The Supreme Court of Texas recently reversed an order for sanctions against the defense attorney in a product-liability and wrongful-death case after finding a lack of evidence to support bad-faith.
In Brewer v. Lennox Hearth Prods., LLC, the attorney for a manufacturer of stainless-steel pipe appealed an order imposing sanctions on him after he surveyed the population from which jurors would be collected. In the underlying case, the parents of a boy who was killed in an explosion after lightning struck a house, sued a manufacturer of stainless-steel pipe that was installed in the house that the Plaintiff claimed triggered the explosion. The manufacturing company hired Brewer to defend them in the action and as part of his preparation for trial, Brewer worked with independent contractors who conducted a survey in the community to test litigation themes. Brewer did not inform the court or other parties about the survey before or during the survey period as there was no rule, statute, or court order requiring him to do so. However, once the Plaintiffs caught wind of the survey, they immediately requested a protective order and sought sanctions against Brewer alleging (1) that the survey was designed to intimidate witnesses and (2) that it violated disciplinary rules constraining pretrial publicity. The Plaintiffs claimed that the survey was a “push poll” designed to influence public opinion and taint the jury pool. Brewer argued that the survey was random and simply intended to gauge litigation strategies.
Shortly before trial, Brewer was discharged as the manufacturing company’s attorney and the underlying case settled before a jury venire was ever empaneled. A four-day sanctions hearing was then scheduled to take place in September and Brewer was informally notified of the hearing about a month prior. Brewer requested a continuance on the basis of lack of proper notice and the necessity of obtaining discovery, but the trial court denied his motion. Through the sanctions hearing, it became known that Brewer’s actual participation in developing the survey was minimal, and those who procured the survey stressed that it was randomly administered. However, the expert testimony offered varied across the board. At the conclusion of the hearing, the trial court took the matter under advisement and fifteen months later, issued a letter imposing sanctions against Brewer. The court stated that it “did not find that Brewer violated any disciplinary rules or other applicable authority, but instead concluded that Brewer’s conduct “taken in its entirety,” including actions of his agents and subordinates, was “an abusive litigation practice that harms the integrity of the justice system and the jury trial process” and was “intentional[,] in bad faith[,] and abusive of the legal system and the judicial process specifically.” Brewer first appealed to the Amarillo Court of Appeals, where the trial court’s ruling was upheld. After that, he appealed to the Supreme Court of Texas.
The Supreme Court of Texas specifically considered whether the trial court properly exercised its inherent authority to sanction Brewer based on the manner of the survey. The Court first set out that bad faith is required to support sanctions imposed under a court’s inherent authority, but noted that bad faith can exist without an explicit violation of a rule, statute, or ethical code of conduct, and direct evidence is not required. Further, the Court noted that actual interference with the jury venire, or potential jury venire, is not necessary for a showing of bad faith. The Court also recognized that pretrial surveys are not uncommon. Reviewing for abuse of discretion, the Court held that the sanctions ordered in the case could not stand because evidence of bad faith was lacking. The Court acknowledged that the survey was not without faults, but stated that the evidence showed that Brewer took reasonable efforts to secure a third-party industry professional to create a relatively balanced public opinion survey that was to be randomly administered. Brewer did not disobey any court order, nor did he violate any disciplinary rule. While leaving the matter of the survey entirely in a third party’s hands could constitute gross negligence, it does not give rise to a reasonable inference of bad faith. The Supreme Court of Texas concluded, after looking at the totality of the circumstances, that the trial court’s concerns may have been reasonable, but the finding of bad faith was factually unsupported. Ultimately the court of appeals’ judgment upholding the sanctions was reversed and the sanctions order was vacated.
Brewer v. Lennox Hearth Prods., LLC, 63 Tex. Sup. Ct. J. 863 (2020).
