Key Legal Developments in Texas Business Cases
T
o
p
B
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s
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n
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a
s
t
1
8
M
o
n
t
h
s
Beau Cox, Partner
Sarah Cornelia, Associate
Jackie Baker, Associate
Dallas, Texas
August 20, 2020
Key Legal Developments
2
1.
Texas Continues to Favor Contracts Over Equity
2.
Texas Anti-SLAAP Statute Issues Resolved
3.
Courts Retain Some Control in Class Arbitration
4.
Texas Clarifies Attorney’s Fees Calculation Method
M
OOT
C
OURT
E
XERCISE
1
I
SSUE
2: D
O
CONTRACTUAL
DISCLAIMERS
OF
RELIANCE
ON
PRIOR
REPRESENTATIONS
BAR
FRAUDULENT
INDUCEMENT
CLAIMS
?
Int’l Bus. Mach. Corp. v. Lufkin Indus.
, 573 S.W.3d 224 (Tex. 2019)
I
SSUE
1: D
O
LIMITATION
-
OF
-
LIABILITY
CLAUSES
REMAIN
ENFORCEABLE
WHERE
FRAUD
IS
PRESENT
?
Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC
, 572 S.W.3d 213 (Tex. 2019)
4
Holding: Limitation-of-Liability Clauses Remain In
Full Effect Where Fraud Is Present
L
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t
:
•
“[F]raud vitiates whatever it touches.”
•
But, “We have never held, however, that fraud vitiates a
limitation-of-liability clause.”
Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC
, 572 S.W.3d 213
(Tex. 2019)
5
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o
n
:
•
A merger clause on its own does not prevent a fraudulent
inducement action.
•
But, a provision “that clearly and unequivocally expresses the
party’s intent to disclaim reliance on the specific
misrepresentations at issue can preclude a fraudulent
inducement claim.”
Int’l Bus. Mach. Corp. v. Lufkin Indus.
, 573 S.W.3d 224 (Tex. 2019)
Holding: Sophisticated Parties Can Disclaim
Reliance On Prior Representations To Bar
Fraudulent Inducement Claim
6
Another Case Worth Mentioning
Interpret a contract by looking at the contract itself
•
Undefined words are generally given their “common, ordinary
meaning,” BUT…
•
The usage of the term in one part of the contract generally
applies to all instances of that term in the contract
Anadarko Petroleum Corp. v. Hous. Cas. Co.
, 573 S.W.3d 187 (Tex. 2019)
T
EXAS
C
ITIZENS
P
ARTICIPATION
A
CT
I
SSUES
R
ESOLVED
I
SSUE
1:
D
OES
THE
TCPA A
PPLY
IN
F
EDERAL
C
OURT
?
Klocke v. Watson
, 936 F.3d 240 (5th Cir. 2019)
M
OOT
C
OURT
E
XERCISE
2
I
SSUE
2:
D
OES
THE
TCPA P
ROTECT
B
USINESS
-R
ELATED
C
OMMUNICATIONS
?
Palladium Metal Recycling, LLC v. 5G Metals, Inc.
, No. 05-19-00482-CV, 2020 WL 4333538
(Tex. App.—Dallas July 28, 2020)
9
Holding: The TCPA Does Not Apply in Diversity
Cases in Federal Court
The TCPA is procedural, not substantive, in nature and therefore
does not apply in diversity cases in federal court
•
It imposes additional procedural requirements not found in the
Federal Rules
•
It requires courts to weigh evidence in a way inconsistent with
the Federal Rules
Klocke v. Watson
, 936 F.3d 240 (5th Cir. 2019)
10
Holding: The TCPA Does Not Protect Purely
Business-Related Communications
The TCPA does not protect communications related to business
transactions
•
The right of association does not include communications when
the common interest is a private business transaction
•
The right of free speech does not include communications about
private, pecuniary interests
Palladium Metal Recycling, LLC v. 5G Metals, Inc.
, No. 05-19-00482-CV, 2020 WL
4333538 (Tex. App.—Dallas July 28, 2020)
C
OURTS
VS
. A
RBITRATORS
:
W
HO
C
ONTROLS
IN
C
LASS
A
RBITRATIONS
?
I
SSUE
: D
OES
THE
C
OURT
OR
A
RBITRATOR
D
ECIDE
W
HETHER
THE
P
ARTIES
A
GREED
TO
C
LASS
A
RBITRATION
?
20/20 Commc’ns, Inc. v. Crawford
, 930 F.3d 715 (5th Cir. 2019)
Robinson v. Home Owners Mgmt. Enters., Inc.
, 590 S.W.3d 518 (Tex. 2019)
Henry Schein, Inc. v. Archer & White Sales, Inc.
, 139 S. Ct. 524 (2019)
M
OOT
C
OURT
E
XERCISE
3
13
Holding: Courts (for the most part) Decide Whether
Parties Agreed to Class Arbitration
Courts, not arbitrators, must determine whether parties agreed to
arbitration in class actions
•
Class arbitration is a “gateway” issue to be decided by courts
20/20 Commc’ns, Inc. v. Crawford
, 930 F.3d 715 (5th Cir. 2019)
Robinson v. Home Owners Mgmt. Enters., Inc.
, 590 S.W.3d 518 (Tex. 2019)
E
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Henry Schein, Inc. v. Archer & White Sales, Inc.
, 139 S. Ct. 524 (2019)
Robinson v. Home Owners Mgmt. Enters., Inc.
, 590 S.W.3d 518 (Tex. 2019)
T
EXAS
C
LARIFIES
A
TTORNEY
’
S
F
EES
C
ALCULATION
M
ETHOD
I
SSUE
: W
HAT
METHOD
SHOULD
BE
USED
TO
CALCULATE
REASONABLE
ATTORNEY
’
S
FEES
?
Rohrmoos Venture v. UTSW DVA Healthcare, LLP
, 578 S.W.3d
469 (Tex. 2019)
M
OOT
C
OURT
E
XERCISE
4
16
Holding: Lodestar Method Applies When Calculating
Attorney’s Fees in Texas
The Lodestar Method should be the fact finder’s starting point for
calculating an attorney’s fee award
•
Reasonable hours worked x reasonable rate = presumptively
reasonable award
Rohrmoos Venture v. UTSW DVA Healthcare, LLP
, 578 S.W.3d 469 (Tex. 2019)
Questions?
17
Beau Cox
beau.cox@nortonrosefulbright.com
(214) 855-7494
Sarah Cornelia
sarah.cornelia@nortonrosefulbright.com
(214) 855-7462
Jackie Baker
jackie.baker@nortonrosefulbright.com
(214) 855-8048
19
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Texas continues to favor contracts over equity, with key legal developments covering issues such as limitation-of-liability clauses, anti-SLAPP statute, attorney fees calculation, and fraudulent inducement claims. Recent cases emphasize the enforceability of contractual clauses, particularly in cases involving fraud and sophisticated parties. Interpretation of contracts and resolving disputes under the Texas Citizens Participation Act are also highlighted.
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Presentation Transcript
Top Business Cases of the Last 18 Months Beau Cox, Partner Sarah Cornelia, Associate Jackie Baker, Associate Dallas, Texas August 20, 2020
Key Legal Developments 1. Texas Continues to Favor Contracts Over Equity 2. Texas Anti-SLAAP Statute Issues Resolved 3. Courts Retain Some Control in Class Arbitration 4. Texas Clarifies Attorney s Fees Calculation Method 2
MOOT COURT EXERCISE 1 ISSUE 1: DOLIMITATION-OF-LIABILITYCLAUSESREMAINENFORCEABLEWHERE FRAUDISPRESENT? Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC, 572 S.W.3d 213 (Tex. 2019) ISSUE 2: DOCONTRACTUALDISCLAIMERSOFRELIANCEONPRIOR REPRESENTATIONSBARFRAUDULENTINDUCEMENTCLAIMS? Int l Bus. Mach. Corp. v. Lufkin Indus., 573 S.W.3d 224 (Tex. 2019)
Holding: Limitation-of-Liability Clauses Remain In Full Effect Where Fraud Is Present Limitation-of-liability clauses remain in full effect, even where fraud is present: [F]raud vitiates whatever it touches. But, We have never held, however, that fraud vitiates a limitation-of-liability clause. Bombardier Aerospace Corp. v. SPEP Aircraft Holdings, LLC, 572 S.W.3d 213 (Tex. 2019) 4
Holding: Sophisticated Parties Can Disclaim Reliance On Prior Representations To Bar Fraudulent Inducement Claim Sophisticated parties can disclaim reliance on prior representations, barring a fraudulent inducement action: A merger clause on its own does not prevent a fraudulent inducement action. But, a provision that clearly and unequivocally expresses the party s intent to disclaim reliance on the specific misrepresentations at issue can preclude a fraudulent inducement claim. Int l Bus. Mach. Corp. v. Lufkin Indus., 573 S.W.3d 224 (Tex. 2019) 5
Another Case Worth Mentioning Interpret a contract by looking at the contract itself Undefined words are generally given their common, ordinary meaning, BUT The usage of the term in one part of the contract generally applies to all instances of that term in the contract Anadarko Petroleum Corp. v. Hous. Cas. Co., 573 S.W.3d 187 (Tex. 2019) 6
MOOT COURT EXERCISE 2 ISSUE 1: DOESTHE TCPA APPLYIN FEDERAL COURT? Klocke v. Watson, 936 F.3d 240 (5th Cir. 2019) ISSUE 2: DOESTHE TCPA PROTECT BUSINESS-RELATED COMMUNICATIONS? Palladium Metal Recycling, LLC v. 5G Metals, Inc., No. 05-19-00482-CV, 2020 WL 4333538 (Tex. App. Dallas July 28, 2020)
Holding: The TCPA Does Not Apply in Diversity Cases in Federal Court The TCPA is procedural, not substantive, in nature and therefore does not apply in diversity cases in federal court It imposes additional procedural requirements not found in the Federal Rules It requires courts to weigh evidence in a way inconsistent with the Federal Rules Klocke v. Watson, 936 F.3d 240 (5th Cir. 2019) 9
Holding: The TCPA Does Not Protect Purely Business-Related Communications The TCPA does not protect communications related to business transactions The right of association does not include communications when the common interest is a private business transaction The right of free speech does not include communications about private, pecuniary interests Palladium Metal Recycling, LLC v. 5G Metals, Inc., No. 05-19-00482-CV, 2020 WL 4333538 (Tex. App. Dallas July 28, 2020) 10
COURTSVS. ARBITRATORS: WHO CONTROLSIN CLASS ARBITRATIONS?
MOOT COURT EXERCISE 3 ISSUE: DOESTHE COURTOR ARBITRATOR DECIDE WHETHERTHE PARTIES AGREEDTO CLASS ARBITRATION? 20/20 Commc ns, Inc. v. Crawford, 930 F.3d 715 (5th Cir. 2019) Robinson v. Home Owners Mgmt. Enters., Inc., 590 S.W.3d 518 (Tex. 2019) Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019)
Holding: Courts (for the most part) Decide Whether Parties Agreed to Class Arbitration Courts, not arbitrators, must determine whether parties agreed to arbitration in class actions Class arbitration is a gateway issue to be decided by courts 20/20 Commc ns, Inc. v. Crawford, 930 F.3d 715 (5th Cir. 2019) Robinson v. Home Owners Mgmt. Enters., Inc., 590 S.W.3d 518 (Tex. 2019) Except when a contract expressly delegates specific questions of arbitrability to the arbitrator Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019) Robinson v. Home Owners Mgmt. Enters., Inc., 590 S.W.3d 518 (Tex. 2019) 13
TEXAS CLARIFIES ATTORNEYS FEES CALCULATION METHOD
MOOT COURT EXERCISE 4 ISSUE: WHATMETHODSHOULDBEUSEDTO CALCULATEREASONABLEATTORNEY SFEES? Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019)
Holding: Lodestar Method Applies When Calculating Attorney s Fees in Texas The Lodestar Method should be the fact finder s starting point for calculating an attorney s fee award Reasonable hours worked x reasonable rate = presumptively reasonable award Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019) 16
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