Warren W. Harris and Brian R. Hogue 2016-12-20 17:55:40
The Texas Supreme Court addressed many interesting and important appellate issues this term. These issues include the requirements for personal jurisdiction, the viability of common-law grounds for vacating an arbitration award, and the proper characterization of pleadings. In two companion cases, the court addressed the reach of Texas’ long-arm statute. In Cornerstone Healthcare Group Holding, Inc. v. Nautic Management VI, LP, the court addressed whether a nonresident entity can avoid personal jurisdiction over a tortious interference claim by forming a Texas subsidiary to buy a Texas-based asset from a Texas-based seller.1 After Cornerstone lost the right to purchase the asset, it sued the resident Texas buyer and its nonresident parents for tortious interference. 2 The nonresident parents contested personal jurisdiction because they did not have direct contact with Texas, they were distinct legal entities, and Cornerstone did not seek to pierce the corporate veil. The court of appeals agreed there was no jurisdiction.3 The Supreme Court reversed because the nonresident entities impliedly consented to jurisdiction by directing and funding the acquisition of a Texas asset from a Texas seller and formed its Texas-based subsidiary for that purpose.4 “[K]eeping legal entities distinct does not mean they can escape jurisdiction by splitting an integrated transaction into little bits.”5 The court distinguished Searcy v. Parex Resources, Inc.,6 which it decided the same day. In Searcy, the plaintiff brought a tortious interference claim against a nonresident buyer that purchased from a nonresident seller the shares of another nonresident entity that owned foreign assets.7 The nonresident seller had operations in Texas, and its Texas-based executives negotiated the transaction.8 The court, in Searcy, concluded that the nonresident buyer was not subject to specific personal jurisdiction because, unlike in Cornerstone, the nonresident buyer did not “specifically seek out a Texas seller or Texas assets.”9 On the topic of arbitration, the court in Hoskins v. Hoskins resolved a split among the courts of appeals on whether the Texas General Arbitration Act precludes vacatur of an arbitration award on common-law grounds.10 The court unanimously held that the TAA’s enumerated vacatur grounds are exclusive and foreclosed common-law grounds for vacatur.11 Under this ruling, courts can no longer consider manifest disregard of the law—or other common-law grounds—as a legal basis for vacating an arbitration award.12 In a decision on a procedural issue, the court reemphasized that formal pleading rules cannot be used to ignore a pleading’s substance.13 In In re J.Z.P., the ex-husband filed a motion to modify a divorce decree, which the trial court granted after the ex-wife failed to respond.14 After the trial court’s plenary jurisdiction expired, the ex-wife filed a “Motion to Reopen and to Vacate Order,” which argued that neither she nor her counsel had received notice of the ex-husband’s motion.15 The trial court denied the motion, and the court of appeals dismissed the ex-wife’s appeal for want of jurisdiction because she had not captioned the motion as one to extend pleading deadlines under Rule 306a of the Texas Rules of Civil Procedure.16 In a per curiam opinion, the court reiterated that the substance of the relief sought determines the nature of the pleading (not its title), reversed the judgment of the court of appeals, and remanded for further proceedings.17 Notes 1) 493 S.W.3d 65, 67-70 & n.7 (Tex. 2016). 2) Id. at 69. 3) Id. at 71-72. 4) Id. at 73. 5) Id. (quotation omitted). 6) 496 S.W.3d 58 (Tex. 2016). 7) Id. at 62-66. 8) Id. at 73-77. 9) Id. at 77. 10) No. 15-0046, 2016 WL 2993929, at *3-4 (Tex. May 20, 2016). 11) Id. at *7. 12) Id. 13) 484 S.W.3d 924 (Tex. 2016). 14) Id. at 924-25. 15) Id. 16) Id. at 924. 17) Id. at 925-26. WARREN W. HARRIS is a partner in Bracewell in Houston, where he heads the firm’s appellate group. He is a past president of the Texas Supreme Court Historical Society and a past chair of the Texas Bar Journal Board of Editors. BRIAN R. HOGUE is an appellate associate in Bracewell’s Houston office. Previously, he clerked for Judge Richard C. Wesley of the U.S. Court of Appeals for the 2nd Circuit and Judge Lee H. Rosenthal of the U.S. District Court for the Southern District of Texas, Houston Division.
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