Houston, and Miguel Sarkis from Thurgood Marshall School of Law.