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Western District of Texas Court Summaries
FEDERAL COURT UPDATE
By Soledad Valenciano, Jeffrie Lewis, and Sabrina Salazar
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) with the style and cause number of the case, and the entry date and docket number of the order.
Rule 30; New Evidence; Second Deposition
Rodriguez v. State Farm Lloyds, NO. SA21-CV-508-OLG (Garcia, O., November 14, 2024)
In support of a summary judgment motion on the applicability of a policy exclusion, the defendant erroneously attached the wrong insurance policy to the motion, and as such, the motion was denied. The following day, the court vacated the remaining pretrial deadlines and trial setting and ordered the defendant to file a correct, complete, and verified copy of the policy and ordered the parties to file a joint advisory stating, among other things, whether additional discovery was necessary. In the advisory, the plaintiff asserted for the first time that he intended to testify he does not recall signing the exclusion. The court provided thirty days for the parties to conduct limited discovery on issues raised in the advisory. When the defendant noticed the plaintiff’s deposition, the plaintiff filed a motion to quash under FRCP 30, stating that a “party must obtain leave of court” if the individual to be deposed has already been deposed in the case. The court denied the motion to quash, holding that by reopening discovery, it necessarily authorized a second deposition of the plaintiff because, without a second deposition, it would be impossible to credibly examine the plaintiff’s new statement that he does not recall signing the exclusion. Under Rule 30, “the court must grant leave to the extent consistent with FRCP 26(b)(1) and (2)” considering the relevance and proportionality of the discovery sought and whether (1) the discovery sought is unreasonably cumulative or duplicative and (2) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action. In general, courts allow “parties to reopen depositions when new information comes to light that creates the need for further questioning.”
Venue; Rule 12(b)(3) Motion
Capitol Specialty Ins. Co. v. TGG Mgmt. Co., NO. SA-24-CV-492-OLG (Garcia, O., November 22, 2024)
The defendants were the target of a phishing attack and erroneously wired over eighthundred thousand dollars of their clients’ funds to a third party orchestrating the ransom attack. The clients sued, and the defendants invoked their insurance policy. The insurer (CSIC) agreed to defend the defendants in the clients’ lawsuit but reserved the right to seek a judicial determination regarding coverage and then filed suit seeking a judicial determination that it owes no duty to defend or indemnify. The defendants filed alternative motions to dismiss for improper venue, to transfer for improper venue, and to transfer for convenience. While the Fifth Circuit has not yet determined which party bears the burden on a Rule 12(b)(3) motion, the majority of district courts within this circuit have imposed the burden of proving that venue is proper on the plaintiff, once a defendant has objected to the plaintiff’s chosen forum. On a Rule 12(b) (3) motion to dismiss for improper venue, the court must accept as true all allegations in the complaint and resolve all conflicts in favor of the plaintiff; however, the court is permitted to look at evidence in the record beyond simply those facts alleged in the complaint and its proper attachments. With respect to considerations of residential venue, it was undisputed that one defendant is domiciled, and therefore resides, in the Southern District of California. The record evidence also indicated that another defendant has “always maintained its principal place of business” in the Southern District of California. Therefore, venue in the Western District of Texas was improper under the residential venue provision. With respect to transactional venue considerations, in an insurance coverage dispute, venue is proper where the underlying event for which coverage is sought occurred, including where the insurance policy was negotiated, issued, or signed. Here, “every key event giving rise to this dispute occurred outside the Western District of Texas” making venue in the Western District of Texas improper under the transactional venue provision. The court held the “fallback” venue provision was inapplicable to the analysis as it only applies in the “rare” circumstance where “there is no federal district that will satisfy either the residential venue or transaction venue provisions.” Therefore, the court found that it is in the interest of justice to transfer the case to the Southern District of California, and that dismissal “would result in wasteful duplication of effort, additional filing expenses, and unnecessary delay for both parties.”
Retaliation; Amending Complaint; Motion to Dismiss
Stamps v. Univ. of Tex. Sys., SA-24-CV-294HJB (Bemporad, H., November 13, 2024)
From 2015 through 2020, the plaintiff was a professor of music, arts, and entertainment technology at UT Austin. He filed a lawsuit against UT Austin in December 2020, alleging that it retaliated against him in violation of Title VII. That dispute was settled in June 2023. During that three year period, however, the plaintiff applied for jobs at the University of Texas at San Antonio (UTSA). In December of 2021, he applied for the “DH” position, and defendant University of Texas System (“UT System”), rather than UTSA, notified him that he did not get the “DH” position. In January of 2023, the plaintiff learned he also did not get the “DM” position and shortly thereafter filed a complaint with UTSA’s Equal Opportunity Services alleging he was retaliated against because of his lawsuit against UT Austin. In June of 2023, plaintiff learned he did not get the “DA” position and that the course he was teaching parttime at UTSA was being eliminated. Because of these events, Plaintiff sued UTSA and the UT System for retaliation under Title VII, alleging he was being retaliated against for the lawsuit against UT Austin and for filing a complaint with UTSA-EOS. The defendants moved to dismiss for failure to state a claim on which relief could be granted as the plaintiff could not prove causation and or that the UT System was his employer. Because the plaintiff failed to plausibly allege that UTSA retaliated as to the DH position due to the UT Austin lawsuit (which the plaintiff did not allege UTSA knew of) or due to the EOS complaint (which was later), that claim was dismissed as to UTSA. As to the DM position, a six-month gap in time would need to be bridged by the plaintiff, and as such, the court considered (with all inferences in the plaintiff’s favor) the chronology of alleged events leading up to the plaintiff’s non-hire for the DM position, finding it was “barely” enough to support a plausible inference of causation. This chronology of events permitted a reasonable inference that UTSA chose not to hire the “challenging” applicant who sued his prior employer, and therefore, the court did not dismiss that claim. Finally, UTSA’s decision not to hire the plaintiff for the DA position occurred more than a year after UTSA learned about the plaintiff’s lawsuit against UT Austin and more than five months after the plaintiff alleged that he filed his EOS complaint regarding the non-hire for the DM position—and both time periods were well above the four-month ceiling sanctioned by the Fifth Circuit. Nevertheless, the court considered the plaintiff’s separate TWC/ EEOC complaint as another basis for retaliation, finding the TWC/EEOC complaint contributed to a chronology of events from which a reasonable inference of retaliation may be made as to the non-hire by UTSA for the DA position. Although the DH, DM, and DA positions were UTSA positions, because the plaintiff plausibly alleged that UT System had the right to hire or decline to hire him for at least the DH position, the court reasonably inferred at this stage that UT System had the right to hire or decline to hire him for the DM and DA positions as well. Accordingly, the court denied the defendant’s motion as to all three of plaintiff’s retaliation claims against the UT System.
12(b)(1) Motion to Dismiss; Immigration; Citizenship; Administrative Appeal; Administrative Appeals Office
Sarabia v. Mayorkas, No. SA-23-CV-964FB (HJB) (Bemporad, H. – August 6, 2024); adopted by Sarabia v. Mayorkas, No. SA-23-CA-964-FB (Biery, F. – August 29, 2024)
The defendant moved to dismiss the plaintiff’s lawsuit, which sought declaratory judgment regarding his citizenship status pursuant to 8 USC § 1503(a) and 28 USC § 2201. Specifically, in 2012, the plaintiff filed an N-600 Application for Certificate of Citizenship, which was denied in 2015. The plaintiff appealed this denial, and in February of 2018, the Administrative Appeals Office (AAO) dismissed the appeal. The plaintiff subsequently filed a motion for reconsideration and to reopen the case, which the AAO denied. Section 1503(a) includes a 5-year statute of limitations, which the court found barred the plaintiff’s claim, as his appeal was dismissed in February of 2018, but this lawsuit was not filed until August of 2023. The defendant’s motion to dismiss was based on a lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(1). Therefore, at issue was whether § 1503(a)’s limitations period is “jurisdictional” as that word is used in Federal Rule of Civil Procedure 12(b)(1). The court concluded that this statute, which confers subject matter jurisdiction upon the courts based on its waiver of sovereign immunity, likewise specifically limits that jurisdiction to five years, making it jurisdictional in nature as it conditions such waiver on a claim being brought within a certain timeframe.
Summary judgment; breach of contract; consequential damages; offset
United States of Am. F/U/B Titan v. TootleQri JV, Ltd. Liab. Co., No. SA-22-CV-129FB (HJB) (Bemporad, H. – February 22, 2024); adopted by United States of Am. F/U/B Titan Consultants v. Tootle-Qri JV, Ltd. Liab. Co., No. SA-22-CV-0129-FB (Biery, F. – March 11, 2024)
Defendant Tootle entered into a contract with plaintiff Titan wherein Titan agreed to provide a quality control manager (QCM) for Tootle’s construction project. Pertinent to this dispute are two contract provisions: first, the contract allowed either party to terminate for any reason, on 30 days’ notice; second, it contained a waiver of consequential damages. Due to a misunderstanding, Titan ceased performance and terminated the contract. However, it did so without giving the requisite 30 days’ notice. According to Tootle, the lack of a QCM onsite resulted in $35,765.67 in damages, made up of additional time to complete the project, supervisory time, additional labor, general conditions, and general and administrative costs. Alleging that the damages caused by Titan’s premature termination of the contract offset Titan’s invoices, which amounted to $31,242.90, Tootle refused to pay Titan. Titan then filed suit against Tootle claiming a Miller Act violation, breach of contract, and unjust enrichment, and seeking payment of its invoices. Tootle filed a counterclaim for breach of contract and alleged that the damages it incurred as a result thereof offset its outstanding balance to Titan. Titan moved for summary judgment on its claims as well as Tootle’s counterclaim. Agreeing on all but whether the $35,765.67 in damages constituted consequential damages, Tootle argued that they were “general damages”—a category of damages not waived under the contract. The contract’s choice of law provision designated Florida law as controlling. The court concluded that under Florida law, Tootle’s alleged damages constitute consequential damages. As such, the damages were not recoverable under the contract, and Tootle’s breach of contract claim failed as a matter of law.
