In an opinion (link is to .pdf file) filed Wednesday, the Fifth Circuit affirmed a trial court decision to confirm an arbitral award which contained a punitive damages award for the arbitral plaintiff. The case involved a woman’s breach of fiduciary duty claims against the managers of an investment portfolio she received as part of a divorce settlement. The arbitral panel found that the investment company did in fact breach its duty to the Claimant, but that it could not award attorneys’ fees under the arbitration agreement and California substantive law. However, the panel did award the Claimant punitive damages, in the amount she had sought for attorneys’ fees. On appeal, the investment company argued that the court could not enforce the arbitral award’s punitive damages component. The opinion does not make any new law on this point, but it does provide another clear example of the steep burden a party must meet in attempting to prevent enforcement of an arbitration award in the Fifth Circuit. In the Fifth Circuit, two non-statutory (i.e. not found in the TAA or the FAA) grounds can exist for vacating an arbitral award: if the award displays manifest disregard of the law or is contrary to public policy. Neither basis for vacatur was found to exist in this case, but again, the opinion’s discussion of the elements of each is thorough and useful. Arbitral awards remain, for the most part, unappealable. Sarofim v. Trust Company of the West, Cause No. 05-20309 Technorati Tags: arbitration, ADR, Fifth Circuit, law

The Texas Supreme Court ruled this morning that Texans did not acquire the right to privately invoke the federal Telephone Consumer Protection Act (“TCPA”) until the Texas Legislature amended the Business & Commerce Code to allow Texas court to hear private suits based on the TCPA on September 1, 1999. The TCPA, which was passed in 1991, allowed individuals to sue companies that send unsolicited facsimile advertisements “if otherwise permitted by the laws or rules of court of a State.” The Act, which was required as many if not all of these faxes come from across state lines, also requires fax recipients to sue in state courts. However, Texas did not pass corresponding legislation allowing private claims under the TCPA until 1999. According to the Texas Supreme Court, therefore, companies that sent unsolicited fax advertisements after the TCPA was enacted but before September 1, 1999, got a free pass (at least in Texas) on what was clearly illegal conduct under federal law. The Court therefore reversed and rendered judgment on behalf of defendants in the underlying case, were the faxes in question were transmitted prior to 1999. Cause No. 04-0570, The Chair King, et al. v. GTE Mobilnet of Houston, Inc. et al. Technorati Tags: litigation, Texas Supreme Court, law

This morning, the Third Court of Appeals affirmed a Travis County trial court decision to grant a summary judgment in favor of the Comptroller’s office in a putative class action case which alleged that the Comptroller’s failure to pay interest on property returned to Texans under the Unclaimed Property Act constituted a taking. While the court’s analysis of the Unclaimed Property Act is perhaps not of general interest, the opinion does begin with an interesting discussion of the unusual results which Travis County’s Central Docket can inspire. In this case, the State filed a motion for summary judgment on the merits prior to the class certification hearing. Judge Keel heard the motion and denied it. Judge Triana then denied the State’s Motion for Rehearing. Judge Keel’s decision was apparently a result of the State’s having made an internal book-keeping error, which made it appear as though the State had in fact earned a great deal of interest on the unclaimed property it held on behalf of the putative class, which was not in fact eventually returned along with the property. After the State lost its MSJ and motion for rehearing, it apparently corrected and explained the clerical error and demonstrated that no interest was in fact earned. Judge Jenkins, presiding over the class certification hearing, actually ended up granting the state’s already-denied motion for summary judgment. The Third Court of Appeals included some of Judge Jenkins’ comments from the hearing expressing concern in its opinion, and it concluded that Judge Jenkins acted perfectly appropriately, as he had the power to set aside any interlocutory orders at any time before judgment (or actually until the Court’s plenary power had expired.) This opinion, therefore, could be quite useful for anyone practicing in Austin’s central docket who finds him or her self arguing that a trial judge can and perhaps ought to revisit an earlier decision by one of his or her colleagues Cause No. 03-05-00212-CV, Clark, et al. v. Texas Comptroller of Public Accounts Technorati Tags: litigation, Third Court of Appeals, law

This morning, the Texas Supreme Court issued a mandamus opinion in an arbitration case holding that a fired worker’s defamation claim against her erstwhile employer was subject to an arbitration agreement, which required arbitration of personal injury claims. According to the Court, since the agreement was susceptible to two reasonable interpretations, one holding that defamation is a personal injury and one holding that it is not, arbitration was required. The opinion also raises an interesting procedural issue. The arbitration agreement was similar to the one from Halliburton, in that it was given to a longtime employee who was told “to continue working here you must sign this.” The agreement, which was signed in 2000, was replaced by a slightly different version in 2002, but the employee was not required to sign the 2002 version. The 2002 version specifically provided that defamation cases must be arbitrated, so the employer initially argued that it applied, rather than the 2000 version. Eventually, however, the employer apparently shifted tactics, and argued instead that the 2000 agreement clearly applied, and it covered defamation (which makes one wonder why they felt the need to amend it). So, the Court did not really reach the issue of the extent to which an employer can modify these kind of agreements by simply providing an employee with a new version – an issue which comes up all the time, particularly in the credit card context. The Court seems to imply, however, that it would not look favorably on an agreement to arbitrate which allowed the employer to “retain a unilateral right to modify the agreement.” In Re: Dillard Department Stores, Inc., Cause No. 05-0250 Technorati Tags: arbitration, ADR, Texas Supreme Court, law