Texas Supreme Court Nixes Minority Shareholder Oppression Claims
Hawkins Parnell & Young won a landmark case in the Supreme Court of Texas that changed the landscape of shareholder oppression law in the State of Texas. After more than 50 years of silence on shareholder oppression claims, the Texas Supreme Court issued a 54 page opinion rejecting such claims except to the extent they seek the limited statutory remedy of a rehabilitative receivership. The Court expressly rejected the existence of a non-statutory, court-created claim for oppression in which shareholders claiming to be oppressed can force the corporation to buy the shareholder’s stock. This decision aligned Texas with Delaware, which does not recognize shareholder oppression claims. The decision also made it more difficult for a minority shareholder seeking the statutory remedy of a rehabilitative receivership to establish that the majority shareholders have committed oppression. Shareholder oppression claims had been increasing in recent years, and Texas attorneys and closely-held corporations closely monitored this case. The decision is a significant victory for closely-held corporations and their controlling shareholders. Robert Gilbreath represented the defendants in Ritchie v. Rupe, briefing and arguing the case in the Texas Supreme Court.
Client Prevails in Criminal Contempt Case in the Supreme Court of Texas
A Dallas trial court held another firm's client in contempt for lying during his deposition in a civil case and threw him jail. The firm turned to Hawkins Parnell & Young’s appellate specialist Robert Gilbreath for help, who was able to quickly get the client released from jail with an emergency petition for writ of habeas corpus to Texas's Fifth Court of Appeals. The court of appeals later determined it did not have habeas corpus jurisdiction, and the client was returned to jail. Hawkins Parnell then sought habeas relief in Texas's Court of Criminal Appeals, which decided that even though it had jurisdiction, the matter should be decided by the Texas Supreme Court instead. The Texas Supreme Court does not have habeas jurisdiction under these circumstances, so mandamus relief was sought instead. The Supreme Court freed the client pending its decision, and subsequently granted the petition for writ of mandamus. Creating new law, the Supreme Court held that a party cannot be held in contempt for perjury during a deposition unless the perjury prevents the trial court from performing its duties. Another novel aspect of the Supreme Court's ruling was its conclusion that it could exercise its mandamus jurisdiction even though it does not have habeas jurisdiction in this sort of case. The case received significant media coverage.
Delaware Supreme Court Affirms Summary Judgment for Reichhold
Hawkins Parnell & Young argued before the Delaware Supreme Court on behalf of Reichhold Incorporated, one of the world’s largest suppliers of resin products. The plaintiff claimed that his cancer was caused in part by exposure to asbestos-containing resins allegedly supplied by Reichhold to an Iowa manufacturing facility where the plaintiff worked. Reichhold’s summary judgment proof showed it supplied a miniscule portion of the resins used by the facility and that the plaintiff’s job duties did not bring him into sufficient contact with respirable asbestos released from Reichhold’s resins. The plaintiff appealed the summary judgment, asserting that co-worker testimony raised a fact question concerning the plaintiff’s alleged exposure to asbestos from Reichhold products. The Delaware Supreme Court affirmed the summary judgment. Robert Gilbreath argued the case to the Delaware Supreme Court.
Louisiana Court of Appeals Sets Aside Trial Court Order in Chemical Fumes Exposure Case
Hawkins Parnell & Young secured vacatur of Louisiana court order purporting to certify a class of potentially hundreds of persons who worked in the City Hall Annex in New Orleans. In the released opinion, the Louisiana Court of Appeals agreed that the trial court had not properly defined the purported class in this “sick building” case. The plaintiffs claim that release of chemical fumes over a period of many years caused them to suffer various ailments. Hawkins Parnell's client, NID Corporation, and the other defendants, Pan American Life (former owner of the building) and the City of New Orleans argued, among other things, that the trial court failed to certify a proper class. The court of appeals did not reach the defendants’ other arguments asserting that the case is not proper for class certification in the first instance. Hawkins Parnell partner Robert Gilbreath briefed the case and argued it for NID Corporation.