AUSTIN - The Texas Supreme Court undid damage caused by an appeals court on the verge of becoming a "Judicial Hellhole," the American Tort Reform Association notes in its annual report.
ATRA released its rankings Tuesday, with Philadelphia - a regular player in the report - taking the top spot over No. 2 New York City and South Carolina's asbestos court, which ranked third.
The report highlights jurisdictions in which businesses don't feel they are treated fairly by judges, legislators and juries. Though not one of the 10 designated "hellholes," Texas' Court of Appeals for the Fifth District landed on ATRA's watch list.
Three times this year the state Supreme Court overturned liability-expanding rulings from the Fifth District, which hears appeals in the Dallas area.
It was in June that the Supreme Court ruled a 15-year statute of repose protected Ford Motor Company protected it from liability in a rollover case. The decision, authored by Chief Justice Nathan Hecht, required plaintiff Jennifer Parks to bring the case on behalf of crash victim Samuel Gama within 15 years of the sale of the vehicle.
The Ford Explorer in question had been purchased in 2000 by a dealership then sold, but the lawsuit wasn't filed until May 2016. It alleged the design made Explorers prone to rollovers and the design of its roof and restraint system increased the risk of injury in such crashes.
The Fifth District had said the time for suing didn't begin until the exact date in which the dealership paid Ford fully for the Explorer.
"Even though the title to the vehicle transferred on the day the vehicle was released, the (Fifth District) determined that Ford was required to provide evidence that full payment was required to provide evidence that full payment was received outside the statutory period to dismiss the suit," ATRA's report says.
"The public policy behind the statute of repose is if there is a defect in the design or manufacturing of a product then it should be revealed within 15 years of the time of sale. After that time, a problem with the product is more likely to result from ordinary wear and tear, than a defect."
Seatbelts were the issue in a June 28 Supreme Court ruling that overturned a $26 million judgment against Honda. It protected manufacturers against liability over products that meet federal automotive safety standards.
In this case, the Texas high court ruled Honda proved its minivan seatbelt design was safe and federal regulations anticipated the possibility passengers wouldn’t use it properly.
Sarah Milburn sued Honda after she was left quadriplegic in an accident involving a 2011 Honda Odyssey minivan. Milburn was sitting in the middle seat of an Uber when it was struck by a pickup and rolled over.
The seatbelt was designed to be detached from the ceiling so the rear seats could be folded down, and Milburn claimed that was a design defect since vehicle owners might leave the ceiling anchor unattached and passengers wouldn’t know they were effectively unbelted.
A jury awarded Milburn $37 million after a three-week trial, which was reduced to $26 million to reflect liability of Milburn, the Uber driver and others.
The Fifth District had affirmed the verdict, even though Milburn's expert witness failed to address whether applicable regulations were inadequate to promote public safety, ATRA wrote.
Lastly, the Supreme Court ordered a new trial after the Fifth District had affirmed a $21.6 million verdict against Richard Wade, sued by Luiz Valdetaro and Vertical Computer Systems.
Wade was the company's former president and CEO who was sued for breach of fiduciary duty and fraud. Wade wasn't notified of a bench trial proceeding on Zoom, as notice had been sent to the wrong address.
He didn't find out about the trial until a Zoom invitation was sent the morning of trial. He had no time to retain counsel and represented himself.
"After being berated by the judge due to complaining about the circumstances of the trial, the defendant was hit with a $21 million verdict after just an hour of deliberation," ATRA wrote.
"The (Fifth District), instead of making an easy reversal due to a clerical error by the trial court, affirmed the decision."
The Supreme Court's reversal was made with "clear reprehension towards the lower courts," ATRA added.
Coming in 2025 should be a decision in another controversial Fifth District decision that could expand liability for bars and restaurants under the state's Dram Shop liability laws, ATRA noted.
The Fifth District had overturned a lower court ruling, finding Cadot Restaurant was liable for overserving a patron who was involved in a car crash after leaving with a blood-alcohol level of .139.
The restaurant said the plaintiff didn't appear to be intoxicated, but the Fifth District found the Dram Shop law doesn't require evidence Cadot witnessed intoxicated behavior, ATRA wrote.