July 3, 2015

July 3, 2015

This week the Supreme Court set six cases and reset one case for oral argument. We review each of these orders in this week's edition of the Texas Supreme Court Update.

BCCA Appeal Group v. City of Houston, Case 13-0768:

In this Petition for Review, the BCCA Appeal Group, Inc. brought suit to enjoin enforcement of two ordinances enacted by the City of Houston. BCCA argued that the Texas Clean Air Act ("TCCA") and the Texas Water Code preempted the ordinances, and, thus, the ordinances were unconstitutional under Article XI of the Texas Constitution. Specifically, the ordinance purportedly made unlawful facilities that were approved or authorized by the Texas Commission on Environmental Quality. However, the City of Houston countered that the ordinances do not create stricter emission standards than the TCCA, but rather they implement enforcement measures well within the Act's regulatory scheme. The First Court of Appeals ruled for the City of Houston and BCCA has appealed. Oral argument is reset for September 2, 2015.

In Re RSR Corp. and Quemetco Metals Limited, Inc., Case 13-0499:

In this Petition for Writ of Mandamus, RSR challenges a 26-page order granting a Motion to Disqualify Bickel & Brewer from representing RSR in litigation. RSR argues that the Real Party in Interest failed to seek disqualification in its original Motion for Sanctions or its Amended Motions; that it waited 14 months before making its disqualification claim; and that it did not violate Texas ethical rules by speaking with a former-employee fact witness. However, Real Party in Interest claims that Bickel & Brewer secretly obtained confidential and privileged information from its former high-ranking employee over a seven-month relationship. The Dallas Court of Appeals denied RSR's mandamus petition. Oral argument is set for September 2, 2015.

Seger v. Yorkshire Ins. Co., Ltd., Case 13-0673:

Plaintiffs, parents of a minor Decedent, originally filed a wrongful death case against Diatom when their son tragically died, a case that resulted in a $7.5 million judgment for each of the parents. Diatom's CGL insurers denied coverage and Diatom assigned itsStowers action to the Segers. The Segers won a judgment in 2005 on the Stowers claim. Subsequently, the Seventh Court of Appeals ruled that the Segers could not use their wrongful death judgment as evidence in their subsequent Stowers action, and the Segers seek review from the Supreme Court. Oral argument is set for September 3, 2015.

Occidental Chem. Corp. v. Jenkins, Case 13-0961:

In this case, Respondent Jason Jenkins claimed that Occidental owned and operated a chemical plain in Bayport and that its acid addition system was negligently designed. Occidental asserted that it was protected by two statutes of repose that protect parties who "design" and "construct" improvements to real property. The trial court granted a take-nothing judgment for Occidental, but the First Court of Appeals reversed the decision, finding that the statutes did not apply. Oral argument is set for September 3, 2015.

Melendez v. Kingsaire, Inc. d/b/a Kings Aire, Inc., Case 14-0006:

In this Petition for Review, the Respondent, Jorge Melendez, sued Kings Aire for retaliation, arguing that he was terminated wrongfully after his 12 weeks of FLMA leave expired. Melendez had suffered serious injuries to his wrist. The trial awarded Melendez $124,654, and the Eighth Court of Appeals affirmed. Kings Aire argues that it terminated Melendez via a straightforward application of its leave policy. The company claims that it was entitled to a jury question or instruction on the affirmative defense of a uniformly-enforced absence policy. The Court will hear oral argument on September 3, 2015.

U.S. Metals, Inc. v. Liberty Mutual Group, Inc., Case No. 14-0753:

This case involves certified questions from the U.S. Court of Appeals for the 5th Circuit regarding application of 2 business risk exclusions commonly found in most CGL policies. U.S. Metals installed defective flanges procured from a third party into Exxon facilities in Texas and Louisiana. Exxon had the flanges replaced by another contractor and sued U.S. Metals for its damages. U.S. Metals sought defense and indemnity from Liberty, its CGL insurer, which was denied under Exclusion K, the "your product" exclusion, and Exclusion M, the "damage to impaired property or property not physically injured" exclusion. On appeal, the Fifth Circuit requests the following guidance from the Texas Supreme Court:

1. In the "your product" and "impaired property" exclusions, are the terms "physical injury" and/or "replacement" ambiguous?

2. If yes as to either, are the aforementioned interpretations offered by the insured reasonable and thus, must be applied pursuant to Texas law?

3. If the above question 1 is answered in the negative as to "physical injury," does "physical injury" occur to the third party's product that is irreversibly attached to the insured's product at the moment of incorporation of the insured's defective product or does "physical injury" only occur to the third party's product when there is an alteration in the color, shape, or appearance of the third party's product due to the insured's defective product that is irreversibly attached?

4. If the above question 1 is answered in the negative as to "replacement," does "replacement" of the insured's defective product irreversibly attached to a third party's product include the removal or destruction of the third party's product?

Williams v. The Texas Taxpayer & Student Fairness Coalition, et al, Case No. 14-0776:

This case involves a constitutional challenge to the Texas public education system as violating the Texas Constitution and sought injunctive and declarative relief. The Commissioner of Education and 3 school districts filed direct appeals to the Court. The issues for oral argument on September 1, 2015 are:

1. Do Plaintiffs' and Intervenors' claims under Article VII, Section 1 of the Texas Constitution present non-justiciable political questions?

2. Does the relief sought by Plaintiffs and Intervenors-declarations that the public-education system is unconstitutional and injunctions halting public-education funding-sufficiently redress their alleged injuries to give them standing to sue?

3. Are Plaintiffs' challenges to the current public-education system, as amended by the Legislature in 2013 (or any later session), unripe?

4. Does sovereign immunity bar the Charter School Plaintiffs' claims to the extent that they seek to alter the terms and conditions of charters and thus constitute contract claims against the State?

5. Does the public-education system violate Article VII, Section 1's "adequacy" requirement?

6. Does the public-education system violate Article VII, Section 1's "financial efficiency" requirement?

7. Does the public-education system violate Article VII, Section 1's "suitability" requirement?

8. Does the public-education system impose a state property tax in violation of Article VIII, Section 1-e of the Texas Constitution?

9. If the Court reverses any part of the final judgment on the merits, should it also reverse and remand the judgment on the parties' attorney fee requests?

10. Can the district court retain "continuing jurisdiction" over this case?

Conclusion:

Make sure to check back next Friday to see if the Court releases any new opinions or sets additional cases for argument in the Fall term. In the meantime, we hope this overview of the cases the Court set for oral argument in September is useful to your practice.

Best Regards,

The Bassett Firm