July 1, 2016

July 1, 2016

This week the Texas Supreme Court issued 4 per curiam decisions and no grants. The Court's per curiam decisions addressed the following issues: (1) whether a company sufficiently invoked the judicial process to waive arbitration, (2) whether Texas is a proper forum for a case in which a shipping accident occurred in Mexican waters, (3) whether the condition of a city's emergency telephone system waived the city's immunity under the Texas Tort Claims Act, and (4) whether a prisoner should have been afforded the opportunity to cure a jurisdiction defect in his case for due-process violations. The Court's decision on waiver of arbitration is of particular interest.

RSL Funding LLC v. Cheveze D. Pippins, et al. - 14-0457

In this case, the Texas Supreme Court addressed whether a company sufficiently invoked the judicial process so as to waive arbitration agreements by engaging in a lawsuit involving companies with which it did not have arbitration agreements and individuals with whom it did.

The appellate court held that the company had impliedly waived arbitration by substantially invoking the judicial process.

The Texas Supreme Court disagreed and specified that a company does not substantially invoke the judicial process sufficient to waive arbitration by engaging in litigation, even for a related claim, against another party with whom the company does not have an arbitration agreement. The Court emphasized that, although the individuals with whom the company had arbitration agreements were named-parties, the focus of the litigation were the claims between the company and the entities not subject to arbitration agreements. Further, the Court found that once aribtrable disputes arose between the company and the individuals with whom it had arbitration agreements, the company initiated arbitration procedures within a reasonable time period. The Court concluded that the party seeking to prove implied waiver by invocation of the judicial process faces a heavy burden, and such a burden was not met here because (1) the company did not indicate intent to waive arbitration and (2) a 3-month delay between the appearance of arbitrable disputes and the initiation of arbitration procedures was not long enough to establish intent to waive.