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The Lifetime Appointment of JUDGE JASON K. PULLIAM
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contents ON THE COVER 6 The Lifetime Appointment of Judge Jason K. Pulliam: An American Dream in 1,000 “Easy” Steps
By Ryan V. Cox
FEATURES 11 Ray Battaglia: A Man on a Mission
By Pat Autry
14 Notorious Business Trusts
By Harry L. Munsinger, J.D., Ph.D.
22 Cue the Confetti: St. Mary’s Law School Women Are Leading Where Decisions Are Being Made
By Sara Dysart
6 Judge Jason K. Pulliam photographed for San Antonio Lawyer by Mewborne Photography
DEPARTMENTS
BAR BUSINESS
5 Feedback
19 Th irty-Five Years of the William S. Sessions American Inn of Court
27 Fourth Court Update
By Susan Cone Kilgore
By Justice Liza Rodriguez
28 Federal Court Update
By Soledad Valenciano and Melanie Fry
July–August 2021
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®
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The Lifetime Appointment of JUDGE JASON K. PULLIAM An American Dream in 1,000 “Easy” Steps
By Ryan V. Cox
Cover and article photography by Mewborne Photography 6 San Antonio Lawyer® | sabar.org
(Left to Right) Judge Pulliam with his older brother, Charles Pulliam, whom he would later follow into the United States Marine Corps; Judge Pulliam at kindergarten graduation in Brooklyn, 1977; Judge Pulliam in uniform for James Madison High School in Brooklyn, where he played tight end and outside linebacker, 1988; Judge Pulliam’s official court portrait, taken after his swearing-in in the fall of 2019.
Photos courtesy of Judge Jason Pulliam
O
n a rainy Thursday in February of 2020, just weeks before the COVID-19 pandemic would put a hold on all public events, a crowd of hundreds piled into the Lila Cockrell Theatre in downtown San Antonio for the formal investiture of newly appointed United States District Judge Jason K. Pulliam. When the new Judge took the podium, tears welled as he began to describe the long road from a working-class Brooklyn family relying on public assistance to a lifetime judicial appointment from the President of the United States. As he addressed his mother directly, it became clear to the audience that the American Dream the Judge was describing was both unlikely, and, at the same time, a dream worth dreaming. There he stood as living proof that this dream can come true with hard work and the willingness to take risks, ask for help, and commit oneself to a lifetime of service. While these seemed like reasonable prerequisites, though, it was clear that all the steps in between made such a dream possible: the writing, the research, the personal and professional growth, the maintenance of close relationships, a reputation for honesty and fairness, and so many other steps along the way. If there were a guide to such a dream, perhaps it would describe how to put oneself in the right place, with the right skills, at the right time—not a singular goal, but a constant grind. Or, perhaps it would say, “Just follow these 1,000 ‘easy’ steps.”
Improvise, Adapt, and Overcome As a teenager, Judge Pulliam had been a contemporary of the racially charged environment in New York City after the “Howard Beach Incident,” in which three young African-American men had been attacked by a mob screaming racial slurs. That attack resulted in the death of one of the men—and manslaughter convictions for three of the attackers. This turbulent period continued throughout the 1980s, up to the mob shooting of Yusuf Hawkins in 1989, and was squarely in the public eye as Pulliam came of age. These events informed his outlook on the fairness of the criminal justice system and the judiciary—a worldview that he would take with him through his studies, and later as a criminal defense lawyer and judge. Pulliam felt as though everyone was looking for a way to escape these clashes of race and culture, one way or another. July–August 2021
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One of the most important of these relationships was with a retired Marine Corps Major, who encouraged Pulliam to consider combining his early interest in military service with his new training and education and recruited him to become a Judge Advocate in the Marine Corps.
After graduating high school early in January 1989, Pulliam had wanted to follow his older brother into the Marine Corps right away. This seemed like an opportunity for immediate leadership, stable income, travel, and the not-otherwise-guaranteed chance to get out of Brooklyn. Besides, the uniforms were sharp. Pulliam was only 17, though, so he needed parental permission to enlist in the Marines, and his mother was determined that he should go to college instead. As usual, Mom got her way, and the young Pulliam enrolled at Brooklyn College, where he would spend the next six years earning his bachelor’s and master’s degrees in political science. He excelled in these studies, giving him the opportunity to serve as a graduate intern in the New York State Legislature, where he began to learn the benefits and opportunities available if he continued on to law school. The following year, he was accepted to the law school at Texas Southern University, the Houston HBCU that had trained thousands of successful African-American lawyers across the country. Pulliam would go on to join its law review, graduate near the top of his class, and develop a number of impactful relationships that would shape his career for years to come. One of the most important of these relationships was with a retired Marine Corps Major, who encouraged encouraged Pulliam to consider combining his early interest in military service with his new training and education and recruited him to become a Judge Advocate in the Marine Corps. While still excelling in his studies, Pulliam took the opportunity to attend Officer Candidate School after his second year, eventually
8 San Antonio Lawyer® | sabar.org
accepting his commission as an officer following his law school graduation in 2000. After finishing Naval Justice School (the program in which new Judge Advocates are trained in military law), Pulliam had his first post assignment at Camp Lejeune, North Carolina—home to a major Naval Hospital and a primary facility for Marine Corps amphibious assault training. Camp Lejeune also happened to be one of the busiest legal offices in all of the Department of Defense. Pulliam served as criminal defense counsel for Marines facing court martial, amassing significant in-court experience that he would later draw upon in private practice and on the bench. Soon, Pulliam began to excel as a criminal defense attorney, and in 2002, he was awarded the DECOY award—aptly presented in the form of a carved wooden duck—recognizing him as “Defense Counsel of the Year,” a prestigious award given to just one Judge Advocate in each of the Marine Corps’ two regions. When it came time to leave the Marine Corps, Pulliam had to decide where to pursue his legal career. His friend Mark Cooper, a former colleague in the Camp Lejeune office of defense counsel, had moved to San Antonio to join long-time litigation powerhouse Ball & Weed (later leaving with several others to join Naman Howell). Cooper impressed upon Pulliam the collegiality of the San Antonio Bar and the significant opportunities for former military lawyers in “Military City, USA.” Paired with his Bar Admission in Texas from having attended Texas Southern University, it made sense to consider Texas over his native New York or other opportunities he had considered around the country. So when he connected
with Craig Carlson, another former military lawyer and managing partner of the Carlson Law Firm—who was looking to expand his Texas offices—Pulliam found an opportunity and a mentor. He would come back to Texas, initially to practice criminal defense and plaintiff-side personal injury litigation. Opportunity begets opportunity, though, and Pulliam would soon join his former colleague at Ball & Weed before leaving to join Bill Ford’s new firm (then Ford & Massey, P.C.), which was emerging as a major force in San Antonio in the late 2000s. In Ford, Pulliam gained another friend and mentor who would be instrumental in his professional growth. Ford encouraged Pulliam to pursue his continued interest in public service and supported Pulliam’s run for Judge of the Bexar County Court at Law No. 5 in 2010, a race Pulliam won by a tight 3% margin.
Semper Fidelis After taking the County Court bench in 2011, Pulliam would preside over some 100 criminal and civil trials over the next five years. As a former criminal defense attorney, and from his background in Brooklyn, Pulliam understood, more than most, the circumstances to which many of the people in his court were subject. He prioritized diversion programs and education over severe punishments for nonviolent offenders, and he recognized the role that race and class played in determining who was in his court and why. He deprioritized punishments that would likely set defendants up for failure, such as long community service sentences that resulted in little or no effect on recidivism but, nevertheless, took defendants
away from jobs and educational pursuits that would better allow them to grow and meet their family needs. He had witnessed first-hand how education could uplift members of his community through opportunity and personal pride, so there seemed little reason to force defendants to perform tedious community service when they could instead be excused by completing a GED. In 2014, Pulliam was reelected with a wider margin of victory than in his first race, and he continued to serve on the County Court until 2015, when he was appointed to a vacancy on the Fourth Court of Appeals. In his time at the Fourth Court, he authored more than 200 written opinions for the large, thirty-twocounty district served by the court. When his bid to hold that seat in the larger court-ofappeals district missed by a few percentage points, Pulliam was immediately primed for a resurgence of his trial practice. He joined Prichard Young, LLP and worked under the astute tutelage of David M. Prichard and Kevin Young. Governor Abbott also appointed Pulliam to the Public Safety Commission, which oversees the Texas Department of Public Safety and its 10,000+ employees.
Hurry Up and Wait Nearly immediately after Pulliam was back in private practice in 2017, interest in Washington about his possible service on the federal bench began to grow. San Antonio had held a vacancy on the United States District Court bench for nearly a decade, and Senate and White House leadership were determined to fill every possible vacancy they could, as quickly as possible. Pulliam soon became aware that the road to appointment through the “pre-appointment” process is difficult. A candidate must complete all appointment requirements up front, with no guarantee that anything will ever come of those efforts, and then engage in a waiting game, as his or her information is collected by the FBI, the Office of Chief Policy Council, individual Senators, and other interested governmental apparatus. A candidate must provide lists of names, and the FBI visits everyone on the lists, discussing anything and everything with former colleagues, ex-spouses, neighbors, professors, and anyone they think might have information. The process tries to prevent any surprises, even as to someone like Pulliam, who
had previously spent six years on the bench in San Antonio. Also, in the 21st Century, the pre-appointment process includes a blistering search of internet history, communications, public posts and comments, friends and relationships, and more—something perhaps many young lawyers have not fully considered. For Pulliam, like many before him, this was a grueling process, characterized by long periods with no communication or feedback from the investigators. By early 2019, though, the gears had begun to turn with more transparency, and he was invited to meet with Senators and others. His early education and interest in political theorists like John Locke—and his later research on the philosophy of judging through books like Reading Law by Justice Antonin Scalia and Bryan Garner—offered particularly good preparation for these interview-like conversations and, eventually, for Senate hearings. After more than two years of silent waiting and consideration, his hearing was called in the summer of 2019. Partisan divisions seemed apparent, but he was passed through committee and was ultimately confirmed by a vote of 54-36 in the full Senate on July 31, 2019.
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San Antonio Lawyer® 9
lawyers and staff, and implementing a plan for remote proceedings. But, unlike the grinding halt experienced by state courts, the federal court was already relatively well-situated for these changes, with practice at the court being so heavily based upon written briefs and the remote-friendly CM/ECF filing system. While some standard operating procedures were upset by the emergency orders, Judge Pulliam was mostly able to navigate the difficult year “full-speed ahead,” with assistance from the CARES Act, which allowed criminal plea and sentencing hearings to be conducted remotely, and also permitted remote hearings for civil matters at the court’s discretion. The changes in the standard operating procedures did highlight some differences between being a federal district court judge and serving on the County Court bench, however. For instance, Judge Pulliam has seen fewer filings and experienced a much slower pace than he experienced at the Bexar County Courthouse—all to be expected, but amplified by the pandemic. In a difficult year, some lessons have made themselves known as the court was forced to implement new technologies and procedures. One new procedure, in particular, is the use Pulliam’s mother attended the Senate hearings, and maybe for the first time throughout the years-long process, she understood the magnitude of her son’s achievement as he was questioned by Senators at the Capitol. Judge Pulliam would be the first African-American judge in the long history of the Western District of Texas, which stretches from Waco to Del Rio, and El Paso to Austin, and he would finally bring the San Antonio Division of the court back to full operating capacity. The significance of his historic racebarrier-breaking appointment is not lost on the Judge, even if it was not a factor in his appointment. As both a defense lawyer and a judge, he had seen the importance of having a diverse bench, where defendants can see themselves represented and feel as though they truly received a fair shot. Experience had shown him that having a diverse bench can positively affect community trust in the legal system, especially for citizens of color.
A FUBAR Freshman Year1
of remote proceedings in civil cases, saving parties, counsel, and the courts significant time and resources. While Judge Pulliam has been known to prefer more frequent hearings than some of his colleagues (allowing him to meet the lawyers and discuss the issues in a way that simply cannot be done by written brief ), the implementation of remote video proceedings has been effective and will likely continue long after the pandemic has ended. Whatever happens in the future, Judge Pulliam is well equipped to adapt to any such changes, as evidenced by his lifelong history of successfully doing so in the past. Ryan V. Cox is a Senior Attorney with the Texas Civil Rights Project in San Antonio.
ENDNOTES “FUBAR” is an acronym for “fouled-up” beyond all recognition, and it means to break or severely damage (something) or to make a mess of (something). See https://www.merriam-webster.com/dictionary/fubar (last visited 6/16/21). 1
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At his investiture ceremony in February 2020, no one could have known what the rest of Judge Pulliam’s first year on the federal bench would become. Within just a few weeks, Chief Judge Orlando Garcia would issue emergency orders closing the courthouse to
10 San Antonio Lawyer® | sabar.org
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RAY BATTAGLIA: A Man on a Mission By Pat Autry
Ray Battaglia’s passion project is ChildSafe, a local nonprofit that aids abused and neglected children.
T
hese days, Ray Battaglia gets to his office earlier than he ever has in his nearly forty years of law practice. It is not because his practice area, bankruptcy, benefitted from the turmoil of 2020. And it is not because “The Law,” that jealous mistress, demands every waking hour. Rather, it is because, in 2015, Ray decided to practice law differently. He left his shareholder position at Strasburger & Price LLP (now Clark Hill Strasburger) on good and friendly terms and moved his law practice to his home. Many would resist having their occupation intrude upon the sanctity of their home, but it works for Ray. “I realized that I didn’t need to work 200 hours a month and bill at $500 an hour in order to make a good living.” Ray, his wife Rachel, and several Huskies live comfortably. And, yes, business has been good. Ray is a bankruptcy lawyer—representing both sophisticated creditors and debtors. He is Board Certified in Business Bankruptcy Law and was one of the founding members of the local Bankruptcy Bar Association and the Larry E. Kelly American Bankruptcy Inn of Court. He spends more time counseling than
he does prepping witnesses or wading through exhibits and discovery. Yet, he is no stranger to the courtroom and is a well-respected and knowledgeable advocate for his clients. Ray arrived in San Antonio in 1976. His father worked for government contractors in various parts of the United States. Ray was born in Brockton, Massachusetts, and spent his early years in the Northeast. After the family moved to San Antonio, Ray attended and graduated from Churchill High School. His first year and a half of college were spent at Boston College. A victim of the spiraling costs of a private college, he transferred to UTAustin. He found, though, that burnt orange was not his favorite color, and he finished his undergraduate studies at the University of Texas at San Antonio. He went on to law school at the University of Houston and graduated in 1983. A summer internship with Oppenheimer, Rosenberg, Kelleher & Wheatley, with John Tate as his mentor, led Ray to his career. The Oppenheimer firm was at, or near, the center of commercial and real estate transactions in the 1970s and 1980s. When the financial
Ray Battaglia
markets contracted in the early 1980s (oil) and the mid-1980s (real estate and the savings and loan collapse), “trial by fire” might be a good way to describe the life of the San Antonio bankruptcy lawyer. The prominence of the Oppenheimer firm ensured that, as a young lawyer, Ray was rapidly introduced to July–August 2021
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ChildSafe’s new facility provides a safe and calm environment where children and their families can be counseled.
complex financing and ownership structures. At Oppenheimer, Ray learned how to critique the deal and counsel the participants. Forced to select a case that qualifies as his favorite, he would choose his representation of asbestos claimants in the four-year case of ASARCO, one of the world’s largest copper mining and refining operations, which filed for bankruptcy relief in Corpus Christi. The asbestos claims arose from a Canadianbased mining operation in the 1970s, which ASARCO had subsequently acquired. Several years of hard-fought litigation and bankruptcy negotiations yielded a very good result for the asbestos claimants. But as significant as the ASARCO case was from a legal and monetary standpoint, Ray also appreciates the personal satisfaction of helping those affected by the financial wreckage of a failed business or a failed marriage. Ray discovered another way to help individuals, too. Ray’s father-in-law, Larry Mathews, a former Assistant United States Attorney, sat on the board of a local nonprofit called ChildSafe, which aids abused and neglected children. ChildSafe is one of about seventy-two child advocacy centers (“CACs”) across Texas, acting on referrals from law enforcement and Child Protective Services, facilitating the delicate process of interviewing 12 San Antonio Lawyer® | sabar.org
and counseling abused children and their protective family members. While the principal goal is to support the child, a CAC also assists in the prevention and prosecution of child abuse. A central goal of a CAC is to take the lead in interviewing the abused child and in keeping that child from having to tell the worst story of his or her life repetitively to doctors, police, prosecutors, defense counsel, and therapists. ChildSafe originated in 1989 and was then known as the Alamo Children’s Advocacy Center. Services were first offered from a facility on U.S. Highway 90 West in
1997. The organization adopted the name “ChildSafe” in 2007. As the mission of ChildSafe developed and expanded, the need for sophisticated financial planning grew with it. Larry Mathews felt that Ray’s knowledge and skills would prove useful to the growing organization. Ray has been a member of the ChildSafe board of directors for ten years and has been Chairperson for the last eight. Working closely with Kim Abernethy, the President and CEO of ChildSafe, Ray and the other board members have stabilized the organization and bolstered the confidence that referring organizations must have in a CAC.
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Ray Battaglia and ChildSafe CEO Kim Abernethy stand in the lobby of KSAT News as they publicize “Cardboard Kids,” a community campaign created by ChildSafe to promote awareness of child abuse and neglect in Bexar County.
In August 2019, Child Safe began providing services from its fifteen-acre campus and the Harvey E. Najim Children & Family Center. The campus is located in east San Antonio about where Houston Street bisects IH-10. The 64,000-square-foot center, designed by Overland Partners and constructed by Guido Construction, includes play areas, green spaces, therapy facilities, interview facilities, and the administrative space needed by ChildSafe. Child Protective Services and law enforcement also have suites within the center. The center is a safe and calm environment where the children and their families can be counseled. ChildSafe is the first urban CAC to house a twenty-four-hour crisis intervention center for minor sex trafficking victims, the only CAC in the nation using trauma-based Adventure Therapy, and the only urban center using its natural surroundings as a restorative feature to reduce the impact of first-degree trauma suffered by children and second-degree trauma experienced by frontline staff members. ChildSafe’s most recent annual service statistics reflect the enormity of the task at hand. In 2020, ChildSafe provided intervention services to more than 5,000 children and their families and conducted nearly 2,000 forensic interviews of children who had made an outcry of abuse. Nearly 6,500 counseling sessions were provided to victims of abuse and their caregivers. All of this happened in a year in which the COVID-19 pandemic restricted opportunities for children
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to make an outcry. “Practicing law can be an all-consuming endeavor with a narrow focus,” Ray observes. “ChildSafe has been an opportunity for me to contribute my time and talent to a truly important mission.” Ray intends to continue practicing law for the foreseeable future. Having lived through the 1980s, he sees potential for financial restructuring work in the local real estate and construction industries. Beyond that, he envisions practicing a hobby or another vocation yet to be determined when he decides
to reduce the time spent practicing law. And, of course, he will continue to volunteer as long as his participation is valuable to someone. Pat Autry is a member of Branscomb Law in its San Antonio office. He is Vice Chair of the SABA Publications Committee, and he has served as one of the editors of the San Antonio Lawyer® for more than 20 years. July–August 2021
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Notorious Business Trusts
By Harry L. Munsinger, J.D., Ph.D.
T
he idea of using a trust to own related businesses was developed by Samuel C.T. Dodd, Standard Oil’s General Counsel, during the American Civil War.1 Business trusts allowed companies to cooperate and keep the price of manufactured goods such as kerosene, finished steel, and cigarettes stable, ostensibly benefiting American consumers. Economists of the time believed business trusts would reduce ruinous competition and bring order, stability, and reasonable prices to American consumers. The Standard Oil Trust was among the first of these arrangements, and its success in stabilizing supply and consumer prices inspired others to adopt the model. However, when the United States government investigated these business trusts, it discovered that the trusts were using unfair business tactics to reduce competition and earn huge profits at the expense of consumers. The operations of business trusts violated a basic tenant of capitalism—that competition lowers prices and spurs development of new products. Eventually, this led to the passage of the Sherman Antitrust Act and the famous “trust busting” efforts by the federal government in the early twentieth century. Existing business trusts were investigated, charged, tried, convicted of restraints of trade, and forced to break up their monopolies by the United States Department of Justice and the United States Supreme Court. Business trusts were gradually phased out in favor of holding companies, which are limited in their power to restrain trade and exercise monopoly pricing power.
The Standard Oil Trust The Standard Oil Trust was established in 1863 by John D. Rockefeller. By 1868, the Standard Oil Trust was the largest oil refiner in the world, producing primarily kerosene for home lighting. Rockefeller 14 San Antonio Lawyer® | sabar.org
consolidated his oil businesses and invited other business owners to transfer their shares to the Standard Oil Trust, in return for a beneficial interest in profits from the trust. Standard Oil Trust ultimately owned fourteen corporations and exercised control over twenty-six others, creating a monopoly in the production, refining, transportation, and marketing of kerosene in America. Rockefeller claimed he established the Standard Oil Trust to improve the organization and efficiency of his many business interests, but he was accused by journalists and Congressmen of abusing his market power by gaining monopoly control of the oil industry, artificially holding prices at a steady high level, and limiting competition in the sale of kerosene to the public. The Standard Oil Trust organized committees to control crude oil production, refining, transportation, and marketing—stabilizing the price Americans paid for kerosene to light their homes.2 However, the stable price of kerosene was deceptive, because the cost of drilling and pumping crude oil, transporting it to market, refining the oil, and distributing kerosene to consumers decreased substantially under the control of Standard Oil Trust. Rather than pass these savings on to their customers, Rockefeller and his trust partners pocketed the profits. Customers did not complain because they were able to buy ample supplies of kerosene at a stable price. Until the invention of the internal combustion engine for motor vehicles, gasoline was a worthless by-product of refining kerosene. Soon after the invention of the automobile, however, gasoline became Standard Oil’s most important product and earned the trust millions of dollars annually. The Standard Oil Trust was eventually forced to split into several independent oil companies through enforcement of the Sherman Antitrust Act.
The U.S. Steel Trust3 J.P. Morgan founded U.S. Steel in 1901, and at its height, the U.S. Steel Trust controlled approximately 60% of the steel industry. Andrew Carnegie, owner of the largest steel manufacturing company in American, was not impressed with Morgan’s idea, predicting that Morgan—a New York banker who knew nothing about running a giant steel company—would fail. Carnegie liked competition and initially declined to join Morgan’s U.S. Steel Trust. Ironically, Morgan had developed the idea of forming U.S. Steel while listening to a December 1900 speech by Charles Schwab, Carnegie’s chief assistant, who was describing the possibility of a vertically integrated super-trust that would own companies making everything from raw steel to finished steel tubes. Morgan was so impressed with the idea that he asked Schwab to meet at Morgan’s home on Madison Avenue, where he offered to buy Carnegie’s steel enterprise. Carnegie thought about the proposal overnight and gave Schwab a slip of paper with the price of his company written on it—$480 million. When Morgan saw the number, he immediately said, “I accept.” Morgan’s next step was to buy iron ore holdings owned by Rockefeller. Morgan hated Rockefeller, but he needed the iron ore badly, so he agreed to meet Rockefeller at the latter’s home on West 54th Street in New York. Rockefeller told Morgan that he was retired and would not discuss a business proposition at his home. Instead, Rockefeller told Morgan that he needed to discuss buying the iron ore with Rockefeller’s son, John D. Rockefeller, Jr. The two men met and finally agreed on a price of $88.5 million for the iron ore and the ships used to transport ore to the mills. After acquiring the iron ore and ships from Rockefeller, Morgan went on to consolidate large parts of the American steel industry into U.S. Steel and monopolize the business for a generation before the United States Department of Justice sued U.S. Steel Trust for monopolistic practices and unlawful restraint of trade and forced the trust to split into several independent companies.
the finished produce in Duke’s own retail tobacco stores. Duke quickly dropped less profitable cigarette brands and concentrated his advertising on a few popular and profitable ones. The American Tobacco Company dominated the United States tobacco market for years. American Tobacco became so powerful the United States Justice Department filed suit against it in 1907. By 1911, the Justice Department had won an antitrust judgment under the Sherman Act, convicting the American Tobacco Company of “unreasonable business practices,” including monopoly practices and restraint of trade. Even after being broken up, the American Tobacco Company still controlled a significant portion of the United States tobacco market because it was allowed to control successful brands such as Pall Mall cigarettes, which the company marketed aggressively. Over the next few decades, however, American Tobacco began to lose market share to R.J. Reynolds Tobacco Co., which heavily advertised Camel cigarettes and eventually controlled over a third of the market for cigarettes in the United States. The Sherman Antitrust Act did not toll the death knell for the cigarette giants, but later federal regulation did. Because of health concerns, the United States government restricted the advertising of cigarettes in America and issued strong health warnings that reduced the number of people smoking cigarettes in the latter part of the twentieth century, with the trend continuing into the twenty-first century.
De Beers Diamond Company5 De Beers was named after a huge diamond mine discovered on the De Beers farm in South Africa. Cecil Rhodes began his monopoly diamond trust by buying the diamond mining claim on De Beers’ farm, and his company eventually became De Beers Consolidated Mines, Ltd. By accumulating several mining claims in the area and convincing competing diamond mining companies to join De Beers’ marketing scheme, Rhodes
The American Tobacco Company4 James Duke began small-scale production and marketing of cigarettes in Durham, North Carolina. Advances in cigarette manufacturing technology allowed him to expand cigarette production and sales rapidly. Duke took advantage of the efficiency and volume of cigarettes he was able to produce with the new machines to integrate the tobacco industry from top to bottom and to expand his business by lowering prices and spending lavishly on advertising. However, intense competition with other cigarette companies cut into Duke’s profits, so he began searching for a better business model to make more money. New Jersey passed a statute allowing a holding company to own several related businesses, so Duke convinced his competitors to merge into a single entity called the American Tobacco Company, which ultimately controlled almost 90% of the United States market for cigarettes. Duke also vertically integrated his tobacco business, combining entities that specialized in buying tobacco leaves, manufacturing cigarettes, and selling July–August 2021
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was able to control the supply of diamonds offered for sale and expand the market for diamonds by aggressively focusing on distributing, advertising, and selling diamonds worldwide. Rhodes developed an efficient distribution and marketing system and convinced other diamond mining companies to market their production through his company—promising that De Beers would control the supply and, therefore, the price of diamonds, thereby guaranteeing cooperating companies a handsome profit if they joined his marketing venture. In 1914, De Beers sent Ernest Oppenheimer to South Africa to survey its mining claims. Oppenheimer reported that the diamonds were laying around on the surface and could be found easily and cheaply without digging deep into the earth. Oppenheimer saw an opportunity for himself and bought the German mining claims in South Africa during the early months of World War I. The Germans were willing to sell because they believed the British would confiscate their holdings in South Africa during the war. Once Oppenheimer controlled a significant share of the existing diamond mining claims in South Africa, he sent an ultimatum to De Beers, stating that if the company did not make him chairman of De Beers Consolidated Mines, Ltd., Oppenheimer would flood the market with diamonds and drive De Beers out of business. The company agreed, and he became chairman in 1929. To keep diamond prices high during the Great Depression, Oppenheimer limited the supply of diamonds offered to customers. When market demand became strong again after the Second World War, the company released more diamonds to the market. By 1990, the De Beers cartel controlled the marketing of approximately 90% of the world’s diamonds. However, market factors and antitrust litigation caused this well-known monopoly to lose its dominance of the diamond trade late in the twentieth century. Several different events broke De Beers’ hold on the diamond trade.
First, the Soviet Union dissolved, and Russian companies began selling diamonds outside the De Beers marketing and distribution system to make a quick profit. Next, the United States Justice Department filed an antitrust suit against De Beers. Then Rio Tinto, another mining company, broke with De Beers and began selling its diamonds through Argyle Diamonds, instead. Finally, a class action civil suit charging price fixing was filed in federal court against the De Beers corporation. De Beers settled the Sherman Antitrust case against it in the United States and a European Union antitrust case against it in Europe. The company also settled all civil class action suits against it for conspiring to fix the price of diamonds, sponsoring false and misleading advertising, and unlawfully monopolizing the diamond supply. De Beers paid approximately $300 million to the class action plaintiffs and their attorneys, and agreed to stop violating federal and state antitrust statutes. Because of these legal and market problems, De Beers’ share of the diamond trade dropped below 35% by 2018. Eventually, the De Beers mines became depleted and the company began manufacturing and selling man-made diamonds under the Lightbox label. The company began a new marketing strategy by focusing on its own brand of diamonds rather than trying to convince others to join the De Beers diamond marketing company. De Beers was no longer able to control the market for diamonds.
International Mercantile Marine Co.
The International Mercantile Marine Co. (“IMM”), a shipping combine, joined several companies into a single entity controlled by J. Pierpont Morgan. Morgan’s goal was to dominate transatlantic shipping, but he failed for two main reasons. The first cause of IMM’s failure was the serious harm it faced due to competition from the British Cunard Line. In its early years, IMM had prospered by moving immigrants from Europe to the United States. In 1902, the company had carried nearly 65,000 passengers across the Atlantic. Cunard Line, however, was subsidized by the British government and built two giant ocean liners— the Lusitania and the Mauretania, which cut into IMM’s profits. Competition from these two super-liners, which were placed into service in 1907, forced IMM to build three large ocean liners of its own—RMS (Royal Mail Ship) Olympic, RMS (Royal Mail Ship) Titanic, and HMHS (His Majesty’s Hospital Ship) Britannic. Resolving Cases The sinking of IMM’s ocean liner Titanic on April 15, 1912, on her first voyage across Delivering Results the North Atlantic, caused major financial losses and serious damage to the company’s reputation. Partly as a result of bad publicity and financial problems associated with the sinking of Titanic, IMM suffered cash flow Mediating all types of civil litigation cases from pre-lit to post verdict since 2007. problems and defaulted on interest payments in 1914. Board Certified in Civil Trial Law The loss of Titanic also brought new Texas Board of Legal Specialization regulatory scrutiny to IMM. The American AV Rated commission of inquiry looking into the Texas Super Lawyer: every year since 2009 causes of the shipwreck highlighted IMM’s monopolistic nature, and the company was attacked by members of the United States To schedule an in-person or virtual mediation, visit the calendar at Senate for its unfair business practices. The www.KatzmanAndKatzman.com/adr-mediation/ second cause of IMM’s failure was not due to or call antitrust laws, though, but rather was due to 210.979.7300 the fact that airplanes became the preferred way
It’s settled
Alex Katzman
16 San Antonio Lawyer® | sabar.org
to travel across the Atlantic because of their greater speed. In 1916, the cartel reorganized its finances and emerged as a stronger business, when the shipping business was revived for a time by demand for moving troops and supplies across the Atlantic Ocean to Europe during World War I.
and amount of collateral required to make a loan in the United States. In 1934, Congress had established the Securities Exchange Commission (SEC) to regulate stock market activities, prosecute stock market fraud, and monitor insider trading in securities.
The Match King6
The Sherman Antitrust Act
Ivar Kreuger was hailed as the savior of Europe after World War I because his company made loans to bankrupt countries at reasonable interest rates. Kreuger’s company had a better credit rating than many European governments, so he was able to offer bonds to cash-strapped countries at a lower interest rate than the governments of France or Germany, for example, could attract on the open market. Kreuger was able to make a profit by taking out low-interest loans based on his good credit and reselling these bonds to governments at a higher interest rate. Kreuger was born in 1880 in Sweden and emigrated to the United States when he was twenty years old. For several years he worked on construction projects around the world and learned everything about reinforced concrete construction. He returned to Sweden in 1907, formed a partnership with a young Swedish engineer named Toll, and went into the construction business. By 1923, Kreuger and Toll were successfully making matches and constructing commercial buildings. However, that was not enough for Kreuger—he wanted to dominate the financial world, so he shifted his interests from manufacturing and construction to market manipulation and financial engineering. Kreuger decided to concentrate his business in finance and began to manipulate the price of his stock by paying higher and higher dividends. Eventually, Kreuger overextended his financial empire and transformed his business into a giant Ponzi scheme that defrauded thousands of investors when it failed after the 1929 stock market crash and Great Depression. Kreuger bought other companies—including a telephone company (Ericsson) that still exists today—by manipulating the price of his company’s stock and by paying high dividends out of capital. Like all Ponzi schemes, this one was doomed to fail sooner or later because the cost of paying high dividends to stockholders out of capital guaranteed that the company would eventually go broke. Krueger’s empire began to show cracks in October 1929, after the New York Stock Market began to fall. He tried several desperate moves to restore confidence in his business, including a loan of $125 million to the German government that he could not afford and the forging of nearly £29 million in Italian government bonds. He added a large part of these fake Italian bonds to the balance sheet of Kreuger and Toll, in an effort to make his financial empire appear solvent. The ploy worked for a few months until the next set of dividend payments came due. In desperate need of cash, Kreuger had to sell Ericsson to raise money to pay the coming dividend and continue his Ponzi Scheme. International Telegraph & Telephone Company agreed to buy Ericsson, but when its auditors looked at Ericsson’s books in detail, they discovered a twenty-seven-million kroner asset that was nothing more than a claim by Ericsson on Kreuger’s other businesses—in other words, worthless paper with no specific assets as collateral. With his empire collapsing, Kreuger became more and more anxious, distracted, and despondent. His business empire eventually failed as the United States stock market collapsed, and the world economy fell into depression. Kreuger was tried, convicted of fraud, and sent to prison. No one is certain how much money disappeared in Kreuger’s Ponzi scheme—estimates range from $250 million to over $400 million, and his investors collected only pennies on each dollar they invested in his company. To avoid a repeat of Kreuger’s Ponzi Scheme, the United States Congress passed The Trust Indenture Act in 1939, to regulate the type
In 1890, Congress passed the Sherman Antitrust Act, to limit anticompetitive agreements and monopoly market activities among American businesses, like those just described. The United States Justice Department was authorized to investigate and sue any entity or group that limited competition. The Act was intended to keep businesses from artificially restricting the supply of goods coming to market so they could control the price they charged consumers. The Act was also intended to prevent agreements among businesses designed to limit competition and manipulate prices. The Act’s purpose was to maintain a competitive marketplace in the United States. The Act is divided into three parts: (1) section one prohibits specific types of anticompetitive acts; (2) section two deals with results that are anticompetitive; and (3) section three extends jurisdiction to enforce the Act to United States Territories and the District of Columbia. The United States Justice Department began applying the Sherman Antitrust Act to monopolistic business practices immediately after it was enacted. During the twentieth century, over half a dozen monopolies were broken up through Supreme Court decisions or out-of-court settlements. In 1902, the Chesapeake & Ohio Fuel Company trust was dissolved. In 1904, Northern Securities was disbanded. In 1906, the Standard Oil Trust was broken up. In 1911, the American Tobacco Co. was divided into four new tobacco companies. In 1911, General Electric Co., Philips, Sylvania, Tungsol, Consolidated Chicago Miniature, Corning, and Westinghouse were all forced to sign consent decrees that they
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had violated the Sherman Antitrust Act. By contrast, the Federal Baseball Club was found to have not violated the Sherman Act because the United States Supreme Court determined that baseball organizations did not engage in interstate commerce and, therefore, were not subject to the Sherman Antitrust Act. The Act continues to be a powerful tool in the federal government’s arsenal. In 1982, AT&T agreed to a breakup of its businesses through negotiations with the United States Justice Department. In 2001, Microsoft Corporation settled with the United States Justice Department without being required to break up, although Microsoft was required to modify its business practices to allow more competition in the computer industry. The Biden Administration’s first proposed budget includes a hefty increase for the Federal Trade Commission and the Department of Justice’s Antitrust Division, presumably to fund the actions recently filed against large technology companies. The purpose of the Sherman Antitrust Act is to prevent price manipulation by agreements among companies to restrict competition. A monopoly developed solely because a business is better than its competition is not affected by the Sherman Antitrust Act, which does not protect inefficient businesses from effective competition. Instead, the Act is designed to prevent illegal secret agreements among businesses to raise prices by limiting competition and restricting the supply of goods coming to market. In that way, that Act is designed to protect consumers by maintaining a competitive marketplace. Some economists and judges have criticized the Sherman Antitrust Act on various grounds. For example, Alan Greenspan claimed the Act stifles innovation and harms American consumers by causing capital to be allocated in non-optimal ways. Judges Robert Bork and Richard Posner, moreover, have proposed that, under the Sherman Antitrust Act, alleged monopolies should be evaluated for both economic efficiency and restraint of trade; and that inefficient cartels could be eliminated by market forces alone, thereby eliminating the need for antitrust legislation. Harry Munsinger recently concluded a long practice that focused on Collaborative Divorces, Estate Planning, and Probate matters. Harry holds a Ph.D. in psychology from the University of Oregon and a J.D. from Duke University School of Law, where he was a member of the Duke Law Journal. 18 San Antonio Lawyer® | sabar.org
Eric Goldschein, The Incredible Story of How De Beers Created and Lost the Most Powerful Monopoly Ever, Insider (Dec. 19, 2011 1:00 p.m.) https://www.businessinsider.com/history-of-de-beers-2011-12. 6 Archibald MacLeish, The Grand Scheme of the Swedish Match King, Fortune (Apr. 28, 2009) https://archive. fortune.com/2009/04/24/news/companies/swedish_match_king.fortune/index.htm. 5
ENDNOTES Matthew Josephson, The Robber Barons, 190-92 (1934). 2 Standard Oil, Britannica (Mar. 24, 2020), https:// www.britannica.com/topic/Standard-Oil. 3 United States Steel Corporation, Britannica (Sep. 5, 2019), https://www.britannica.com/topic/UnitedStates-Steel-Corporation. 4 Robert W. Carter, Jr., American Tobacco Company, Encyclopedia of North Carolina (William S. Powell, ed. 2006). 1
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bar business
Thirty-Five Years of the William S. Sessions American Inn of Court By Susan Cone Kilgore
W
hether in private negotiation or public discourse, in the legislative process or the exchanges among leaders, in the debate of parties, or the relatively simple matter of a trial in the courts, the necessity for civility is imperative. Without civility no private discussion, no public debate, no legislative process, no political campaign, no trial of any case, can serve its purpose or achieve its objective. When men shout and shriek or call names, we witness the end of rational thought process if not the beginning of blows and combat. I hardly dare take the risk of adding that this may also be relevant to the news media.1 With these words, United States Supreme Court Chief Justice Warren E. Burger decried the diminishing quality and declining civility of American lawyers’ work product. Several years later, in 1977, the Chief Justice observed the collegial approach of the English Inns of Court. He admired the way the Inns used apprenticeship to teach new lawyers the decorum, civility, and professional standards necessary for a properly functioning bar;2 and he challenged American lawyers to replicate the English Inns experience in the United States.
Creating the American Inns of Court In 1980, that group of lawyers founded the first American Inn of Court. They adopted the apprenticeship model, while modifying it to fit the American legal system. This group created the membership categories of Master of the Bench, Barrister, Associate, and Pupil. They also created the pupillage team concept of dividing the Inn’s membership into teams, with each team comprised of members from each category; and they created the mentoring concept that each team would work together to provide one educational program per year. By 1985, there were twelve Inns across the country. The Inn concept had taken root, and the American Inns of Court Foundation was organized to provide national support for the Inns and promote legal excellence, civility, professionalism, and ethics.
The 2019-20 kick-off program featured BG Malinda E. Dunn, USA (Ret.), the Executive Director of the American Inns of Court Foundation. She is pictured with some of that year’s Executive Board, Brant Mittler, Leslie Hyman, Malinda Dunn, Susan Cone Kilgore, and Dan Harkins.
Chartering the San Antonio American Inn of Court In 1986, William S. Sessions was the Chief Judge of the United States District Court for the Western District of Texas. That summer, Judge Sessions assembled an Organizing Committee to establish an Inn of Court in San Antonio. Terry Bickerton chaired the Organizing Committee, whose members included San Antonio lawyers Phil Hardberger3 and Randy Tower.4 On September 15, 1986, the San Antonio American Inn of Court was chartered as the twentieth American Inn of Court. Just as the Inn concept had taken root nationally, the San Antonio Inn took root quickly. Within three months, the first Inn meeting was held at the Plaza Club, and the Inn selected Judge Sessions to be its first president.5 The San Antonio Inn defined Masters of the Bench as attorneys licensed fifteen years or more; Barristers as those licensed between two and fifteen years; Associates as those licensed fewer than two full years; and Pupils as law students. The Inn followed the American Inns of Court practice of inviting members to join,
with the goal of keeping an appropriate ratio of more experienced lawyers to mentor those with less experience. Members created their programs side by side with some of the most experienced local judges and attorneys. When the San Antonio Inn was first formed, some of the more experienced early members were Fred Biery,6 John Cornyn,7 Gerry Goldstein,8 Andy Mireles,9 and Ed Prado,10 while some of the less-experienced attorneys included Dan Harkins11 and Julia Mann.12 The year after the San Antonio Inn was founded, Judge Sessions became Chief of the Federal Bureau of Investigation and moved to Washington, D.C. In honor of Judge Sessions, the Inn changed its name to the William S. Sessions American Inn of Court. In addition to the responsibility of proudly carrying Judge Sessions’ name, our Inn continues to uphold the goals he established: to encourage professionalism, ethics, and civility among the members of our bar.13
The San Antonio Inn in Practice ileta! Sumner recounts a story about Judge Sessions’ civility. In 1996, at the Inn’s end-ofJuly–August 2021
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year party, a dapper gentleman approached then-Associate Inn member ileta! and her husband Jay. As the gentlemen shook hands and conducted introductions, a misunderstanding turned into a pleasant joke among the new friends. That dapper gentleman was William S. Sessions, and ileta! asks, “How many people can say that they made the former Director of the FBI laugh upon introduction?” Every year, the entire Inn membership is divided into pupillage teams, with each team consisting of a few members from each membership category. Each pupillage team creates and presents one educational program for the Inn program year. The programs and their topics are limited only by the team’s creativity and the one-hour format. Some teams write and present shows. Some teams bring in guest speakers. Judge Rosie Speedlin Gonzalez’s favorite program involved the San Antonio Four—four women who were wrongfully convicted and later exonerated.14 The women provided concrete examples of attorneys breaching their ethical duties. As Judge Speedlin Gonzales observes, the women’s presentation “put a mirror up to the face of our profession and hopefully changed how we treat our clients.” This author’s favorite program addressed immigration status. Bexar County Sheriff’s deputies greeted each member upon check-in and requested the member’s bar card. Members who could produce a bar card received an American flag sticker on their nametags. Those who could not produce a bar card were labeled “undocumented.” From the moment members stepped off the elevator to attend the Inn meeting that night, we were immersed in something like the immigration experience. The Inn meeting usually includes a shared meal and the educational program, but it was not always so.15 From 2001-05, Renee Yanta served on the Sessions Inn Board, ultimately serving as President.16 She recalls that, early in her membership, Inn meetings were simply receptions. During her term on the Board, the Inn meetings changed to a half-hour social reception, followed by a full dinner to complement the educational program. Since March 2020, Inn meetings have been held on-line due to the COVID-19 pandemic.17 The first half hour remains social time, and the educational program follows during the dinner hour. H. Walker Bauer, a 2020-21 Pupil, commented that even though the meetings were on-line, he enjoyed the friendliness and social aspect of the Inn. It was 20 San Antonio Lawyer® | sabar.org
Each year, one pupillage team is designated as the Inn’s Outreach Group, responsible for creating at least one community program. The 2020-21 Outreach Group conducted several programs, including a December 2020 suitcase drive for The Children’s Shelter.
In October 2019, Pupillage Group 1 presented a program on the British Legal System, in part to promote the Sessions Inn’s October 2020 visit to a London Inn. That visit had to be rescheduled, but the Inn is considering an October 2021 visit. In this photo, from left to right, are Judge David Canales, Carlos Solis, Erica Maloney, “Archetype Texas Lawyer,” Paul Barkhurst, and Catrina Guerrero.
clear to him that members were happy to assist in any way they could. Mr. Bauer’s perception is keen, and ileta! Sumner recalls that a casual conversation with another Inn member led her to the adoption agency where she and her husband met their sons. Regardless of the meeting’s format, the Inn promotes cordiality and welcomes guests. The first thirty-five years of the Sessions Inn have introduced younger attorneys to their elders; provided programs where experienced attorneys have been awed by those with fewer years of practice; and done so with good humor and smarts. Fifty years after Chief Justice Burger wrote The Necessity for Civility, the American
Inns of Court and the William S. Sessions American Inn of Court remain dedicated to professionalism, ethics, civility, and excellence in the practice of law. If you would like to inquire about visiting a meeting, please go to https://inns.innsofcourt.org/inns/officers. aspx?innid=30020. Susan Cone Kilgore is an Attorney Advisor for the United States Department of the Army. From July 1, 2020, to June 30, 2021, she was the Immediate Past President of the William S. Sessions American Inn of Court.
ENDNOTES Honorable Warren E. Burger, The Necessity for Civility, 52 F.R.D. 211, 212 (1971). 2 The English Inns of Court began in 1292 when King Edward I directed his Chief Justice to satisfy a growing need for skilled advocates at the Royal Court at Westminster. The English Inns of Court emphasized the value of learning the craft of lawyering from those already established in the profession. Their collegial environment fostered common goals and nurtured professional ideals and ethics. https://americansall.org/ legacy-story-group/american-inns-courts (last visited June 5, 2021). 3 From 1970-93, Phil Hardberger was a partner at Hardberger & Rodriguez, Inc. In 1994, he became an Associate Justice on the Fourth Court of Appeals, and from 1997-2003, he served as that Court’s Chief Justice. In 2005, he was elected Mayor of San Antonio, and he served two two-year terms in that capacity. Phil Hardberger Park, named in his honor, opened in May 2010 and is a 311-acre park located on either side of Wurzbach Parkway between N.W. Military Highway and Blanco Road. 4 Randolph (Randy) Peter Tower practiced law at Clemens & Spencer from 1973 until he retired in 2011. Although primarily a trial attorney who practiced in both state and federal court, Randy also did appellate work. He was Board Certified in Labor & Employment Law. From 1975-1990, he was an Adjunct Professor at St. Mary’s University School of Law, and in his later years, he was highly sought after as a mediator and arbitrator. Randy died on November 19, 2013. 5 https://inns.innsofcourt.org/for-members/inns/ the-william-s-sessions-american-inn-of-court/ about/(last visited June 6, 2021). 6 In 1994, the Honorable Fred Biery was appointed to serve as United States District Court Judge for the Western District of Texas, a position he still holds with distinction today. From 2010-15, he served as Chief Judge of the Western District. Prior to his ascendency to the federal bench, Judge Biery was Judge of County Court at Law No. 2 in Bexar County (1979-82), Judge of the 150th District Court (1983-88) in San Antonio, and Associate Justice of the Fourth Court of Appeals (1989-94). 7 Since 2002, John Cornyn has served as one of the two United States Senators from Texas. Prior to his election to the Senate, he served as the 49th Attorney General of Texas (1999-2002), Associate Justice of the Supreme Court of Texas (1991-97), and Judge of the 37th Judicial District Court in San Antonio (1985-91). 8 Gerald “Gerry” Goldstein is a nationally known and highly respected criminal defense attorney, whose stellar career has spanned more than fifty years. He is a fellow in the American Board of Criminal Lawyers, the American College of Trial Lawyers, and the International Academy of Trial Lawyers. He has been an adjunct professor at both the University of Texas School of Law in Austin and the St. Mary’s University School of Law in San Antonio. In 2020, the State Bar of Texas 1
recognized him as an Outstanding 50 Year Lawyer. He is listed in The Best Lawyers in America and in Texas Lawyer’s Legal Legends. Gerry is Past President of both the National Association of Criminal Defense Lawyers and the Texas Criminal Defense Lawyers Association, and he is also a founder and course director of the NACDL White Collar Crime Seminar. 9 The Honorable Andy Mireles was Judge of the 73rd Judicial District Court in San Antonio for more than twenty years. Widely respected for his high ethical standards, Mireles created Bexar County’s juvenile justice system and was a driving force behind the development of Bexar County’s child abuse and neglect court. Judge Mireles died in December 2009. In 2011, Northside Independent School District opened the Judge Andy Mireles Elementary School. 10 From 2018-21, Edward C. Prado served as United States Ambassador to Argentina. Before his appointment to that position, he served for fifteen years as Judge of the United States Court of Appeals for the Fifth Circuit (2003-18), for nearly twenty years as United States District Court Judge for the Western District of Texas (1984-2003), and for about three years as United States Attorney for the Western District of Texas (1981-84).
Dan Harkins was the President-Elect of the Sessions Inn until July 1, 2021, when he became President of the Inn. 12 Julia Mann was invited to join the Inn as a Pupil and has been a member as an Associate, Barrister, Master of the Bench. She served the Sessions Inn as President in 2019-20. 13 https://inns.innsofcourt.org/for-members/inns/ the-william-s-sessions-american-inn-of-court/ about/(last visited June 6, 2021). 14 The Honorable Rosie Speedlin Gonzalez is Judge of County Court at Law No. 13 in Bexar County, Texas. She was elected to the bench on November 6, 2018. 15 Recent health guidelines have restricted gathering and meal sharing, but the Sessions Inn plans to return to in-person meetings as soon as possible. 16 The Honorable Renee Yanta was appointed Judge of the 73rd Judicial District Court in San Antonio, following the death of Judge Andy Mireles, and she was elected to that bench in 2010. In 2014, she was elected judge of the 150th Judicial District Court, where she served until 2018. 17 On July 1, 2021, Brant Mittler, M.D., J.D. became the Immediate Past President of the Sessions Inn, following his one-year tenure as President. 11
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Cue the Confetti: St. Mary’s Law School Women Are Leading Where Decisions Are Being Made By Sara Dysart Women belong in all places where decisions are being made. . . . It shouldn’t be that women are the exception. THE HONORABLE RUTH BADER GINSBURG
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n 2020 and 2021, much has been written about the historic and ground-breaking achievements of women attaining positions of power at the national level. The trend is also reflected in state and local government, as well as in the private sector. Getting very close to home, in 2021, the women of St. Mary’s University School of Law have obliterated the glass ceiling. Fewer than 100 years after the school was founded, a woman sits in every leadership position.
A Brief History of St. Mary’s University School of Law The San Antonio Bar Association established the San Antonio School of Law in October 1927. On October 1, 1934, the Board of Governors of the San Antonio School of Law transferred control of the law school to St. Mary’s University. The newly created St. Mary’s University School of Law was housed at St. Mary’s University’s original downtown campus at 112 College Street. The American Bar Association accredited St. Mary’s University School of Law in February 1948, and the Association of American Law Schools accepted St. Mary’s University School of Law as a member in December 1949. On December 1, 1967, the law school was moved to St. Mary’s University’s campus on the west side of San Antonio, where faculty and students occupied the newly constructed Law Center, consisting of a lecture hall, law library, and faculty building. In 1984, the law library was converted to a faculty building and replaced by the Sarita Kenedy East Law Library. The original faculty building became the administrative building. In 2006, the lecture hall, now known as the law classroom building, underwent a $1 million renovation, to include a “courtroom” with technology tools commensurate with the Bexar County Courthouse. The courtroom seats 300 people and can be used in varying configurations to accommodate trial and appellate proceedings. Many moot court competitions have been held in the law classroom building, and at times, Justices of the Supreme Court of Texas, Justices of the Fourth Court of Appeals, or Judges of the United States Court of Appeals for the Fifth Circuit have presided over those competitions. Over the years and throughout these changes, the heart of St. Mary’s University School of Law has been the people who work and study there. For more than eighty-five years, the women of St. Mary’s University School of Law made profound contributions to the law school and to the legal community. 22 San Antonio Lawyer® | sabar.org
[Back Row] Dean Patricia Robert, President of the Board of Visitors Sara Dysart, President of the Law Alumni Association Hon. Ana Lisa Garza, President of the Hispanic Law Alumni Association Hon. Angélica Jiménez-Espinoza, Law Chaplain Sister Grace M. Walle. [Front Row] Editor in Chief of St. Mary’s Law Journal Melissa Fulmer, Editor in Chief of The Scholar Candace Castillo, President of the Student Bar Association Crystal Andrade, Chair of the Board of Advocates Elizabeth Duggan.
Eighty-Five Years of Women Graduating and Leading The first woman law graduate was Mary Agnes Aird (J.D. ’36). From 1936 through 2020, 4,125 women have graduated from the law school. After Mary Aird forged the way, she was followed by steady incremental growth, and things got interesting in the late ’70s and early ’80s, when the number of women graduates shot up exponentially. From 1936 through 1945, there were 2 women law graduates; from 1946 through 1955, there were 8 women law graduates; from 1956 through 1965, there were 13 women law graduates; from 1966 through 1975, there were 77 women law graduates; from 1976 through 1985, there were 520 women law graduates; from 1986 through 1995, there were 871 women law graduates; from 1996 through 2005, there were 1,085 women law graduates; from 2006 through 2015, there were 1,041 women law
Over the years and throughout these changes, the heart of St. Mary’s University School of Law has been the people who work and study there. For more than eighty-five years, the women of St. Mary’s University School of Law made profound contributions to the law school and to the legal community. graduates; and from 2016 through 2020, there were 508 women law graduates. Thus, while there were only 100 women law graduates during the law school’s first forty years, there were 4,025 women law graduates during the law school’s next forty-five years! St. Mary’s University School of Law women graduates have made many and varied contributions to our community and bar. Hattie Elam Briscoe, a 1956 graduate, was the first African American woman to graduate from St. Mary’s University School of Law, graduating first in her law school class. Briscoe was not only the first black woman to practice law in Bexar County, but she was also the only black woman attorney in Bexar County for twenty-seven years. She zealously represented her clients until her death in 2002. Chief Justice Alma L. Lopez, a 1968 graduate, was the first Hispanic woman to serve on the Fourth Court of Appeals, and the first Hispanic woman to be elected chief justice of an appellate court in the United States. Sue Hall, a 1975 graduate, was the first woman president of the San Antonio Bar Association, serving from 1990-91. M. Colleen McHugh, a 1981 graduate, was the second woman president of the State Bar of Texas, serving from 1996-97. These women may have been the first women to ascend to those roles, but they were not the last. Five of the current seven justices on the all-female Fourth Court of Appeals are St. Mary’s University law graduates. In Bexar County, twelve of the current District Court judges, seven of the current County Court at Law judges, and one of the two Bexar County probate judges are St. Mary’s University women law graduates. The three immediate past Chief Justices of the Fourth Court of Appeals are St. Mary’s University School of Law women graduates: former Chief Justice Alma L. Lopez, former Chief Justice Catherine M. Stone, and former Chief Justice Sandee Bryan Marion. This spring semester, the law school celebrated Women’s History Month by bestowing the following Women Leadership Awards—each named after one of the former Fourth Court Chief Justices—on three awardees from a remarkable group of forty-one women student nominees: The Alma L. Lopez “Women in Law” Award to Blanca Ybarra (J.D. Class of ’21); The Catherine M. Stone “Rock of Justice” Award to Rosa Peterson (J.D. Class of ’21); and The Sandee Bryan Marion “Excellence in Mentoring” Award to Natalie Decesare (J.D. Class of ’21).
Today, a Second Woman at the Helm Turning to today’s leadership of St. Mary’s University School of Law, at the helm is Dean Patricia Roberts, the second woman dean. The first was Dean Barbara Bader Aldave, who served as dean from 1989 through 1998. Dean Roberts’ tenure commenced on June 1, 2020, in the middle of a pandemic. When she accepted this leadership role at the beginning of March 2020, she had no idea that, within two weeks, the
Dean Patricia Roberts
Patricia Roberts, Dean of St. Mary’s University School of Law, went to law school to prevent injustice and to serve others. Her father, who always wanted to be an attorney, encouraged her to go to law school. Her father eventually got his chance, too, going to law school at the age of fifty. The most important lesson Patty learned in law school was that there is a tremendous difference between arguing and advocating, and that effective and professional leaders do the latter, and remain respectful to one another. A leader’s job is to ensure that the members of her team have what they need to succeed professionally and personally, to make the difficult decisions, and to support her team when they encounter difficult situations. A leader serves others, not the other way around. Qualities specific to women leaders include an inclination to collaborate and resolve disputes. Women bring compassion and empathy to their work, which fosters team development and client loyalty. Women leaders know that the little things become the big things and use their time accordingly. Increasingly, Patty thinks women law students are treated similarly to men, particularly with their growing number and percentage of law school student enrollment. Since 2018, women have made up the majority of entering students at St. Mary’s University School of Law. Women attorneys are still facing some disparate treatment, however, and they are underrepresented in the partner ranks in Big Law firms, on corporate boards, and in the federal judiciary. Women are also more likely to be primary caregivers and end up leaving their professional track without an encouraging and supportive way back onto that track. Women bring enough emotion to the practice of law to help persuade, support, and understand, while using their legal analysis skills from law school to tell the client’s story in a way that is compelling, ethical, and professional.
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Former Hidalgo County District Judge Ana Lisa Garza Former Hidalgo County District Judge Ana Lisa Garza has quite a few stories to tell regarding women taking on leadership roles and placing service to others above all. She recalls the time when a defendant failed to appear at his hearing, and she was getting ready to hold him in contempt. Before doing so, she noticed that he had several lacerations and contusions on his face. When she asked about the injuries to his face, he responded that he was an epileptic who had suffered a seizure and fallen because he could no longer afford his medication. Knowing that a particular female physician was active in helping those in her community, Judge Garza took a recess and called the doctor, who—as expected—offered her services free of charge and helped provide the young man with enough epilepsy medication to last him several months.
In her capacity as General Counsel for Wyatt Ranches of Texas, LLC, former Judge Garza also recalls the efforts of Hidalgo County women to create a local shelter for battered women. After seeing the need for such a shelter, several of the local female district judges, female prosecutors, and female attorneys got together to donate valuable and cherished items to the forming woman’s shelter. At the time, there were very few established organizations that helped abused women and children; and, unfortunately, people often heard about abuse cases too late. Former Judge Garza personally observed these professional women—who had full-time jobs and families of their own, and who worked long hours—volunteer for this special project. Knowing that they made, and that they continue to make, a difference in the lives of abused women and children has continued to inspire them to keep on giving back to their community.
entire nation would be “shut in place,” and that she and her husband would relocate from Virginia wearing masks and not able to meet others except by Zoom. In spite of the many challenges, Dean Roberts successfully completed her first year as dean and, as of May 22, 2021, will have presided over four socially-distanced commencement exercises for 206 law graduates, 96 of whom are women. In his Gold and Blue magazine article featuring her, Justice for All, Frank Garza captured Dean Roberts’ natural inclination to take on leadership roles and expect other women to lead also:
Ana Lisa Garza (J.D. Class of ’87), President of the Law Alumni Association; Artessia “Tess” House (J.D. Class of ’14), President of the Black Association of Law Alumni; Hon. Angélica Jiménez-Espinoza (J.D. Class of ’10), President of the Hispanic Law Alumni Association; and Jenna Malsbary (J.D. Class of ’12), Chair of the GOLD (Graduates of the Last Decade) Council. Female law students serve in the following capacities: Crystal Andrade (J.D. Class of ’21), President of the Student Bar Association; Candace Castillo (J.D. Class of ’21), Editor in Chief of The Scholar; Elizabeth Duggan (J.D. Class of ’21), Chair of the Board of Advocates; and Melissa Fulmer (J.D. Class of ’21), Editor in Chief of St. Mary’s Law Journal.
Though she doesn’t reflect on it often, Roberts recognizes how fortunate she is to be in a leadership position in a field long dominated by men. She sees opportunities for female leaders opening up more and more. “For every woman who does the job well, she’s paved the way for the next generation,” Roberts said. While not intended, it is emblematic that eleven leadership positions at the law school during Dean Robert’s first year as dean are held by women. On campus, Sister Grace M. Walle serves as Law Chaplain. Law graduates serve in the following capacities: Sara Dysart, President of the Board of Visitors for the Law School (J.D. Class of ’81); Hon.
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The Next Generation of Women Leaders The legal profession is in good hands as not only the number of women law graduates increases, but also as more women take on leadership roles. The newly graduated women leaders exemplify the aspirations and leadership skills that young lawyers are prepared to employ to improve our community. Crystal Andrade (J.D. Class of ’21), President of the Student Bar Association, came to law school because she is passionate about public service and advocacy. As a proud Latina, she understands the importance of having greater representation by women like her in the legal community. As a first-generation college and law student, Crystal was not aware of how challenging her career path would be. Her parents not only encouraged her to go to law school, but they also instilled in her the confidence that she would succeed. The #1 lesson Crystal learned in law school was that great advocates put their faith in themselves and others. Crystal believes that the three qualities a great leader should embody are accountability, compassion, and integrity. While, historically, women attorneys have been excluded from leadership roles, she experienced overwhelming support in law school by the newer generation
The diversity of the women leaders at and from St. Mary’s University School of Law demonstrates the many ways that women can be effective leaders and advocates in the legal community and for the community at large. of lawyers. Her classmates were always supportive and encouraging of women serving higher positions in the legal community. Candace Castillo (J.D. Class of ’21), Editor in Chief of The Scholar, has been fascinated by the law since she was a teenager. Candace wanted to become an attorney to rectify systemic injustices by serving as a resource to her community. At that time, law school was just an idealistic dream, and after experiencing personal loss, there were moments when she was not sure she would be able to attend law school. Over time, though, she came to realize that big dreams happen one day at a time, and that all you have to do is get started. Candace’s mother was always her greatest supporter and often put her personal needs aside to help Candace. Her mother is Candace’s model for confidence, determination, and love. In law school, Candace learned to view problems with perspective and to always act with compassion. Candace believes that leadership is service to others and a cause that is greater than yourself. Leadership means making the best decisions you can to help your group in the long term. Good leadership requires showing vulnerability and a willingness to learn from mistakes. It is important to have visible and diverse leaders so that all members of our society can come to recognize how inaccurate it is to limit or categorize a person’s abilities based upon gender or other characteristics. A person can possess great strength but also be compassionate; a person may speak softly but also with power and intelligence; a person can be a devoted parent and be ready to take a stand in court. Having more women and more diversity in the practice of law will make the law profession better because it will be a truer representation of our society. This will encourage law practices and a justice system that are more responsive to the needs of all members of our society. Elizabeth Duggan (J.D. Class of ’21), Chair of the Board of Advocates, came to law school to add to her tool kit for serving others. Elizabeth was surrounded by attorneys growing up. Her dad was a prosecutor and is now a district judge. Her grandfather was an incredible defense attorney. She dreamed of helping people and making a difference in the same way they did. Her father and grandfather worked extremely hard and always did the right thing. The most important lesson Elizabeth learned in law school was to rely on the team. When you work together, such great things are possible. She is grateful for the opportunity to observe women leaders and their unique approach to leadership. For example, she saw that women leaders listen to understand instead of to respond, leading them to be more empathetic and compassionate to those around them, and making others feel important and valued. Elizabeth is aware, however, that women have to work harder to earn the respect of their colleagues and often have to go the extra mile to prove they are strong and capable. Nevertheless, Elizabeth is proud to take on that challenge as a woman leader and future woman attorney. Melissa Fulmer (J.D. Class of ’21), Editor in Chief of St. Mary’s Law Journal, wanted to work in a helping profession, but she realized that her talents were not suited for social work. She wanted to be an advocate. She had always loved writing and knew that writing was a huge part
Sister Grace M. Walle, Law Chaplain Sister Grace M. Walle, Law Chaplain, has experienced firsthand “leadership for service” as a characteristic of St. Mary’s University School of Law alumni. Her first memory of hosting the Fourth Court of Appeals involves an encounter with then Chief Justice Catherine Stone. As Sister Grace was setting up for the event, Chief Justice Stone asked, “What can I do to help?” Sister Grace witnesses “leadership as a service” often with law students in leadership roles. Women law students are concerned about their colleagues and work together to host events and respond to community needs. In the middle of the pandemic, law students took the time to recognize and nominate forty-one women law students as leaders in the law for the annual event celebrating Women’s History Month.
of an attorney’s job. It seemed right up her alley. Melissa learned to seek feedback and form relationships with professors, supervisors, and mentors. She learned to rely on others for guidance—there is no shame in seeking help to achieve your goals.
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Melissa believes leadership is demonstrating by example and investing in the improvement of those you lead. Women leaders seem to have a confident, yet calm, resolve. They are approachable, yet everyone knows they take their jobs seriously. St. Mary’s and places Melissa has worked have been encouraging environments for her as a female student, but she has experienced some less-than-positive treatment in other areas. Melissa thinks some individuals retain certain misconceptions about female attorneys and law students, but she enjoys proving them wrong. The diversity of the women leaders at and from St. Mary’s University School of Law demonstrates the many ways that women can be effective leaders and advocates in the legal community and for the community at large. St. Mary’s female law graduates have blazed a trail in our legal community and the sky is the limit for the women leaders of the future. Sara Dysart is a solo practitioner who is Board Certified in Commercial Real Estate Law.
Sara Dysart, President of the St. Mary’s University School of Law Board of Visitors Sara Dysart, President of the St. Mary’s University School of Law Board of Visitors, believes that women bring empathy and compassion to the practice of law and their leadership roles. A favorite example is the behavior that she has witnessed by men and women golfers. Often, men will step onto the course and immediately start placing bets on their ability to outperform the other golfers. Women, on the other hand, rarely consider betting and respond to the other golfers’ swings with supportive and encouraging remarks: “Great shot!” “The best shot all day!” Women bring this empathetic and supportive nature to their client representation and advocacy, and as they serve the bar and community in leadership roles.
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Fourth Court Update
Invocation of Counsel: A Continuing Evolution By Justice Liza A. Rodriguez
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hen has an accused articulated his desire for assistance of counsel sufficiently clearly that a reasonable police officer would understand the statement to be a request for an attorney? The Fourth Court recently weighed in on this issue, concluding that, under the circumstances presented, the request “Can I call my lawyer, sir?” was an unambiguous invocation of the right to counsel. State v. Soto, No. 04-19-00427-CR, 2020 WL 6293451, at *5 (Tex. App.—San Antonio Oct. 27, 2020, pet. ref ’d) (mem. op.). In Soto, San Antonio Police responded to a report by an apartment manager that packages smelling of marijuana had been delivered to the office. Id. at *1. A resident of the complex, Soto retrieved the packages, and an SAPD Detective stopped Soto outside his apartment. Id. The body-cam video showed the Detective opening one of the packages, discovering that it contained marijuana, placing Soto in handcuffs, and informing him that he was under arrest. Id. During the ensuing search of Soto’s person incident to his arrest, the following exchange occurred: Soto: Can I call my lawyer, sir? Detective: Well—you can do that— if I take you to jail. You will be given a phone call at that time. That’s just how the procedure works so—We don’t stop and give you a phone and say, “Call him right now.” That’s not how it goes. But, yes, you get a call. Id. Soto ultimately made incriminating statements, and the officers relied on those statements to obtain a warrant to search Soto’s apartment, where they seized drugs, guns, and cash. Id. at *2. Soto filed a pretrial motion to suppress his statements and the evidence seized from his home. Id. The trial court granted the motion, concluding that Soto’s statement, “Can I call my lawyer, sir?” was a
clear invocation of his right to have a lawyer present during a custodial interrogation. Id. The State appealed. Id. The right to counsel during custodial interrogation was created as a procedural safeguard to “ensure that the right against compulsory self-incrimination was protected.” Michigan v. Tucker, 417 U.S. 433, 444 (1974). An accused’s mere mention of the word “attorney” or “lawyer” does not automatically invoke the right to have counsel present during questioning; rather, an accused’s request for counsel must be unequivocal and unambiguous. Davis v. United States, 512 U.S. 452, 461-62 (1994). Courts determine whether a suspect’s statement referring to a lawyer constitutes an actual invocation of the right to counsel by considering the statement itself and the totality of the circumstances surrounding the statement. State v. Gobert, 275 S.W.3d 888, 892 (Tex. Crim. App. 2009). Here, the trial court assessed Soto’s demeanor and tone of voice on the bodycam video within the context of the surrounding circumstances. Soto, 2020 WL 6293451, at *3. The trial court concluded that, under the applicable law, Soto’s request was a clear invocation of his right to counsel. Id. The State disagreed and argued that the officer reasonably interpreted Soto’s question to ask whether an opportunity to call a lawyer existed, not to invoke that right at the time. Id. We ultimately agreed with the trial court and concluded that Soto did not equivocate in his desire to call his lawyer and that he was not vague about whom he wished to call. Id. at *5. As a result, the Detective’s questioning should have ceased at that moment, and any evidence obtained after Soto’s invocation was inadmissible. Id. Invocation of counsel is a constitutional right that requires a close, fact-specific review within the totality of the circumstances leading up to such a request. Although the
Invocation of counsel is a constitutional right that requires a close, fact-specific review within the totality of the circumstances leading up to such a request. Although the Texas Court of Criminal Appeals refused the State’s petition for discretionary review in Soto, invocation of the right to counsel remains an interesting and often litigated issue.
Texas Court of Criminal Appeals refused the State’s petition for discretionary review in Soto, invocation of the right to counsel remains an interesting and often litigated issue. Justice Liza A. Rodriguez was elected to serve on the Fourth Court of Appeals, effective January 1, 2019. Justice Rodriguez has been licensed since 1997 and is a graduate of St. Mary’s University, a former Bexar County Assistant District Attorney, and a Criminal Defense and Family Law Practitioner. Prior to becoming a Justice on the Fourth Court of Appeals, she served as Presiding Judge of County Court at Law #8 and of Bexar County’s first DWI Court.
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Federal Court Update
Western District of Texas Court Summaries By Soledad Valenciano & Melanie Fry
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.
FLSA; Class Certification Hernandez v. Pritchard Indus. (Southwest), LLC, No. SA-20-CV-00508-XR (Rodriguez, J., Mar. 25, 2021). The court granted the plaintiffs’ motion to certify a class alleging operator of an office janitorial service failed to pay overtime under the FLSA. Court applied Swales v. KLLM Transp. Servs., 985 F.3d 430 (5th Cir. 2021), the recent Fifth Circuit decision that altered much of the pre-trial landscape for FLSA class actions and abrogated the approach used in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D. N.J. 1987), for determining whether to certify a collective action. The court rejected the defendants’ argument that an individualized inquiry was needed to determine: (1) whether a janitor worked more than forty hours per week; (2) whether a payroll code was properly applied to each employee’s wages; and (3) whether a payroll code error resulted in the janitor’s receiving more overtime pay than he or she was entitled to. The court held that the fact that the employer will have to review its records to determine whether each janitor was properly paid in order to identify class members did not alter the fact that the janitors were “similarly situated.”
Bankruptcy; Statutory Construction Gabriel Inv. Grp., Inc. v. Tex. Alcoholic Bev. Comm’n (In re Gabriel Inv. Grp., Inc.), No. SA-20-CV-1244-XR (Rodriguez, J., Apr. 15, 2021). This is a bankruptcy appeal involving the construction of section 22.16 of the Texas 28 San Antonio Lawyer® | sabar.org
Alcoholic Beverage Code, which prohibits public corporations from owning package store permits required to operate retail liquor stores. The appellant held package store permits pursuant to a grandfather provision in the statute. The appellant filed a chapter 11 bankruptcy case and filed an adversary proceeding seeking a declaratory judgment that its grandfather exemption would survive regardless of whether its stock was purchased by a separate public corporation. The court affirmed the bankruptcy court’s holding that the appellant’s right to hold package store permits would not survive such a sale.
ERISA; Causes of Action Blackmon v. Zachry Holdings, Inc., No. 5:20-CV-988-DAE (Ezra, J., Apr. 22, 2021). The plaintiffs brought a class action against their former employer, alleging breach of fiduciary duties under ERISA based on the defendants’ alleged mismanagement of one of the largest existing 401k plans. The plaintiffs complained that defendants chose to offer an investment suite that was too high-risk and paid excessive plan fees to Fidelity. The defendants moved to dismiss, arguing that the plaintiffs made an inappropriate comparison of actively managed versus passively managed funds. The court identified Eighth and Ninth Circuit cases dismissing fiduciary duty claims on those grounds, and Fourth, Sixth, Tenth, and Eleventh Circuit cases refusing to dismiss on those grounds. Noting “the lack of Fifth Circuit guidance on this issue,” the court declined to dismiss the fiduciary duty claims. The defendants also argued that the Fifth Circuit has yet to recognize an ERISA theory of liability for failing to monitor fiduciaries, and such a claim is
not an independent ground for relief. Although the Fifth Circuit has not formally recognized such a claim, the court noted that district courts in the Fifth Circuit have recognized a failure to monitor theory of liability. So, “without any clear guidance,” the court declined to dismiss the claim on that basis.
Diversity Jurisdiction; Insurance Southbound, Inc. v. Firemen’s Ins. Co., No. SA-21-CV-78-XR (Rodriguez, J., Mar. 10, 2021). The plaintiff sued its out-of-state insurance company and the in-state assigned adjuster for claims related to alleged underpayment of hail damage. Post-suit, the insurance company sent the plaintiff a letter purporting to accept all of the adjuster’s liability that may arise from the plaintiff’s claim under Tex. Ins. Code 542A.006, and two days later removed the case to federal court based on diversity jurisdiction. The court recognized a split among the district courts regarding section 542A.006’s effect on removal and diversity jurisdiction. The court agreed with cases finding that insurer’s postsuit election to accept agent’s liability under section 542A.006 makes recovery against the agent impossible and results in finding of improper joinder, meaning the agent’s citizenship may be disregarded. The court dismissed all claims against the adjuster and denied the motion to remand.
Good Cause; Service Payne v. City of San Antonio, No. SA-CA407-FB (Biery, J., March 30, 2021). The court denied one defendant’s Rule 12(c) motion for judgment on the pleadings. The
plaintiffs had failed to respond to the motion but contended they never received service of the motion. The defendant’s counsel stated the motion was mailed and emailed but could not “100% confirm” that the law firm served the motion via certified mail and via email. The court stated that, in the Fifth Circuit, there is no general presumption of delivery for certified mail when the return receipt is not received by the sender, and the court was not inclined to impose such a presumption in this instance where the defendant’s counsel could not find the return receipt card (or the email confirmation). The court also granted the defendant’s motion for leave to file an out-of-time response to the plaintiffs’ objections to a magistrate judge’s report and recommendation. The defendant explained that the February 2021 winter storm shut down his counsel’s office and office support for the entire week and was followed by consistent trial preparation demands for counsel in another matter set for virtual trial starting the week of March 1. The court concluded that this was good cause for the late filing.
Removal and Remand; PREP Act Perez v. Southeast SNF LLC, et. al, No. SA21-CV-00088-JKP (Pulliam, J., April 12, 2021). The plaintiffs sued several Texas-based nursing homes in state court, alleging the nursing homes were responsible for the COVID-19related deaths of their loved ones. The nursing homes removed to federal court based on federal-question jurisdiction, contending that the plaintiffs’ claims were completely preempted under the Federal Public Readiness and Emergency Preparedness Act (“PREP Act”). The court had recently concluded the PREP Act does not completely preempt state law claims. Moreover, the PREP Act does not create a federal cause of action but provides immunity to covered persons for injuries caused by, arising out of, relating to, or resulting from the administration of a covered countermeasure to or by an individual. Removal was not proper under the embeddedfederal-question doctrine articulated in Grable, which requires that a state law claim must “necessarily raise a stated federal issue, actually disputed and substantial,” which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities. PREP Act cases do not meet these elements
Soledad Valenciano practices commercial and real estate litigation with Spivey Valenciano, PLLC.
because PREP Act immunity is a defense that must be pled in an answer or asserted in a motion to dismiss, and therefore it is not necessarily raised as a claim or element in the plaintiffs’ negligence cases. Moreover, state courts can rule on PREP Act defenses. Removal was not proper under the federal officer removal statute, either. The nursing homes were not acting as an extension of the federal government in its efforts to combat COVID-19, and they did not have a “special relationship” with the federal government. The court was without jurisdiction to apply sanctions for alleged pre-removal actions by the defendants, and it could not find that the defendants lacked an objectively reasonable basis for seeking removal.
Melanie Fry practices commercial litigation and appellate law with Dykema Gossett PLLC.
Arbitration Carnegie Techs., LLC v. Triller, Inc., SA20-CV-00271-FB (Chestney, E., March 5, 2021). Plaintiff Carnegie provided administrative services to Triller. Prior to Triller’s being purchased by another entity, Triller executed an Amended Services Agreement and a Promissory Note with Carnegie. Carnegie continued to perform under the Amended Services Agreement. When Triller did not pay Carnegie’s invoices, Carnegie accelerated the Promissory Note and sued. After Triller’s unsuccessful attempt to obtain dismissal based on novation, Carnegie moved for summary judgment. In response, Triller filed a motion to compel arbitration, arguing that the parties executed multiple written agreements in connection with the Triller sale, and that those agreements contain arbitration provisions. Neither Triller nor Carnegie signed the other agreements, and neither the Amended Services Agreement nor the Note contain an arbitration agreement. The court considered Texas law, California law, and federal law, all of which use a similar inquiry that ultimately centers on the intent and mutual assent of the parties to the agreement in question. Here, Triller failed to establish that Triller and Carnegie intended and agreed to arbitrate these breach of contract claims. Rather, the Amended Services Agreement reflected an unequivocal agreement between the parties that any disputes arising out of the contract be resolved in a judicial forum, specifically in the state or federal courts of Texas.
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