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Texas Supreme Court Weekly Update June 18, 2021

On Behalf of | Jun 18, 2021 | Texas Supreme Court Weekly Update

Over the last several weeks the Texas Supreme Court issued several opinions. This blog discusses two of those opinions, which provide guidance on several important issues.

First, in In re K&L Auto Crushers LLC and Thomas Gothard Jr., the Texas Supreme Court addressed first whether defendants are entitled to mandamus relief from the trial court’s rejection of their discovery requests to medical providers on the reasonableness of fees charged. This case involves a personal-injury suit after a motor-vehicle collided with a tractor-trailer rig. The Plaintiff moved to quash the subpoenas served by the Defendant’s and the trial court help in favor of the Plaintiff, quashing the subpoenas without a basis for its decision. The trial court later denied a motion for reconsideration and the appellate court denied the Defendant’s petition for writ of mandamus for failure to illustrate entitlement for relief. The defendants, a trucking company, and its driver, argue that the trial court abused its discretion by quashing their discovery requests, including the requests for information regarding the Plaintiff’s medical providers’ negotiated rates and costs. The issue in this case is like a case decided by the Texas Supreme Court in 2018 – In re North Cypress Medical Center. In re N. Cypress Med. Ctr. Operating Co., 559 S.W.3d 128, 129 (Tex. 2018) (The Court held that the negotiated rates a medical provider charges to patients’ private insurers were relevant and discoverable.).

On review, the Texas Supreme Court held that the defendant’s narrowed requests were relevant and thus the trial court abused its discretion by denying the defendants from discovery of that information. The Court reasoned that the narrowed requests were sufficiently tailored, the Plaintiff and the providers failed to provide evidence that established that the requests were unduly burdensome or harassing, and the trial court failed to consider whether a protective order would reasonably protect against the disclosure of any trade secrets or confidential information. Therefore, the Court reasoned that the information that they found relevant to the reasonableness in North Cypress is equally relevant here.

Next, in Aerotek Inc. v. Lerone Boyd et al., the Texas Supreme Court addressed two issues. First, how the efficacy of a security procedure is shown and second, once it is shown, whether an alleged signatory’s simple denial of signing the record is sufficient to prevent attribution of an electronic signature to him. This case involves a discrimination and retaliation action after the four Plaintiff’s were terminated from Aerotek. Aerotek moved to compel arbitration in accordance with the Mutual Arbitration Agreement (MAA) that all four Plaintiffs signed during the hiring process. But the four Plaintiffs opposed the motion arguing that they never saw or signed a MAA. After a hearing on Aerotek’s motion, the trial court refused to compel arbitration. The court of appeals, although divided, affirmed in part, and reversed in part. They reversed on the question of whether the electronic signature on the MAA was conclusive against the Plaintiffs despite their contentions otherwise.

The Texas Supreme Court held that the efficacy of a security procedure is shown and therefore, the electronic signatures are conclusively established. The Court reasoned that when parties to a transaction agree to proceed using electronic means, the Texas Uniform Electronic Transactions Act provides a standard for attributing electronic signatures to the parties of the transaction. According to Section 322.009(a), an “electronic signature is attributable to a person if it was the act of the person.” The Court reasoned that this can be shown in any manner, including, as seen here, a showing of the efficacy of any security procedure used to determine who the electronic signature is attributable to. A security procedure is defined in Section 322.002(13) as anything that’s purpose is to verify that “an electronic signature, record, or performance is that of a specific person or for detecting changes or errors in the information.” According to the Court, the efficacy of the security procedure provides a link between the electronic record stored and the persons that are apart of the transaction.

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