Western District of Texas Court Summaries

FEDERAL COURT UPDATE

By Soledad Valenciano, Melanie Fry, and Charles Carter

If you are aware of a Western District of Texas order that you believe would be of interest to the local bar and should be summarized in this column, please contact Soledad Valenciano (svalenciano@svtxlaw.com, 210-787-4654) or Melanie Fry (mfry@dykema.com, 210-554-5500) with the style and cause number of the case, and the entry date and docket number of the order.

First Amendment; Free Exercise

Tap Pilam Coahuiltecan Nation v. Alamo Trust, Inc., SA-19-CV-01084-OLG (Garcia, O., September 23, 2020).

During the renovation of the Alamo, human remains were discovered on the site. Plaintiffs are purported descendants of those people and state that one of their core religious beliefs is that a specific ceremony must be performed if a body is moved. Plaintiffs filed this action for injunctive relief to protect their interests amidst the on-going renovation of the Alamo. The court previously dismissed the state and local agencies from the suit on sovereign immunity or standing grounds. The remaining defendants, the CEO of Alamo Trust, Inc. and the Commissioner of the Texas General Land Office—the officials in charge of the “Alamo Plan” renovation—moved to dismiss the remaining claims. Plaintiffs claim that their exclusion from the human remains protocol set by defendants violated their equal protection and free exercise rights. Plaintiffs also claim that they were prohibited from performing a religious memorial ceremony in the Alamo Chapel in violation of their free exercise rights. The court rejected plaintiffs’ equal protection claim because they did not plead how they are treated differently than other purported descendants of the persons whose remains were found, who were also excluded from the human remains protocol. Without questioning the sincerity of plaintiffs’ religious beliefs, the court also rejected plaintiffs’ free exercise claim because inclusion in the human remains protocol and permission to enter the Alamo Chapel outside of operating hours (as plaintiffs requested) were not generally available benefits that defendants denied. Accordingly, the court refused to “extract” a benefit from defendants and dismissed the case.

Amount in Controversy; Pre-Suit Demand Letters

Southwest Research Inst. v. Cal. Fueling, LLC, SA-20-CV-00986-XR (Rodriguez, X., October 27, 2020).

Plaintiff, Southwest Research Institute (“SwRI”), entered into a contract to perform emission testing for Defendant California Fueling. After SwRI completed the testing and issued a final report, the defendant paid SwRI $256,000. Two years later, counsel for the defendant contacted SwRI to demand the money back due to SwRI’s alleged disclosure of biodiesel trade secrets to a competitor. SwRI sued the defendant in Texas state court for declaratory judgment that SwRI did not misappropriate intellectual property as well as other issues related to the resolution of the parties’ prior contract. Following the defendant’s removal of the case to federal court, SwRI moved to remand to state court, arguing that the defendant did not meet its burden to demonstrate the amount in controversy. The defendant relied on evidence regarding the $256,000 payment to support its amount in controversy argument. SwRI objected to this evidence on Rule 408 grounds because of a discussion of settlement demands in one of the defendant’s supporting affidavits. The court overruled SwRI’s objections and clarified that pre-suit demand letters can be used to determine whether the amount in controversy exceeds $75,000 but that such demands must represent a “reasonable estimation” of the amount in controversy. In doing so, the court determined that the defendant’s demand to return the $256,000 in settlement of its potential IP claims against SwRI was a reasonable estimate of how the defendant valued the claims on which SwRI now seeks a declaration. Accordingly, the court denied SwRI’s motion to remand.

Voting Rights; COVID-19 Response

Mi Familia Vota v. Abbott, SA-20-CV00830-JKP (Pulliam, J., October 27, 2020).

Plaintiffs generally allege that Texas election procedures preclude people in certain protected classes from voting because the procedures create unsafe conditions in light of COVID-19. The court granted a motion to dismiss on the ground that it did not have Article III power to grant the injunctive relief requested. The Fifth Circuit affirmed in part and reversed in part and remanded for further proceedings, including determination of three issues related to Exemption 8 of Governor Abbott’s Executive Order GA-29. Exemption 8 exempts anyone who is “voting, assisting a voter, serving as a poll watcher, or actively administering an election” from compliance with the statewide mask mandate. The issues presented by the Fifth Circuit were whether Exemption 8 violates Section 2 of the Voting Rights Act as applied; whether the court could resolve plaintiffs’ alleged injuries by invalidating Exemption 8; and whether invalidating Exemption 8 would “materially or substantially affect the ongoing election.” Following a thorough discussion, the court concluded that plaintiffs held a substantial likelihood of success on their claim that Exemption 8 violates Section 2 of the Voting Rights Act because it imposes a “voting practice or procedure that results in a denial or abridgement” of the right to vote for certain protected classes due to the disproportionate impact that COVID-19 has on those communities. The court also determined that invalidating Exemption 8 would resolve the alleged injury and would not “materially or substantially affect the ongoing election.” Accordingly, the court invalidated Exemption 8 but denied all other requests for injunctive relief. The Fifth Circuit subsequently stayed the court’s order pending appeal.

Discovery

Crisp v. Nissan Motor Corp., et al., SA-20CV-00220-XR (Rodriguez, X., October 20, 2020).

Husband died in a Nissan Frontier and his wife sued manufacturers alleging the vehicle was unreasonably dangerous because a feasible alternative design would not have resulted in a collapsed cabin. Explaining the contours of Rule 26(b)(1), the court held that because the plaintiff sought documents and information relating to other pickup trucks that were designed within roughly the same time period as the vehicle in question, and not a vehicle that is wholly different in nature, the requests seek information that is similar and therefore relevant. That the plaintiff could not already prove that the designs of other vehicles were safer is not a basis to deny discovery. In overruling defendants’ discovery objections, the court clarified that the scope of permissible discovery would include pickup models that are reasonably similar to the Nissan Frontier such that there exists a reasonable probability that inspection of their designs would aid in the determination of whether a feasible design alternative existed prior to the collision at issue. Defendants’ proffered affidavit was not helpful because it did not address the issue of whether safer alternative designs exist.

Class Certification of Collective Actions; Lusardi Approach

Ortiz v. Trinidad Drilling, LLC, SA-20-CV-00503-OLC-ESC (Chestney, E., September 14, 2020).

Plaintiff, an oil rig manager, alleged he worked 18-hour days under a 14-day on, 14-day off schedule, for a flat day rate with no overtime pay, in East Texas from 2012 to 2019. Plaintiff asked for certification of all oilfield workers employed by the defendants anywhere in the United States from April 23, 2017, through the disposition of the present case who were paid a day rate but no overtime. Unlike Rule 23 class actions, FLSA collective actions work under an “opt-in” method. The district court decides whether and how to give notice for putative plaintiffs to opt into the action. While the Fifth Circuit uses two approaches to guide its decision to certify a collective action, the Lusardi approach and the Shushan approach, here the court, like the majority of courts in the Fifth Circuit, used the Lusardi approach. The two-step Lusardi method includes a notice (i.e., certification) stage and a decertification stage. Plaintiff’s burden at the notice stage is to put forth “substantial allegations that the putative class members were together the victim of a single decision, policy or plan.” Here, the court declined to certify a nationwide class of workers, and instead certified “rig managers working in Texas.” As to the time period to include in the class definition, the court chose three years prior to the date of the certification (i.e., September 14, 2017) through the disposition of the case. This look-back period would allow members to opt in under the three year FLSA statute of limitations applicable to willful violations; however, the court declined to consider the issue of willfulness as that would be a merits decision that is inapplicable during the certification stage of FLSA litigation. The court also tolled the statute of limitations to effect the time period in the class definition.

Review of Social Security Administration Decision

Herrera v. Saul, SA-19-CV-00888-RBF (Farrer, R., September 25, 2020).

Plaintiff alleged that the administrative law judge who denied his request for social security benefits failed to fully and fairly develop the record in performing a residual-functionalcapacity assessment, and that in the absence of any medical opinion assessing plaintiff’s function limitations, the judge should have sought a medical opinion on the issue. On review, the court found substantial evidence in the record to support the decision and thus found no reversible error. In addition to the records reviewed by the court, plaintiff himself repeatedly denied any decreased functioning during the relevant period of disability. The administrative law judge did not err in failing to discuss the opinion of plaintiff’s doctor; rather, the administrative law judge implicitly acknowledged that opinion when he recognized and discussed issues related to PTSD. Further, the court found that even if the administrative law judge had erred by failing to fully develop the record, there was no prejudice. Here, plaintiff failed to point to evidence that would have led to a finding of greater mental-function deficits.

Soledad Valenciano practices commercial and real estate litigation with Spivey Valenciano, PLLC.

Melanie Fry practices commercial litigation and appellate law with Dykema Gossett PLLC.

Charles Carter practices commercial litigation with Dykema Gossett PLLC.