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Texas Court of Appeals for the Fifth District (Dallas)

The Texas Court of Appeals for the Fifth District (otherwise known as the Fifth Court) has maintained its plaintiff-friendly reputation in the state due to a series of liability expanding decisions and the court’s failure to adhere to Texas Supreme Court precedent. In 2023, the Texas Supreme Court reversed the Fifth Court in two cases with significant civil justice implications, with more liability-expanding rulings to be heard on appeal in the coming months.

While, fortunately, the state’s high court has been willing to address these erroneous decisions in the past, the Fifth Court’s repeated history of mistakes has the practical effect of imposing unnecessary delays and costs for litigants.

The Fifth Court is located in Dallas, Texas and has jurisdiction over appeals arising from Dallas County Court as well as five other surrounding counties. The court is comprised of 13 justices, including the Chief Justice, who are elected to six-year terms.

Plaintiff Friendly Ruling in Products Liability Case

The Fifth Court has shown a propensity to expand liability in seemingly straightforward cases and these decisions invariably benefit plaintiffs. One such example is the court’s ruling in Parks v. Ford Motor Company. In this case, Ford sought to dismiss a products liability action that had been brought outside the state’s statute of repose, which requires actions of this kind to be brought within 15 years of the product’s sale. Ford defined the date of “sale” as the day the vehicle was released to the dealership which, in this case, fell outside the statutory period. This argument prevailed in a 2021 case before the U.S. Court of Appeals for the Fifth Circuit in a case that arose under similar circumstances.

The Fifth Court disagreed, finding the factual record unclear as to whether a vehicle is “sold” when it is released to the dealership or when final payment from the dealership is received by the manufacturer. Even though the title to the vehicle transferred on the day the vehicle was released, the Court determined that Ford was required to provide evidence that full payment was received outside the statutory period to dismiss the suit.

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 fifteen 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. A statute of repose eliminates the threat of never-ending liability for manufacturers of products that may be used for many years. The Firth Court’s strained interpretation of the time of sale detracts from the statute of repose’s usefulness as a resource for manufacturers to dispense with cases like these without engaging in costly trials.

Fifth Court Affirms Outrageous Trial Court Discovery Orders

An important function of appellate courts is correcting trial court errors, particularly when the error threatens to release a litigant’s confidential information. In In re Lyft, a group of plaintiffs sought to obtain Lyft’s excess insurance policies in discovery, which are contracts containing highly valuable proprietary information. As a result, the parties agreed to a protective order allowing the plaintiffs to access the documents provided they maintain their confidentiality. However, after receiving the materials, one of the plaintiffs petitioned the trial court to remove the protective order, claiming he could “put the policies on CNN.” Amazingly, the trial court agreed.

On appeal, the Fifth Court affirmed the trial court’s ruling without providing its reasoning. Lyft has appealed to the Supreme Court of Texas to prevent this order from being enforced.

Instances like these are not uncommon for the Fifth Court. Just weeks later, the Fifth Court summarily affirmed a series of trial court discovery rulings, again without any reasoning provided. In an insurance dispute, the plaintiff sought to compel the deposition of a corporative representative and an insurance claims adjuster. They challenged it on the ground that their testimony would be unnecessary and wasteful, given that they had already stipulated to various factual questions about the policy in dispute. The trial court disagreed, ordering the deposition to take place, while denying the defendant access to relevant medical records. The Texas Supreme Court granted an emergency stay in the proceedings until it is able to weigh in.

Decisions like these which survive on appeal encourage parties to engage in similarly abusive discovery practices.

The Texas Supreme Court granted another emergency stay in a case arising from the Fifth Court involving whether a trial court erred in barring a defendant’s motion to amend its filings. In this case, a business owner was sued for the purported negligence of its employee, who was alleged to have been within the scope of his employment when he was involved in a vehicle collision with the plaintiff. After initially admitting through discovery that the employee was acting within the scope of his employment, the owner later learned that the employee was engaged in unlawful racing at the time of the accident and sought to amend his admission. The trial court denied the motion, leaving the defendant unable to make its most compelling defense. The Fifth Court denied the defendant’s petition for relief, despite precedent from the Texas Supreme Court holding that amendments like these should be granted absent a showing of bad faith or undue prejudice.

Court’s Errors Continue to be Highlighted by State Supreme Court

Fifth Court ruling on noneconomic damage award unanimously reversed on appeal

The Fifth Court’s reputation for violating established precedent is second to none in the state of Texas. In June, the Texas Supreme Court reversed a Fifth Court decision involving a $15 million award of noneco- nomic damages in a wrongful death action.

On appeal to the Fifth Court, the defendant argued that Texas law requires a plaintiff to show evidence both of the existence of noneconomic damages and evidence supporting the particular amount requested. The defendant cited Texas Supreme Court precedent, yet the Fifth Court was unpersuaded. Instead of following the more exacting standard of review, the Court utilized a “shocks the conscience” standard to uphold the nuclear award despite the plaintiff having introduced no evidence supporting the amount requested at trial.

In his dissent, Justice David Schenck emphasized the inconsistency with this ruling and Texas Supreme Court precedent. In his view, the majority conflated the distinction between the existence of the injury and its quantification and, in doing so, failed to conduct a meaningful review of the jury’s award. The opinion further noted the importance of having meaningful appellate review of noneconomic damage awards, stating that the failure to do so results in arbitrary judgments, raising serious due process concerns.

The Texas Supreme Court agreed with Justice Schenck’s reasoning, finding that the Fifth Court failed to adhere to the standard of review it had prescribed in prior cases. The Supreme Court noted that noneco- nomic damages, while often difficult to calculate, are still intended to be compensatory in nature, and must therefore, be reasonable and supported by evidence. It concluded that the “shocks the conscience” standard applied by the Fifth Court is “vague and subjective” and that “it is error to allow a verdict to stand when no rational basis for the verdict’s amount is proffered.”

State Supreme Court Reverses Fifth Court’s Pain and Suffering Damage Award

In United Rentals North America v. Evans, the defendants challenged a trial court’s $5 million dollar pain- and-suffering award. Under Texas’s survival law, a person’s family can recover for a person’s losses prior to death, including conscious pain and suffering. An accident reconstruction and medical expert witnesses testified that there was no way of determining whether a driver died instantaneously when a bridge beam suddenly collapsed on his vehicle or was aware of what had occurred, even if only for a fraction of a second. Yet, despite this inconclusive testimony from the plaintiff’s own expert witnesses, the Fifth Court stated that a “lack of direct evidence on this issue does not preclude a jury from reasonably inferring” that the plaintiff consciously suffered pain and suffering from the injury.

In a unanimous opinion, the Texas Supreme Court reversed, finding that the evidence in support of the pain and suffering damages was legally insufficient. The high court reasoned that “if there is no evidence one way or another,” any jury award “could only have been based on speculation, not evidence.”

Key Case to Watch

The Texas Supreme Court is reviewing a case appealed from the Fifth Court with significant implications for products liability actions in the state, American Honda Motor Co. v. Milburn. In that case, a plaintiff received a $26 million verdict against the automaker. The plaintiff prevailed on a design defect theory despite there being a statutory presumption that products that meet federal safety standards are not defective. Honda appealed, arguing that the plaintiff’s expert witness failed to rebut this presumption because the expert did not address whether the applicable regulations were inadequate to promote public safety, as the statute requires. Nevertheless, the Fifth Court affirmed the jury’s verdict.

The Texas Supreme Court agreed to review the case in June. It’s a much-needed opportunity to clarify this statute’s application, which is intended to ensure that a product’s compliance with government safety standards aligns with product liability determinations. As an amicus brief observes, the Fifth Court’s decision “threatens to render this important liability protection meaningless.” The Court should find that a plaintiff “must do more than merely second-guess the relevant federal safety standards” to rebut the presumption of nonliability.