Western District of Texas Court Summaries

Federal Court Update

By Soledad Valenciano, Melanie Fry, and Jeffrie Lewis

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.

Motion to Dismiss Title IX Case; Leave to Amend

S.P. v. Northeast Indep. Sch. Dist., No. SA-21- CV-0388-JKP (Pulliam, J., July 30, 2021). The court granted a school district’s motion to dismiss the plaintiff’s claims for discrimination under Title IX of the Education Amendments of 1972 and for violation of substantive due process under 42 USC § 1983. The plaintiff alleged that, beginning in the eighth grade, she was meticulously groomed and sexually assaulted by her teacher. The plaintiff alleged that the school’s assistant director had observed the teacher alone with the plaintiff, once behind closed doors, and that another time another teacher had observed the plaintiff and the teacher alone in a classroom for an extended time. While the plaintiff pled that the school district had actual notice of the sexual harassment, grooming, and abuse of the plaintiff by the teacher, the plaintiff provided no factual allegations to support a finding that the school board or principal had actual notice. While the plaintiff’s pleadings supported a finding that the school district had knowledge of behavior consistent with grooming, the plaintiff provided no basis to equate grooming with sexual harassment. The court analyzed whether actual knowledge of grooming behavior created a reasonable inference that the director had actual knowledge of the sexual harassment or of a substantial risk of sexual abuse. The court determined that the plaintiff’s allegations were insufficient to even plausibly claim that the school district should have known, much less actually knew, of the harassment. The plaintiff’s request for leave to amend her complaint was denied. Noting she could have amended her complaint as a matter of course under FRCP 15(a)(1) but failed to do so, the court reviewed the request under the discretionary standard of FRCP 15(a)(2). Because the plaintiff’s intended amendments would not cure deficiencies related to actual knowledge of harassment or of a substantial risk of abuse, the court denied the request for leave. The plaintiff abandoned her due process claim by failing to address it in her response to the motion to dismiss.

Depositions; COVID-19

Cantu v. Mammoth Energy Servs., SA-19-CV- 00615-DAE (Chestney, E., Aug. 27, 2021). The court granted, in part, the defendants’ motion to compel in-person depositions in a collective action brought under the Fair Labor Standards Act. The parties agreed to conduct representative discovery with 22 out of the 156 plaintiffs. Only some of the 22 plaintiffs lived in the San Antonio area. The defendants originally wanted all 22 depositions to occur in-person in San Antonio, but then offered to travel to the major city closest to where a plaintiff resided while implementing COVID-19 protocols. The plaintiffs wanted all depositions to occur via telephone or videoconference, allowing each plaintiff to remain where they reside. The court ordered staggered depositions, citing to FRCP 26(c) (1)(B), which allows the court wide discretion to determine the method of discovery, such as the designation of the time and place of a deposition, so as “to protect a party or person from annoyance, embarrassment, oppression or undue burden or expense.” The first round of depositions would include in-person depositions of the San Antonio-area plaintiffs, implementing COVID-19 safety protocols. The second round would include in-person depositions in a centralized city close to the next largest number of representative plaintiffs, consolidated to minimize travel and expense to the parties, and implementing COVID-19 safety protocols. Alternatively, the defendants could notice the second round of depositions via Zoom.

Work-Product Privilege

Moya v. Allstate Fire & Cas. Ins. Co., SA- 21-CV-00009-FB (Biery, F., July 19, 2021). The court denied the plaintiff’s motion to compel documents reflecting review and evaluation of the plaintiff’s medical bills in an underinsured motorist case. The defendant argued such documents were protected under the work-product privilege. The Fifth Circuit’s rule on work-product privilege did not apply because the case arose under diversity jurisdiction, requiring application of Texas law. Texas recognizes a work-product privilege for material prepared, mental impressions developed, or communications made in “anticipation of litigation or for trial by or for a party or party’s representatives, including the party’s attorneys, consultants, sureties, indemnitors, insurers, employees, or agents.” Work product not prepared by an attorney or attorney’s representative is discoverable upon a showing that the party seeking discovery has a substantial need for the materials in the preparation of the party’s case, and the party is unable without undue hardship to obtain the substantial equivalent of the material by other means. The defendant satisfied its prima facie burden with an affidavit providing that the documents sought by the plaintiff were prepared after the defendant received a demand letter for policy limits. The plaintiff’s motion to strike the affidavit, on the grounds that it was not provided prior to the defendant’s response to the motion to compel, was denied because the failure to formally disclose the affidavit was harmless as the affiant had been repeatedly identified in response to other discovery requests. The court ruled the defendant satisfied its burden to show documents made after the demand letter were “in anticipation of litigation” and thus protected under the work-product privilege, but documents made prior to the demand letter were not protected. The court ruled the plaintiff failed to establish it had a substantial need for the protected materials.

Snap Removal, Improper Joinder; Remand

Molina v. Am. Access Cas. Co., SA-21-CV- 00363-XR (Rodriguez, X., Aug. 17, 2021). The plaintiff sued his auto insurance company and the insurance agency that facilitated the policy in state court for breach of contract, violations of the Texas Deceptive Trade Practices Act and Texas Insurance Code, fraud, and declaratory relief. Prior to service on the auto insurance company, the insurance agency removed based on diversity jurisdiction, arguing its citizenship (Texas) should be disregarded because it was improperly joined, and diversity existed between the auto insurance company (Illinois) and plaintiff (Texas). The plaintiff moved to remand. In the context of “snap removal” (removal prior to service on all defendants), the court addressed whether the removal was procedurally defective based on the “forum defendant rule,” which holds that a suit that is “otherwise removable solely on the basis of [diversity of citizenship] may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” The plaintiff argued the insurance agency could not remove an action to federal court based on its own improper joinder. The court relied on the Fifth Circuit’s analysis in Texas Brine Co., that “[a] non-forum defendant may remove an otherwise removable case even when a named defendant who has yet to be ‘properly joined and served’ is a citizen of the forum state.” Though noting the Texas Brine opinion focused on whether the in-state defendant had been properly served, and did not address whether in-state defendants who have been served but assert that they have been improperly joined can remove, the court concluded the analysis applied equally to the requirement that the in-state defendant be “properly joined.” The court relied on the language of 28 U.S.C. § 1441(b)(2) in concluding “[n]othing in the statute appears to prohibit removal by a forum-defendant who asserts that it has been improperly joined to the action” and that the in-state defendant insurance agency’s removal based on its own improper joinder was not barred by the forum defendant rule, even in the context of snap removal. The court further concluded the removing defendant established it was improperly joined. Noting the focus is “on the joinder and not the merits of the case,” the court, after analyzing the plaintiff’s petition and finding it omitted discrete facts that would determine the propriety of the joinder, concluded it was necessary to pierce the pleadings and conduct a summary inquiry to analyze the propriety of the joinder. In doing so, the court held the agency defendant was improperly joined because “there is no reasonable basis to predict that Plaintiff might be able to recover against [the insurance agency].” The court dismissed the improperly joined defendant from the action and denied the plaintiff’s motion to remand, concluding the court could exercise subject matter jurisdiction over the remaining defendant.

Removal, Improper Joinder

Polinard v. Covington Specialty Ins. Co., SA-21-CV-00353-XR (Rodriguez, X., Aug. 24, 2021). After a plaintiff sued an insurance company (Covington), agency (Tabak), and agent (Granados) in state court, Covington removed the action based on diversity jurisdiction, alleging the citizenship of Tabak and Granados must be disregarded based on improper joinder. The court conducted a Rule 12(b)(6) and 9(b) analysis of the petition and concluded the plaintiff improperly joined Tabak and Granados because neither owed a duty to the plaintiff under Texas law and the plaintiff’s claims sounding in misrepresentation failed to satisfy the pleading requirements of Rule 9(b). The court dismissed without prejudice all claims against Tabak and Granados and disregarded their citizenship, exercising jurisdiction over the remaining defendant, Covington. In denying the plaintiff’s motion for remand, the court rejected the plaintiff’s argument, under the “rule of unanimity,” that Covington did not receive consent for removal from Tabak. The court held that because it had concluded Tabak was improperly joined, the rule of unanimity was inapplicable.

Proportionality, Discovery Relating to Medical Billing Records

Acuna v. Covenant Transp., Inc., SA-20-CV- 01102-XR (Rodriguez, X., Aug. 31, 2021). In a personal injury action arising out of a motor vehicle accident, the defendants subpoenaed the plaintiffs’ medical providers, requesting billing records. The plaintiffs filed motions for protective order and motions to quash, arguing the billing records were not relevant or proportional to the issues in the lawsuit. The defendants argued billing records frequently contain detail regarding treatment, and that they were not seeking the subpoenaed records to ascertain any information related to billed amounts, but rather to get a more complete picture of the plaintiffs’ recent health history. Noting that Rule 26 provides “broad access to any nonprivileged matter relevant to any party’s claim or defense and proportional to the needs of the case” and that the defendants had articulated the basis for their request, the court found the records to be relevant and denied the motions for protective order and to quash. On the issue of proportionality, the defendants agreed to limit the requests to three years prior to the motor vehicle accident, and the court found the request with the narrowed time frame to be proportional.

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

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

Jeffrie B. Lewis practices business litigation and appellate law with Gonzalez Chiscano Angulo & Kasson, PC.