Justia Texas Supreme Court Opinion Summaries

One of the exceptions to the Texas Public Information Act purports to protect information that “if released, would give advantage to a competitor or bidder.” A former Boeing employee submitted a Public Information Act request to the Port Authority of San Antonio for various Boeing corporation information. Boeing provided some of the requested information and withheld other information, claiming that the information withheld was “competitively sensitive information” that would “give advantage to its competitors.” The Attorney General concluded that none of the withheld information was exempt from disclosure under the Act. The trial court agreed with the Attorney General. The court of appeals affirmed, concluding that the exception protects the purchasing interests of a governmental body when conducting competitive bidding but not those of a private party that competes in the process. The Supreme Court reversed, holding (1) a private party may assert the exception to protect its competitively sensitive information; and (2) because Boeing demonstrated that the information at issue was competitively sensitive and will give advantage to its competitors if released, Boeing’s objection to the mandatory release of this information is sustained. View "The Boeing Co. v. Paxton" on Justia Law

In this case, a shareholder of a closely held parent corporation asserted a derivative lawsuit on behalf of the corporation’s wholly owned subsidiary against one of the subsidiary’s directors and several of the subsidiary’s officers, employees, and managers for breach of fiduciary duty and fraud. The trial court concluded that the shareholder did not have standing to bring the derivative lawsuit. The court of appeals reversed, holding that the shareholder had double-derivative standing to sue and that the business judgment rule did not impose a jurisdictional barrier that the shareholder had to overcome to bring the lawsuit. The Supreme Court affirmed, holding (1) the enactment of the Texas Business Corporation Act (TBCA) did not alter the way the business judgment rule applies to the merits of derivative lawsuits alleging that the directors or officers of a closely held corporation breached their duties to the corporation; (2) to achieve standing to assert a derivative proceeding under TBCA, a shareholder plaintiff is not required to plead and prove that the board of directors acted outside the protections of the business judgment rule in deciding not to pursue the corporation’s cause of action; and (3) Texas recognizes the concept of double-derivative standing. View "Sneed v. Webre" on Justia Law

To suspend execution of a money judgment on appeal, a judgment debtor must post security as required by Tex. Civ. Prac. & Rem. Code 52.006 and Tex. R. App. P. 24. The security must cover compensatory damages, interest, and costs, but is subject to caps. In this case, Longview Energy Company obtained a judgment against five defendants for breach of fiduciary duty. Defendants appealed and together posted a $25 million bond as security to supersede enforcement of the judgment. The trial court applied the caps separately to each of four jointly and severally liable defendants, requiring the four defendants to post security equal to the lesser of $25 million or fifty percent of Defendants’ net worth. The court of appeals reversed the security order, concluding that Defendants were together required to post only $25 million in security to supersede the judgment as to them all. All parties petitioned the Supreme Court for relief by mandamus. The Supreme Court denied mandamus relief, holding (1) the money judgment award at issue was not for “compensatory damages,” and therefore, the Court need not consider whether the court of appeals correctly applied the caps on security; and (2) the trial court did not abuse its discretion in ordering post-judgment discovery. View "In re Longview Energy Co." on Justia Law

A judgment creditor attempted to collect from a partnership after receiving a judgment against the partnership. The partnership proved to be undercapitalized, and its assets could not satisfy the judgment debt. The judgment creditor brought this action seeking a judgment against the individual partners. The trial court granted the partners’ motion for summary judgment. The court of appeals affirmed, concluding that limitations precluded pursuit of the partners’ assets because the limitations period began when the underlying cause of action accrued, and that period had passed. The court of appeals affirmed. The Supreme Court reversed, holding (1) the limitations period against a partner generally does not commence until after final judgment against the partnership is entered; and (2) because this action was brought within that period, limitations did not bar this suit against the partners. View "Am. Star Energy & Minerals Corp. v. Stowers" on Justia Law

Randall Hughes was an employee and a minority shareholder of Cardiac Perfusion Services, Inc. (CPS). After Hughes’s employment terminated, CPS and Michael Joubran filed an action against Hughes and also requested declaratory relief. Hughes filed counterclaims for breach of fiduciary duty against Joubran, alleging that Joubran engaged in oppressive conduct toward him. After a jury trial, the trial court ordered Joubran and CPS to buy out Hughes’s shares based on its determination that Joubran engaged in “oppressive conduct” to the rights of Hughes. The court of appeals affirmed. The Supreme Court reversed in part and affirmed in part, holding that there is no common-law cause of action for shareholder oppression, and the only statutory remedy for “oppressive” actions is a rehabilitative receivership. Remanded. View "Cardiac Perfusion Servs., Inc. v. Joubran" on Justia Law

A minority shareholder (Plaintiff) filed suit against a closely held corporation and the corporation’s board of directors, alleging that the directors engaged in oppressive conduct and breached their fiduciary duties by refusing to buy Plaintiff’s shares for fair value or meet with prospective buyers. The jury found in Plaintiff’s favor on essentially all of her claims. The trial court rendered judgment on the jury’s verdict and ordered the corporation to purchase Plaintiff’s shares for $7.3 million. The court of appeals upheld the buy-out order, concluding that the directors’ refusal to meet with Plaintiff’s prospective purchasers constituted oppressive conduct as a matter of law. The Supreme Court reversed, holding (1) the directors’ conduct was not “oppressive” under the relevant statute; (2) the statute does not authorize courts to order a corporation to buy out a minority shareholder’s interests; and (3) there is no common-law cause of action for “minority shareholder oppression.” Remanded for consideration of Plaintiff’s breach of fiduciary duty claim. View "Ritchie v. Rupe" on Justia Law

Mark Fisher and Reece Boudreaux were limited partners of Nighthawk Oilfield Services, Ltd. (“Nighthawk”), which acquired Richey Oilfield Construction, Inc. (“Richey Oil”) from Mike Richey. The business did not go well, and Nighthawk and Richey Oil filed for bankruptcy. Richey sued Fisher and Boudreaux in Wise County where Richey resided, alleging claims for, inter alia, breach of fiduciary duty, common law fraud, statutory fraud and violations of the Texas Security Act. Fisher and Boudreaux responded by moving to transfer venue to Tarrant County or dismiss the suit pursuant to the mandatory venue selection clauses in the acquisition documents. The trial court denied the motions. Fisher and Boudreaux sought mandamus relief from the court of appeals, which denied relief. The Supreme Court conditionally granted relief, holding that the trial court abused its discretion by failing to enforce the venue selection clauses in the acquisition documents. View "In re Fisher" on Justia Law

The Fort Worth Diocese was formed in 1982 and was admitted into union with The Episcopal Church (TEC). The Fort Worth Corporation was formed the next year. After a doctrinal controversy arose within the TEC, the Forth Worth Corporation filed amendments to its articles of incorporation to remove all references to TEC. The Fort Worth Diocese then voted to withdraw from TEC. TEC later filed suit against the Fort Worth Diocese, the Fort Worth Corporation, the former Bishop, and other former TEC members (the Diocese) seeking possession of the property held in the name of the Diocese and the Fort Worth Corporation. The parties disagreed whether the "deference" or "neutral principles of law" methodology should be applied to resolve the property issue. The trial court agreed with TEC that deference principles should apply, and after applying deference principles, granted summary judgment for TEC. The Supreme Court reversed, holding (1) based on the Court's decision in Masterson v. Diocese of Northwest Texas, the trial court erred by granting summary judgment to TEC on the basis of deference principles; and (2) the case must be remanded for further proceedings under neutral principles. Remanded.View "Episcopal Diocese of Fort Worth v. Episcopal Church" on Justia Law

Title to property of a local church (the Good Shepherd) was held by a Texas non-profit corporation (Corporation). The Corporation was formed as a condition of Good Shepherd's congregation being accepted into union with the Episcopal Diocese of Northwest Texas (Diocese). After members of Good Shepherd's parishioners began to disagree with doctrinal positions adopted by The Episcopal Church of the United States (TEC), a majority of the congregation voted to amend Good Shepherd's articles of incorporation and bylaws to withdraw God Shepherd from communion with TEC and the Diocese. The Corporation and the withdrawing faction maintained possession of the property. The Diocese and leaders of the portion of the congregation loyal to TEC and the Diocese filed suit seeking possession of the property. The trial court granted summary judgment for the loyal faction, and the court of appeals affirmed. The Supreme Court reversed, holding (1) the legal methodology called "neutral principles of law," rather than "deference," should be applied in this case; and (2) applying neutral principles of law to the record, the trial court erred by granting summary judgment. Remanded.View "Masterson v. Diocese of Northwest Texas" on Justia Law

Mike Richey sold his interest in Richey Oilfield Construction, Inc. to Nighthawk Oilfield Services, Ltd. Richey remained employed as president of Richey Oil and became a limited partner in Nighthawk. The primary agreements regarding the transaction were a stock purchase agreement, an agreement for the purchase of Richey Oil’s goodwill, and a promissory note. Each of the acquisition agreements contained a forum selection clause naming Tarrant County as the venue for state court actions. When the business did not go as well as the parties had hoped, Richey filed suit in Wise County, where Richey resided, against two Nighthawk executives (together, Relators) for, among other claims, breach of fiduciary duty, common law fraud, statutory fraud, and violations of the Texas Securities Act. Relators responded by unsuccessfully moving the trial court to transfer venue to Tarrant County or dismiss the suit pursuant to the mandatory venue selection clauses in the acquisition agreements. Relators subsequently sought mandamus relief. The Supreme Court conditionally granted relief, holding that the trial court abused its discretion by failing to enforce the forum selection clauses in the acquisition agreements. View "In re Fisher" on Justia Law