Civil Litigation

Both the Constitution of the United States and the Texas Constitution guarantee the right to a trial by jury in certain cases.

Article 5, section 10 of the Texas Constitution provides:

In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury; but no jury shall be empaneled in any civil case unless demanded by a party to the case, and a jury fee be paid by the party demanding a jury, for such sum, and with such exceptions as may be prescribed by the Legislature.

The Seventh Amendment to the United States Constitution provides:

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

A plaintiff begins a civil lawsuit in Texas district or county court by filing a petition with the court clerk.  When filing the petition, the plaintiff typically requests that the clerk issue a citation to each defendant named in the petition.

After the court issues the citation, the plaintiff serves each defendant with process by serving each defendant with a copy of the petition and the citation directed to that defendant. The plaintiff must properly serve process to enable the court to exercise personal jurisdiction over the defendant.

The most common alternative dispute resolution processes are:

• Mediation
• Arbitration
• Neutral evaluation
• Settlement conferences

Service of process is “the formal delivery of a writ, summons, or other legal process or notice.”

A litigation hold is an instruction within an organization directing employees to preserve records and information that may be relevant to the subject matter of a pending or anticipated lawsuit or investigation.  A litigation hold is designed to ensure that a company fulfills its duty to preserve relevant information when they reasonably anticipate a lawsuit or an investigation

Voir dire is the process of questioning potential jurors to determine who will actually serve on the jury.

Discovery is the process through which the parties exchange factual information and evidence related to the case. Discovery includes requests for documents, requesst that the other side answer interrogatories, depositions, and requests for admission.

E-discovery (or electronic discovery) describes the discovery of electronically stored information (ESI) in litigation.

In a summary judgment motion a party presents material facts that are not in dispute, either because the parties agree on those facts or because application of the law to the facts dictates a particular result. A motion for summary judgment will be granted if there is “no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law.”

Rule 38, Fed. R. Civ. P., recognizes the Seventh Amendment right to trial by jury, and provides for demand of jury; but, failing such a demand, jury trial is waived.

Section 1404(a) of Title 28 provides that: “for the convenience of parties and witnesses, in the interest of justice, a district may transfer any civil action to any other district where it might have been brought.”

Any party, including plaintiff, may move for a transfer under 28 U.S.C. § 1404(a). A party may move for transfer, even if it has waived any objection to venue. The court may also transfer an action sua sponte. While 28 U.S.C. § 1404(a) contains no time limit for the filing of a motion, the motion may be denied if the passage of time or any delay causes undue prejudice or is considered dilatory. The moving party has the burden of proof, and must make a convincing showing of the right to transfer.

The power of the court to transfer is limited to those districts or divisions where the case “might have been brought.” 28 U.S.C. § 1404(a).

The term ESI generally encompasses any information stored in an electronic medium and retrievable in a usable form. Texas court rules refer to ESI as “electronic or magnetic data” (Tex. R. Civ. P. 196.4).

Some obvious forms of ESI include emails and email attachments, Microsoft Excel spreadsheets, information stored in databases, and word processing documents such as those created in Microsoft Word. However, there are many other types of ESI that may be less obvious.

Title 28 U.S.C. § 2201, allowing the issuance of declaratory judgments in cases with the courts’ jurisdiction, is procedural and restricted to “cases” and “controversies” in the constitutional sense. It is not available for the resolution of hypothetical, academic, or theoretical problems, as federal courts do not render advisory opinions.

A preliminary injunction is an extraordinary and drastic remedy. No injunction will issue if there is an adequate remedy at law. Irreparable injury is an essential prerequisite to the issuance of a preliminary injunction. The injury alleged must be immediate and non-speculative.

No action lies against the United States unless Congress has authorized it.

The terms of a statute waiving immunity from suit define the court’s jurisdiction to entertain suit, and the consent is no broader than the limitations which condition it.

Texas courts generally apply the discovery rule in causes of action where the nature of the injury is inherently undiscoverable and the evidence of the injury is objectively verifiable. The discovery rule defers the accrual of a cause of action until either:

• The plaintiff discovers the injury or
• The plaintiff should have discovered the injury through the exercise of reasonable diligence.

The rule may be subject to the continuing tort rule and the doctrine of fraudulent concealment.

A fiduciary is a person or entity that stands in a particular position of trust and responsibility to another. A fiduciary has a legal duty to the fiduciary’s principal or beneficiary.  This fiduciary duty describes an obligation to act in the interest of the principal or beneficiary.  It represents the highest standard of care imposed by the law.

In Texas, a fiduciary’s duties are generally described as the following: a duty of loyalty, a duty of care, a duty of obedience, and a duty of good faith and fair dealing.

• Duty of Loyalty. Under the duty of loyalty, the fiduciary must act in good faith and not allow personal interests to prevail over corporate or other interests.
• Duty of Care. Under the duty of care, the fiduciary must perform his duties with the care that an ordinarily prudent person would use under similar circumstances.  The duty of care requires diligence and prudence in managing the corporations’ or others’ affairs.
• Duty of Obedience. The duty of obedience requires a director or officer to avoid ultra vires actions.
• Duty of Good Faith. The duty of “good faith and fair dealing” is one of many duties that fiduciaries owe to each other.  The duty of good faith and fair dealing requires parties to deal fairly with one another. As a fiduciary duty, it requires a party to place the interest of the other party before his own.

A claim for breach of fiduciary duty under Texas law requires the plaintiff to plead the following elements: (1) the existence of a fiduciary duty, (2) breach of the duty, (3) causation, and (4) damages.

The business judgment rule may protect a director from liability arising from a claim of breach of the duty of care. Courts generally do not intervene in management decisions made by the board of directors because courts are reluctant to substitute their business judgment for the directors’ judgment or question business decisions with the benefit of hindsight.

Although the business judgment rule is described as a defense to a breach of fiduciary duty claim, it is a substantive rule requiring the plaintiff to plead and prove that the director’s conduct is outside of the rule’s protection.

Under the business judgment rule, a director acting in good faith is not liable for mistakes in business judgment that damage the corporation’s interests. The rule protects directors from liability for actions within the honest exercise of a director’s business judgment and discretion, even if the actions are negligent, unwise, inexpedient, or imprudent. In Sneed v. Webre, the Texas Supreme Court noted that the business judgment rule protects directors from liability for actions within the honest exercise of a director’s business judgment and discretion, even if the actions are negligent.