Harry Lee Hudspeth

This case concerns whether two insurance companies owe a duty to defend and indemnify their policyholders, a group of shopping center developers, in an underlying state court lawsuit brought by tenants alleging that the developers made false representations about the development's progress and occupancy, leading to economic losses. The court granted summary judgment to the insurers, declaring that they have no duty to defend or indemnify under the commercial general liability and umbrella policies. The core reasoning was that the tenants' claims alleged only economic injury from unmet promises, not 'bodily injury' or 'property damage' caused by an 'occurrence' as defined in the policies, since there was no physical injury to tangible property or loss of its use. Because the duty to defend was absent, the duty to indemnify was also negated, and the policyholders' counterclaims under the Texas Prompt Payment Statute were dismissed.

business & regulatory

The case involved petitions by Gary Woods, as tax matters partner for two partnerships, seeking judicial review of IRS final partnership administrative adjustments that disallowed ordinary and capital losses claimed on 1999 tax returns from participation in a tax shelter known as COBRA. The court had previously ruled that the losses lacked economic substance and were properly disallowed. On the remaining issue of accuracy-related penalties under 26 U.S.C. § 6662, the court reversed the penalty for gross or substantial valuation misstatement, holding that it did not apply when a deduction is totally disallowed rather than based on an overstated value or basis. The court affirmed penalties for negligence or disregard of rules and for substantial understatement of income tax, reasoning that Woods failed to show reasonable cause, good faith, or reasonable reliance on advisors given the aggressive nature of the shelter, his sophistication, and warnings including IRS Notice 99-59.

taxesbusiness & regulatory

This case involves two consolidated petitions by Gary Woods for judicial review of IRS final partnership administrative adjustments to the 1999 tax returns of Tesoro Drive Partners and SA Tesoro Investment Partners. The court granted the defendant's motion for judgment as a matter of law after trial, disallowing the ordinary and capital losses claimed on the partnership returns from a COBRA tax shelter involving foreign currency options, stock purchases, and transfers among LLCs, partnerships, and S corporations. The core reasoning was that the transactions lacked economic substance under Fifth Circuit precedent such as Klamath Strategic Investment Fund v. United States, because they were not compelled by business or regulatory realities and were undertaken solely to create artificial tax losses.

taxesbusiness & regulatory

This case involves an insurance coverage dispute between Nautilus Insurance Company and Country Oaks Apartments, Ltd., regarding whether a commercial general liability policy covers claims arising from carbon monoxide poisoning of a child due to roofing work that blocked a vent. Nautilus sought a declaratory judgment that it had no duty to defend or indemnify Country Oaks in the underlying state court personal injury lawsuit, citing the policy's pollution exclusion. The court granted summary judgment to Nautilus and denied the defendant's motion, holding that the pollution exclusion unambiguously applied because carbon monoxide qualifies as a pollutant under the policy's definition of any gaseous irritant or contaminant, and the injuries resulted from its discharge or accumulation. The decision relied on the plain language of the policy, Texas rules of contract interpretation, and prior case law interpreting similar exclusions.

business & regulatorytorts & liability

In this case, plaintiff Kerry Charlton sued his insurer Evanston Insurance Company seeking a declaration that Evanston had a duty to defend and indemnify him in an underlying state-court lawsuit brought by a homeowner alleging defective construction work, improper supervision of subcontractors, and resulting property damage such as water intrusion. Both parties moved for summary judgment. The court denied Charlton's motion and granted Evanston's, holding that the underlying claims did not arise from an "occurrence" under the policies because they alleged breach of contract and implied warranties rather than accidental damage, and that certain exclusions for faulty workmanship and water damage also barred coverage. The decision relied on Texas case law interpreting commercial general liability policies and the policy language itself.

business & regulatorypropertytorts & liability

The case involved former employees of Synthesys Technologies, Inc. suing the company and its officers, including defendant Gittes, to recover unpaid wages and overtime under the Fair Labor Standards Act along with related Texas law claims. After a no-answer default judgment was entered against Gittes in 2003, he moved more than a year later under Federal Rule of Civil Procedure 60(b)(4) to vacate the judgment, claiming lack of personal jurisdiction due to improper service via New York's "nail and mail" method. The court denied both the motion to vacate and the related stay request, holding that the judgment was not void because service complied with state law: plaintiffs exercised due diligence, the New York apartment qualified as Gittes' usual place of abode, and the method satisfied due process requirements for personal jurisdiction.

labor & employmentprocedure

The case concerned former employees of Synthesys Technologies, Inc. who sued the company and several board members, including Walter Loewenbaum, for unpaid wages under the Fair Labor Standards Act and Texas Payday Act, plus claims of retaliation, conspiracy, tortious interference with contract, and breach of contract arising from events after the company failed to meet payroll. Loewenbaum moved for summary judgment on all claims against him individually. The court denied summary judgment on the FLSA and Texas Payday Act claims because material fact issues existed as to whether Loewenbaum qualified as an employer and on the retaliation and tortious interference claims due to disputed facts about his communications with the plaintiff's new employer; it granted summary judgment on the breach of contract claims and denied the remaining requests as moot.

labor & employmenttorts & liabilitybusiness & regulatory

This case is an appeal by Socorro Independent School District under the Individuals with Disabilities Education Act (IDEA) challenging a Texas Education Agency hearing officer's ruling that ordered the district to reimburse a parent for private school costs after she unilaterally withdrew her daughter Angelic, who has a learning disability, from public elementary school. The parent believed the district's proposed individualized education program (IEP) was insufficient to allow advancement to middle school. The court applies a virtually de novo review standard, requiring it to determine independently whether the public school provided a free appropriate public education (FAPE) by assessing if the IEP was individualized based on the student's needs, delivered in the least restrictive environment, implemented collaboratively, and produced meaningful (non-de minimis) academic benefits, with the parent bearing the burden to prove the IEP was flawed and reimbursement warranted only if both the public placement violated IDEA and the private placement was appropriate.

civil rightsfederal powerprocedure

The case concerns the State of Texas seeking to enjoin gambling operations at the Speaking Rock Casino on the Ysleta del Sur Pueblo reservation under the federal Restoration Act. The defendants, including the Tribe, moved to dismiss on grounds of tribal sovereign immunity, failure to join the United States as an indispensable party, and the Texas Attorney General's lack of authority to bring the suit. The court examined the Restoration Act's provisions that prohibit on-reservation gaming barred by state law, apply state penalties, and grant federal courts exclusive jurisdiction over enforcement actions, determining that these terms permit the state's lawsuit to proceed despite tribal immunity claims.

criminal lawfederal power

The case was an appeal by Government Employees Credit Union from a U.S. Bankruptcy Court order denying its motion to compel Chapter 7 debtors Mario and Lorenza Castillo to comply with 11 U.S.C. § 521 regarding a vehicle financed by GECU. The bankruptcy court had ruled that the debtors could retain the 1994 Volkswagen Jetta by continuing to make payments, treating this as a valid fourth option under § 521(2)(A) in addition to surrender, redemption, or reaffirmation. The district court reversed, holding that Fifth Circuit precedent in Johnson v. Sun Finance Co. limits debtors strictly to the three options listed in the statute. The matter was remanded to the bankruptcy court for further proceedings.

procedureproperty

This case involves migrant workers recruited in Texas by a labor contractor working with defendant Connleaf to harvest tobacco in Massachusetts, who sued alleging violations of the Migrant and Seasonal Agricultural Worker Protection Act and Fair Labor Standards Act through underpayment of wages, improper deductions, and unsafe housing conditions. Defendant moved to dismiss for lack of personal jurisdiction under Rule 12(b)(2) and improper venue under Rule 12(b)(3). The court denied both motions, finding that defendant's contacts with Texas—including sending contracts, regulations, and payments to the recruiter and engaging in phone calls—established minimum contacts satisfying due process, that Texas had a strong interest in the matter, and that venue was proper under the AWPA and 28 U.S.C. § 1391(b) since substantial events occurred in the district.

labor & employmentprocedure

This case involved an employee, Mario Carlos, who sued his employer, White Consolidated Industries (Eureka), under Texas negligence law for an on-the-job back injury sustained while operating two machines, and under ERISA § 510 for alleged wrongful discharge to interfere with his employee benefits. The court found in favor of the defendant on both claims after a bench trial. On the negligence claim, the court held that Carlos failed to prove by a preponderance of the evidence that Eureka's actions were more negligent than his own under Texas comparative responsibility rules, as he had not shown that requiring work on two machines without assistance breached a duty of ordinary care. On the ERISA claim, the court determined that even assuming a prima facie case, Carlos did not establish that Eureka's stated reasons for discharge—violations of sexual harassment policy and poor performance—were a pretext for intent to interfere with benefits.

labor & employmenttorts & liability

This case was a civil action under the Federal Tort Claims Act in which plaintiff Ralph Portillo alleged medical malpractice by Army personnel at William Beaumont Army Medical Center following ankle surgery, claiming negligence in catheterization caused permanent bladder dysfunction and prostate issues, and later adding claims of negligence in spinal anesthesia leading to back problems and diabetes. The court dismissed the anesthesia-related claims for lack of subject matter jurisdiction because they were not presented in a timely administrative claim as required by 28 U.S.C. § 2675. On the remaining catheterization claims, the court granted summary judgment to the defendant, finding no genuine issue of material fact since expert testimony established that the treatment met the standard of care and did not proximately cause the injuries. The ruling rested on the jurisdictional prerequisites of the FTCA and Texas law requiring proof of negligence and causation in malpractice cases.

torts & liabilityprocedure

Plaintiffs Lionel and Rebecca Cruz sued the Tigua Indian Tribe, its tribal council, and its governor, alleging violations of the Rehabilitation Act and the Voting Rights Act. The defendants moved to dismiss the suit on grounds of tribal sovereign immunity. The court denied the motion as to the Rehabilitation Act claim, reasoning that the statute's definitions of covered programs and activities expressly include Indian tribes and that its remedies provision constitutes a waiver of immunity. The court granted the motion to dismiss the Voting Rights Act claim, finding that the statute's text does not indicate congressional intent to apply it to Indian tribal elections.

civil rightsfederal powerelections

The case consisted of two appeals from orders and judgments issued by the U.S. Bankruptcy Court for the Western District of Texas in matters involving Hartec Enterprises, Inc. The district court observed that the parties had compromised and settled their differences. On that basis, the court vacated and set aside the bankruptcy court's orders and judgments. It then remanded the cases to the bankruptcy court with directions to dismiss them.

procedurebusiness & regulatory

In Soto v. Tonka Corp., the plaintiff sued her former employer in Texas state court, alleging she was discharged in retaliation for filing a workers' compensation claim under Texas law. The defendant removed the case to federal district court, asserting diversity jurisdiction under 28 U.S.C. § 1332. The court granted the plaintiff's motion to remand, finding that the pleadings failed to establish the parties' citizenship or the required jurisdictional amount. Additionally, the court held that 28 U.S.C. § 1445(c) prohibits removal of civil actions arising under a state's workers' compensation laws, and this retaliatory discharge claim fell within that category.

labor & employmentprocedure

Mary Watson sued her employer's workers' compensation insurance carrier in Texas state court, claiming underpayment of benefits awarded by the state Industrial Accident Board under the Texas Workers' Compensation Act and breach of the duty of good faith and fair dealing. The defendant removed the case to federal district court, asserting jurisdiction based on diversity of citizenship and amount in controversy as well as federal question jurisdiction due to alleged ERISA preemption. The court granted the plaintiff's motion to remand, holding that the pleadings failed to establish diversity jurisdiction and that 28 U.S.C. § 1445(c) expressly bars removal of civil actions arising under state workers' compensation laws, including related common-law claims that presuppose the existence of such benefits.

procedurelabor & employmentfederal power

The plaintiff sued her former employer in Texas state court, claiming she was discharged after filing a workers' compensation claim in violation of the Texas Workers' Compensation Act. The defendant removed the case to federal court, asserting jurisdiction under federal question and labor-management relations statutes. The court ordered the case remanded sua sponte to state court, ruling that 28 U.S.C. § 1445(c) bars removal of civil actions arising under state workers' compensation laws and that such claims are not preempted by federal labor law.

labor & employmentprocedure

This case involves a petition for a writ of habeas corpus under 28 U.S.C. § 2254 filed by Leon Sanders, who was convicted of murder in Texas state court after relying solely on an insanity defense and sentenced to fifty years in prison. The federal district court granted the petition, vacated the conviction, and remanded for a new trial. The core reasoning was that the prosecutor's closing arguments improperly characterized the insanity defense by suggesting the defendant would be 'cut loose' or given a 'license to kill,' which deprived the petitioner of due process and fundamental fairness at trial, despite the lack of contemporaneous objections by defense counsel. The court noted that the arguments were so prejudicial that they warranted relief even under the circumstances presented.

criminal lawprocedurecivil rights

This case involves the United States suing JT Construction Company and its president under the False Claims Act for allegedly failing to disclose inflated subcontractor bids in a negotiated government contract for facilities at Fort Bliss, along with common law claims for payment under mistake of fact and unjust enrichment. The defendants moved for summary judgment on the False Claims Act claims, arguing the criminal acquittal of the president precluded a finding of guilty intent, and moved to dismiss the common law claims under the Contract Disputes Act. The court denied both motions. It reasoned that the civil case requires only a preponderance of evidence, unlike the criminal case, leaving genuine factual issues, and that the Contract Disputes Act does not apply to claims involving fraud.

criminal lawbusiness & regulatory