Texas High Court Overturns $177K Sanctions Order for Pretrial Survey

AUSTIN, Texas (CN) — A state judge erred in slapping a high-profile Dallas attorney with $177,000 in sanctions over a pretrial phone survey because the survey was not a ploy to taint the jury pool, the Texas Supreme Court ruled Friday.

Brennen Teel, 31, was visiting friends at their new home in Lubbock, Texas, in August 2012 when it was struck by lightning, which punctured five holes in a natural gas pipe in the home’s attic. That sparked a fire, which caused a backdraft explosion that killed Teel.

Within weeks, Teel’s parents and the homeowners sued the pipe manufacturer Titeflex Corporation, claiming its pipe — called corrugated stainless-steel tubing, or CSST for short — was too thin to hold up against lightning strikes.  

The Texas Supreme Court in Austin. (Courthouse News photo / Kelsey Jukam)

Titeflex tried to shift the blame. It brought third-party claims against the home builder and others, claiming its pipe was safe but had been improperly installed. It disputed the Lubbock fire marshal’s conclusion the pipe had been properly installed even though it was touching electric wires.

Titeflex hired William A. Brewer III, a Dallas attorney who is outside counsel for the National Rifle Association, and his firm to defend it against the litigation.

Due to the wall-to-wall coverage the local press gave to the Teel case and a moratorium the Lubbock City Council placed on the use of CSST the month after the incident, Brewer’s firm commissioned a telephone survey of 300 Lubbock County residents randomly selected from a database of 20,000 names.

Brewer said he commissioned the survey to gauge the public’s attitude toward Titeflex’s legal defense game plan and about the gas pipe.

Brewer did not give Judge Ruben Reyes advance notice of the survey, done by a contracting firm in May 2014, and no rule required him to. But he acknowledged he had commissioned the survey after the Teel family’s attorneys and other counsel found out about it.

Opposing counsel moved for sanctions, claiming the survey was an overt attempt to convince survey respondents who was to blame for gas pipe failures in Lubbock County.

Though the Titeflex case settled on the eve of trial in June 2014, the sanctions case proceeded and it was revealed in hearings that city employees, sitting judges, city council members  and members of the trial judge’s staff and family were on the call list for the survey, and that the survey company had called two city employees who had been deposed as witnesses for the case and spoken to the men’s wives.

Brewer testified he should have sat down with the survey company to ensure people with connections to the case were excluded from the database, but maintained the survey was appropriate because he had hired a reputable third party to do it.  

Reyes ordered Brewer to pay $177,000 in fees to attorneys representing the plaintiffs and third-party defendants and to take 10 hours of legal ethics classes in a January 2016 order in which he slammed Brewer for using “an abusive litigation practice that harms the integrity of the justice system and the jury trial process” and for his nonchalant demeanor and evasive responses to questions during the sanctions hearings.  

Reyes sanctioned Brewer under his inherent judicial authority. He did not find Brewer had violated any attorney professional conduct rules.

After a state appellate court in Amarillo upheld Reyes’ order in March 2018, Brewer appealed to the Texas Supreme Court two months later.

The high court vacated the sanctions order Friday, with eight justices agreeing that Reyes had gone too far in hitting Brewer with monetary sanctions. Justice Jane Bland was not involved in the decision.

“We hold the sanctions order in this case cannot stand because evidence of bad faith is lacking. Even if the survey Brewer commissioned was not flawlessly designed or executed, the record bears no evidence that Brewer, individually or through his agents, developed or employed the survey for an improper purpose,” Justice Eva Guzman wrote in a 40-page opinion.

In a partial dissent, Justice Jeffrey Boyd complained the court was breaking new ground by holding that trial courts can only use their inherent authority to sanction an attorney if they first find the attorney acted in bad faith.

“Globally applying a bad-faith requirement to all inherent-authority sanctions for all sanctionable conduct unnecessarily handcuffs our state’s trial courts and undermines the very reason they possess inherent authority in the first place,” he wrote.

He said the majority should have upheld the sanction for Brewer to take 10 hours of ethics training classes.

The attorney for Teel’s parents, Ted Lyon of Dallas, said he believes the Texas Supreme Court, whose nine justices are all Republicans, made a political decision in vacating the sanctions.

“I think it’s a bad decision and I think it’s going to have far-reaching implications for Texas law. And I think we are going to be the only state in the nation that allows this kind of conduct to go on,” he said in a phone interview. “So I’m thoroughly disappointed in what the court did. I think what they did is they reached a political decision, not a legal decision.”

He said the justices went beyond the record to help Brewer.

“Brewer is the legal counsel for the NRA, which is very much in the camp of the Republican Party,” Lyon said.

Michael J. Collins, a partner at Brewer’s law firm Brewer Attorneys & Counselors, said, “The opinion validates what we have believed all along – that Bill and our law firm acted ethically at all times.”

Linda Eads, professor emerita at the Southern Methodist University Dedman School of Law, was Brewer’s co-counsel in his appeal to the Texas Supreme Court.

“This is an important victory for every lawyer in Texas. It provides protection from unreasonable sanctions imposed by a trial judge not based on facts and evidence,” she said in an emailed statement.

%d bloggers like this: