PAID. Jane Macon Arbitration Clauses in Employment Contracts Judge Sharon MacRae. November-December 2010 PRST STD T E X A S PERMIT 1001 US POSTAGE

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1 November-December 2010 Jane Macon Arbitration Clauses in Employment Contracts Judge Sharon MacRae PRST STD US POSTAGE PAID PERMIT 1001 SAN ANTONIO T E X A S

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3 November-December 10 6 Features Departments Jane Macon: You Don t Have to Call Me Darlin, Darlin By Steve A. Peirce Arbitration Clauses in Attorney-Client Contracts: Against Public Policy? By Barry H. Beer Judicial Profile Judge Sharon MacRae By Amanda Reimherr Buckert President s Page A Creed to Live By By Justice Phylis J. Speedlin Fourth Court Update Checklist to Success: Pleas to the Jurisdiction By Justice Rebecca Simmons Federal Court Update By Hon. Nancy Stein Nowak and Nissa M. Dunn 22 Letters to the Editor On the Cover: Fulbright & Jaworski L.L.P. attorney Jane Macon Photo by Janet Rogers Cover design by Hugh Leighton McWilliams Photography San Antonio Lawyer is an official publication of the San Antonio Bar Association. Send address changes to the Bar Association address above. Views expressed in San Antonio Lawyer are those of the authors and do not necessarily reflect the views of the San Antonio Bar Association. Publication of an advertisement does not imply endorsement of any product or service. Contributions to San Antonio Lawyer are welcome, but the right is reserved to select materials to be published. Please send all correspondence to Copyright 2010 San Antonio Bar Association. All rights reserved San Antonio Lawyer 3 November-December 2010

4 Lawyer San Antonio The San Antonio Bar Association 100 Dolorosa, San Antonio, Texas Fax: Officers/Directors President Justice Phylis J. Speedlin President-Elect Gary W. Hutton Vice President Andrew L. Kerr Secretary Justice Rebecca Simmons Treasurer Tom g. Keyser Immediate Past President Carl Robin Teague Directors Robert J. Barrera Robert Rusty Biechlin, Jr. Priscilla D. Camacho C. Lee Cusenbary Mexican American Bar Association Dayla Sarai Pepi Sara E. Dysart Annalyn G. Smith Beth Squires James M. Marty Truss San Antonio Bar Foundation Wade B. Shelton 19 th annual San Antonio Young Lawyers Association Priscilla D. Camacho Bexar County Women s Bar Association Christine E. Reinhard State Bar of Texas Directors Allan K. DuBois Victor H. Negrón Jr. Executive Director Jimmy Allison San Antonio Black Lawyers Association Sonja D. Sims Editors Editor in Chief Hon. Barbara Nellermoe Articles Editor Sara Murray Managing Editor Kim Palmer Departments Editor Leslie Sara Hyman November 20 Don t miss it! Register online at https://www.formstack.com/forms/redemptionrp-sabar2010 Board of Editors Hon. Barbara Hanson Nellermoe, Chair Pat H. Autry, Vice-Chair Sherry M. Barnash Donald S. Bayne Barry H. Beer Bridgett G. Braumbaugh Charles Butts Priscilla Camacho Rudy Castillo Gayla Corley Paul Curl Cristina Tijerina de Leon Antoinette Delgado Nancy L. Farrer Stephen H. Gordon Brian C. Hamilton Per Hardy Sam Houston Paul Robert Killen James H. Kizziar Rob Loree Ed Marvin Amy McLin Hugh McWilliams Curt Moy Steve Peirce Donald R. Philbin Rob Ramsey James Rodriguez Regina L. Stone-Harris Brent Sykora Katherine A. Tapley Johnny Thomas Elena Villasenor Nationwide Publishing SA 1922 Great Ridge, San Antonio, TX (210) Publisher - Ron L. Hogue Layout by Kim Palmer Managing Editor, San Antonio Bar Association Legal Media Production and Photography Preserve Your Memories! Transfer VHS to DVD $10 each with the mention of this ad San Antonio Lawyer 4 November-December 2010 Video Depositions/Forensic Videography High-Speed Synchronization Mediation Settlement Brochures Editing Linear & Non Linear Videography/Photography MPEG-1/CD/DVD Conversion Video Duplication Multi-Camera Video Shoots Court Playback Slides/Negatives/Prints Equipment Rental Available for Travel Proudly Serving Our Legal Community for Over 20 Years

5 A Creed to Live By By Justice Phylis J. Speedlin I love my dog dearly. Need I say more? Most of the time he is a bundle of black fur eager to greet me with loving glee whenever I return home or just re-enter the room! On occasion, however, he is a mischievous dynamo intent on one thing finding and devouring whatever food morsel has fallen to the floor or is otherwise within his reach. His single-minded zeal for food has even led him to jump upon our dining room table on a couple of occasions, to the horror of my friends. Although we can laugh at the uncivil antics of a dog, it is not quite as amusing when we humans display some of those same unflattering characteristics. As lawyers we have been taught to zealously represent our clients. Too frequently, however, that motto becomes a lawyer s single-minded focus to the exclusion of basic civility. As the Honorable Barbara Nellermoe, one of our District Court Judges, recently commented, Regrettably, trial judges observe unnecessarily uncooperative behavior among opposing counsel on a weekly basis. No doubt, the corrosive relationships are fed outside the courtroom by personality clashes, lack of trust in opposing counsel s sense of professionalism, and office management practices that tend to irritate the attorneys and staff who have to deal with it. Judge Nellermoe went on to suggest, In high-conflict family law cases, we have a valuable resource called Cooperative Parenting Counseling. I wonder whether we might develop a similar concept for irritating attorneys. Judge Nellermoe s proposed solution has merit. A simpler remedy, however, might be found if lawyers just remembered that in serving our clients, we also owe a broader duty to the legal system. The Texas Lawyer s Creed, promulgated by the Supreme Court of Texas and the Court of Criminal Appeals in 1989, provides the roadmap for any lawyer to attain the highest level of professionalism. The Lawyer s Creed acknowledges and affirms in its Preamble that professionalism surpasses mere rule compliance: I am committed to this creed for no other reason than it is right. The Lawyer s Creed is premised on four basic tenets. Lawyers owe a duty to: (1) the legal system; (2) their client; (3) other lawyers (yes, including opposing counsel); and (4) the court. The actual text of the creed includes a number of mandates, including the following gems to be emulated: I am passionately proud of my profession. Therefore, My word is my bond. I will advise my client of the contents of this creed when undertaking representation. I will advise my client that civility and courtesy are expected and are not a sign of weakness. I will advise my client that I reserve the right to determine whether to grant accommodations to opposing counsel in all matters that do not adversely affect my client s lawful objectives. A client has no right to instruct me to refuse reasonable requests made by other counsel. I will be courteous, civil, and prompt in oral and written communications. Lawyers and judges owe each other respect, diligence, candor, punctuality, and protection against unjust and improper criticism and attack. The Honorable District Court Judge Karen Pozza incorporates the Lawyer s Creed into her courtroom. I believe the Texas Lawyer s Creed answers every question a lawyer might have in his or her practice What should I do? How should I act in this situation? How should I interpret this rule of Civil Procedure? Each of these questions is answered in the Lawyer s Creed. Judge Pozza goes on to say, I have a copy of the Lawyer s Creed both in my office and on the bench. I read the Lawyer s Creed myself and encourage all attorneys to read and follow its simple principles. I sincerely believe most lawyers strive to do what is right. However, I also believe every lawyer can benefit from a gentle reminder now and then of the higher calling of our profession. In that regard, the San Antonio Bar Association has published the full text of The Texas Lawyer s Creed on its website for easy access. I encourage all lawyers to print and keep a copy handy. As set forth in the order adopting The Texas Lawyer s Creed, Let us now as a profession each rededicate ourselves to practice law so we can restore public confidence in our profession, faithfully serve our clients, and fulfill our responsibility to the legal system. Justice Phylis Speedlin is current President of the San Antonio Bar Association. She has served on the Fourth Court of Appeals since April Prior to that, Justice Speedlin served for three years as Bexar County district judge and practiced litigation for seventeen years with Clemens & Spencer. She is board certified by the Texas Board of Legal Specialization in personal injury law. President s Page San Antonio Lawyer 5 November-December 2010

6 Jane Macon: You Don t Have to Call Me Darlin, Darlin By Steve A. Peirce Jane Macon s ridiculous success can be distilled down to one word: Darlin. You scoff, but hear me out. Jane gets away with calling everyone from busboys to high-ranking elected officials darlin like Randy Jackson gets away with calling American Idol contestants dawg. The rest of us can t do that. It is this all-purpose word that allows Jane to seem to know everyone on a better-than-first-name basis, when she doesn t even know their first name. Whether working a room or working a deal, Jane shoots darlins and sweeties at her prey like so many of Cupid s arrows, and with equally charming effect. Jane, see, has the South Texas ranch cred, the cotton candy hair, the chic western wear and accoutrements from (I m guessing) the King Ranch Saddle Shop, and the persona that allows her to sound as natural as Nancy Hicks- Gribble southern-drawling terms of endearment. She even owns a bunch of little horses. More about that later. On the day of our interview, Jane and I are headed to Tommy Moore s for lunch. She parks on the surface lot across from our building because the parking garage where everyone else parks is too slow going for Jane. Jane manages to get more than 24 hours out of each day, as will be readily apparent, and this is one method of squeezing out some extra moments. I don t ask, but I m guessing the parking lot attendant is well compensated not to hassle her for any fees, coming or going. She shovels an armload of invitations and memorabilia out of the front seat of her SUV so I can sit. A badly worn cell phone is mounted in the car with a speaker attached. Jane takes a call from an elected official wanting to know if she knows another elected official. If you want to know if anyone knows anyone else in San Antonio, especially in politics, you call Ms. Macon. At Tommy Moore s, I can t even get started on the gall-danged interview for all the darlin s and sweeties that need to be greeted in the place, and even the people who don t know Jane look at her like they are supposed to know her: that blonde woman with the red-framed glasses must be somebody. But Jane is gracious and finally turns her focus to whistle-britches, and the story begins. Legend has it that Jane first appeared in the Kingsville sky riding on a giant catfish atop a dust devil, using rattlesnakes to lasso javelinas. In truth, she is from a wellrespected family. Her mother, Dr. Johnnie Mae Haun, was a professor and dean of education at Texas A&I University and also set up a school for the kids at the King Ranch. Her dad, Skeets Haun, owned the local hardware store, and her grandmother, Mae DeMauri, ran the King Ranch Linen store. Jane went to King High School and was in the Bramettes Pep Squad and the theatre group, and was a mighty fine defense lawyer in civics class mock trial. Jane was a whiz Jane and California Governor Arnold Schwarzenegger San Antonio Lawyer 6 November-December 2010

7 Jane with Governor Dolph Briscoe (top), with Prime Minister Margaret Thatcher (center), and with Hillary Rodham Clinton and Commissioner Paul Elizondo (bottom) at journalism. During the summers, she edited the Texas A&I newspaper and worked at the Kingsville Record. Jane attended the University of Texas in the mid 1960s, where she majored in international studies, minored in journalism, and missed the bullets of Charles Whitman because she was studying in Spain in the summer of At UT, she served as editorial page and features editor of The Daily Texan. After graduation, she enrolled at UT law school. At UT law, she met her future husband, Larry Macon (you ve heard of him he s a litigator who runs marathons and what-not). In law school, she was editor of the UT law yearbook. After law school, Jane and Larry went to Atlanta. She worked for the Federal Office of Economic Opportunity headed by one Donald Rumsfeld, where, among other things, she worked with Colonel Harlan Sanders on a Kentucky Fried Rabbit, an idea that is still (thankfully) way ahead of its time. She then clerked for Georgia State District Judge Luther Alverson for about a year. In 1972, Larry was hired by Cox & Smith, and the couple moved to San Antonio, where Jane joined the City Attorney s Office and handled federal litigation. In 1977, City Manager Tom Huebner proposed that Jane be appointed as the City Attorney. The appointment was highly contested during a 24-hour-long City Council meeting. In the end, Jane, at 29, became the youngest person, and the first woman, to serve as the City Attorney. She would hold that position for six years. Those were interesting times. While with the City, Jane represented the San Antonio Police Chief who had arrested a man for possession of a criminal instrument, that being the projector used for the showing of Deep Throat. Held: a projector cannot be a criminal instrument because it doesn t have to be used to show porno. 559 F.2d Good precedent for the next generation of computer users. In another case, Iranian students (protesting the Shah of Iran) and the Ku Klux Klan (protesting the protesters) both applied for competing demonstration permits. The City, fearing for the safety of the students, denied both permit requests and removed the students from the City Hall steps. The student protesters sued. The Texas Supreme Court held that the student protesters safety was not reason enough to deny them their application to exercise free speech. 615 S.W.2d 202. After serving as City Attorney, Jane came to work at Fulbright & Jaworski as a partner in Clients needing help with public and private partnerships that is, developments involving governmental participation make their first call to Jane. A cascade of calls to the usual darlin s ensues soon thereafter. She is currently working on developing a Texas A&M campus in San Antonio. Jane is particularly proud of having a hand in the realization of the East Side Sports Complex and the Frank Bryant Health Center, also on the East Side. It is tempting at this point to talk about some of Jane s honors, and I will because they are impressive, but I contend that it s the disarming D-word that sets her apart from all the other overachieving whirling dervishes in the legal field. At one time or another, Jane has been president of the International Women s Forum, the Women Lawyers of Texas, the San Antonio Young Lawyers Association, and the Southwestern Legal Foundation. She has been a director of the Women s Advocacy Board and the Texas City Attorney s Association. She has been a board member of the NOW Legal Defense Fund, Child Care Action Campaign, Center for Democracy, National Women s Political Caucus, National Nurses League, and National Civic League. She has been named Outstanding Lawyer of Texas and Outstanding Young Lawyer of San Antonio. She was a Bill Clinton appointee on the National Selective Service Appeal Board, and she continues to serve. Her firm bio says that she has limited language capabilities in French, Mandarin, Russian, and Spanish, meaning that she can at least say darlin in those tongues. And, if you ve been to any San Antonio Bar Association lunches, you know that Jane is the one responsible for getting all those big-shot speakers. She counts Kay Bailey Hutchinson (whom she s known since college) and Hillary Clinton among her friends. Jane Macon I d rather wear out than rust out. San Antonio Lawyer 7 November-December 2010

8 gets her calls returned, Darlin. In fact, as Charlie Deacon advises, If you are ever stuck anywhere in the world and can make only one phone call, it might help to have Jane s number in your wallet. Then there are the little horses. When you head up 281, around about Twin Sisters, you ll see Alamo Miniatures. That s Jane s deal. Jane raises miniature horses. A miniature horse cannot exceed 34 inches in height, measured from the last hairs of the mane. The breeds are Caspian Shetlands and Falabella. These tiny horses were once used in the coal mines as beasts of burden. They are sometimes used as guide animals for the blind; and then, of course, they have been used in the kiddie section at the carnivals. Jane just likes to show them to people. In particular, she shows them at American Miniature Horse Association competitions. Did I mention the memorabilia? In the car, yes, but that s the stuff that hasn t yet made it to the office. I can only surmise that people are constantly sending Jane mementos and thank-you gifts, and she keeps every one of them in her office. A sombrero from her friend of 30 years, famed ranchero singer Vicente Fernandez, etched with paintings by El Rey himself. Jane and actress/philanthropist Audrey Hepburn Photos with Arnold Schwarzenegger (she helped Arnold set up the After School All Stars Program in San Antonio) and David Robinson (everyone needs to have a picture with The Admiral). Several 8x10s that, from a distance, look like her UT classmate Farah Fawcett, but on closer Jane and actress/ philanthropist Helen Hayes inspection, are that of her mini-horses, with Farah-style manes flowing in the breeze. Eerie, I know. Jane counts among her mentors Lila Cockrell, Amy Freeman Lee, Sarah T. Hughes, Hermine Tabloski, Herb Kelleher, John Montford, and Lloyd Benson. I know this article sounds like it s all made-up, but I got this straight from the miniature horse s mouth, so don t question the equestrienne. Jane s motto is a quote from FDR: I d rather wear out than rust out. Jane s advice to young lawyers is, Show up early, stay late, be a selfstarter, take phone calls, return phone calls, and keep the door open for people to come behind you. As we leave the restaurant, Jane picks up a to-go order for a friend. Darlin, do you have time to swing by a nursing home so I can drop this off? There ya go. Steve A. Peirce is Senior Counsel in the San Antonio Office of Fulbright & Jaworski, L.L.P., where he practices business bankruptcy law. His favorite TV show is King of the Hill. him at fulbright.com, or call at Jane Macon is a Partner in the San Antonio Office of Fulbright & Jaworski L. L. P. her at or call at San Antonio Lawyer 8 November-December 2010

9 When I stepped up to Private Banking at Broadway Bank, I knew beyond a reasonable doubt they were in my court. Sara E. Dysart, Attorney at Law As an accomplished lawyer and native San Antonian, Sara E. Dysart climbed her own ladder to success. And when Sara needed a strong financial partner she could trust, she turned to Private Banking at Broadway Bank. Ten years later, Broadway Bank is still backing Sara s successful practice by providing a single point-of-contact service and timely responsiveness for money management, customized lending solutions, investment planning, and more. Sara believes in the power of concierge banking and even refers her clients to Broadway Bank and that s her best counsel. 38 Neighborhood Banking Centers broadwaybank.com Member FDIC PRIVATE BANKING CUSTOMIZED LENDING WEALTH MANAGEMENT

10 Arbitration Clauses in Attorney-Client Contracts: Against Public Policy? By Barry H. Beer Surprise! Arbitration Can Kill Malpractice Coverage 1 was the headline of the article ed among the members of the San Antonio Bar Association s Publications Committee. The opening salvo by the author read: It s ironic that many lawyers routinely put arbitration clauses in their engagement letters with clients. Here you have a profession that is quite literally the foot soldiers in the third branch of government, charged by our professional oath to be officers of the court. And yet, in contracts with clients, these attorneys opt out of the court system by obligating clients to take any dispute with them to arbitration. 2 Simply put, the author declared that lawyers don t trust the court system to treat them fairly. 3 This brief article warned of the possible denial of legal malpractice coverage if an attorney, without consent of the carrier, included arbitration clauses in fee contracts. But the real message of the article was clear--it is disdainful for lawyers to compel clients to use binding, private dispute resolution, rather than the judicial system, to resolve attorney-client disputes. The article ignited an immediate response from a well-known trial attorney: Some lawyers, arbitrators and even judges beat a drum on behalf of arbitration, instead of trial by jury or before a judge without a jury. These proponents of arbitration will try to convince you that arbitration is better than a jury or trial before a legitimate, sitting judge. They will tell you that arbitration is quicker, more fair and less expensive. Do not swallow that hook, line or sinker. 4 The veteran litigator closed his responsive with a stark warning: if mandatory arbitration continues at its ever-increasing rate, the jury trial will be tomorrow s dinosaur. 5 A proponent of alternative dispute resolution, an adjunct arbitration law professor, also weighed in. He stated the article sensationalized the issues and lacked data to support its hype, especially relating to lawyers distrusting the court system. Believing it would expedite the resolution of disputes, I included an arbitration clause in my firm s retainer agreements some months earlier. I now wondered whether that decision was in error. The possible effect on our malpractice coverage was not my overriding concern. Instead, I considered whether I was confirming the irony that lawyers, in increasing numbers, seem to be running for the protection of arbitration clauses in their engagement letters. 6 Was protection from presumed emotional jury bias ultimately acquired through self-interested and overreaching conduct? As someone had pointedly asked, why did I feel the need to include an arbitration clause in my contracts? So began my reflection, my deliberation, and my research. Having been a litigator for nearly three decades, and having represented clients before numerous juries, was it undeniably hypocritical to require clients to forego a jury and accept an arbitrator to decide any conflict between us? Was it ethical? And if so, was it still arguably unfair, even wrongful? Both the United States Supreme Court and the Texas Supreme Court are strongly San Antonio Lawyer 10 November-December 2010

11 in favor of enforcing arbitration clauses. My research also confirmed a strong sentiment in Texas to uphold arbitration clauses included in attorney-client contracts. One opinion that immediately drew my attention was the dissent in Henry v. Gonzalez, 7 where the Fourth Court of Appeals ordered the trial court to compel arbitration based on a provision in the attorney s fee contract. 8 Resisting arbitration, the client argued arbitration was unenforceable as against public policy because it denied his right to a jury trial. 9 The majority summarily dismissed the argument, finding it unfounded because well established case law favors mandatory arbitration and... does not deny parties their right to a jury trial, as a matter of law. 10 In dissent, Chief Justice Phil Hardberger took offense at the majority s off-hand dismissal, noting none of the majority s supporting citations involved an arbitration provision in an attorney-client agreement. 11 Chief Justice Hardberger, previously a prominent trial lawyer, declared that special public policy considerations are implicated when an attorney imposes an arbitration provision on his or her client. 12 He also noted that a number of articles had covered the legal and ethical implications of such a provision, and found the public policy of preventing attorneys from taking advantage of their clients clearly outweighs whatever public policy may be served by enforcing arbitration agreements. 13 Trust is the essential ingredient in an attorney-client relationship. The great majority of clients are not even close to being in an equal bargaining position with their attorneys. They go to an attorney so an attorney can tell them what to do not vice versa. 14 Chief Justice Hardberger further emphasized that the fundamental fiduciary nature of the attorney-client relationship dictates against imposing an arbitration clause on clients. The practical reality, he noted, is the lack of an arm s length transaction because [c]lients are often in vulnerable positions, requiring them to bestow a large amount of trust in their attorneys. He argued that a selfpolicing profession cannot justify allowing attorneys to take advantage of those who call upon their services and particularly noted that many clients may not be able to meet the burden of proving [traditional contract defenses like] unconscionability. 15 The overall message of the dissent was clear. Whether the client is an injured plaintiff, a spouse in the midst of a wrenching divorce or custody dispute, or a debtor on the brink of bankruptcy, the client is often so conflicted and eager to obtain counsel that concern over the existence of an arbitration provision is absent. There is, therefore, no attempt to negotiate its exclusion. Often unsophisticated and financially disadvantaged, the client consequently possesses unequal bargaining power. The embedded arbitration clause not only eliminates the opportunity for a jury trial should legal malpractice occur, but it also deprives the client of an advantage in negotiating with an attorney who seeks to avoid litigation and its potential negative publicity. 16 Further, the client is often left with a potentially prohibitive burden the proportionate obligation to pay what may be quite expensive arbitrator fees. At a time when arbitration clauses were only beginning to find their way into attorney-client contracts, Chief Justice Hardberger early recognized the need to restrict this type of arbitration provision. His argument that certain clients engage legal representation when they are in a true state of desperation 17 applied then, and it still applies now. Prior to Gonzalez, the only case involving a ruling on arbitration clauses in attorney fee contracts was Porter & Clemens, L.L.P. v. Stone, 18 in which the trial court s refusal to compel arbitration was reversed. 19 No public policy argument against enforcement of the provision was raised, and the court ultimately ruled the clause was enforceable under the Texas Arbitration Act (TAA). 20 Immediately after Gonzalez, the Thirteenth Court of Appeals, in In re Godt, 21 declared a legal malpractice claim is a personal injury claim under Texas law. 22 Pursuant to the TAA, arbitration agreements involving personal injury claims require each party to sign a written agreement on independent advice of counsel, with such counsel also signing the agreement See Randy Johnson, Surprise! Arbitration Can Kill Malpractice Coverage, The Litigation Section, Apr. 9, 2008, hot_topics_for_trial_lawyers/arbitration_can_kill_malpractice_coverage. 2 Id. 3 Id. 4 commentary by Charles D. Butts (on file with author). 5 Id. 6 Johnson, supra note 1. 7 Henry v. Gonzalez, 18 S.W.3d 684 (Tex. App.--San Antonio 2000, pet. dism d by agr.). 8 Id. at See id. at Id. (citing Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 268 (Tex. 1992); Fridl v. Cook, 908 S.W.2d. 507, 511 (Tex. App.--El Paso 1995, writ dis d w.o.j.); D. Wilson Const. Co., Inc.v. McAllen Ind. Sch. Dist., 848 S.W.2d 226, 231 (Tex.App.--Corpus Christi 1992, writ dis d w.o.j.). 11 Id. at 692 (Hardberger, C.J., dissenting). 12 Id. 13 Id. 14 Id. at Id. 16 Id. (citing Jean Fleming Powers, Ethical Implications of Attorneys Requiring Clients to Submit Malpractice Claims to ADR, 38 S. Tex. L. Rev. 625, 637 (1997) and Jack B. Anglin Co., 842 S.W.2d at 268.). 17 Id. at Porter & Clemens, L.L.P. v. Stone, 935 S.W.2d 217 (Tex. App.--Houston [1 st Dist.] 1996, no writ). 19 Id. at Id. 21 In re Godt, 28 S.W.3d 732 (Tex. App.--Corpus Christi 2000, no pet.). 22 Id. at 738 (quoting Sample v. Freeman, 873 S.W.2d 470, 476 (Tex. App.--Beaumont 1994, writ denied); Estate of Degley v. Vega, 797 S.W.2d 299, (Tex. App.--Corpus Christi 1990, no writ). 23 Id. at 739. (referencing Tex. Civ. Prac. & Rem. Code Ann (a)(3), (c) (Vernon Supp. 2000)). San Antonio Lawyer 11 November-December 2010

12 Because these statutory requisites were lacking, the court refused to enforce the provision between a law firm and its former client. 24 The client argued that the special role of attorneys within the legal system required heightened scrutiny of attorneyclient contracts and allowing mandatory arbitration provisions in these contracts ill served the public interest in protecting clients from attorneys overreaching and unfair treatment. 25 Without discussion of the Gonzalez dissent, the court simply stated, We need not address Godt s arguments that the agreement is unenforceable on public policy grounds, 26 having found a different path to reach the outcome urged by Chief Justice Hardberger in his Gonzalez dissent. Both cases involved clients injured in medical malpractice cases. No sister court since, however, has followed the Godt Court s analysis. In 2003, the Fourth Court of Appeals disagreed with In re Godt and held a legal malpractice claim is not an action for personal injury, governed by restrictions set out in the TAA. 27 In a footnote the court cited Gonzalez as support that the law favored mandatory arbitration. 28 Likewise, in Taylor v. Wilson, 29 the Fourteenth Court of Appeals enforced an attorney fee arbitration clause, determining the legal malpractice claim in the underlying securities case was not a personal injury claim under the TAA. 30 Both the majority and concurring opinions in Taylor spent much time analyzing the legislative history of the Texas Arbitration Act. Neither opinion, however, discussed whether the use of arbitration provisions in fee contracts should be scrutinized based on public policy grounds. In 2006, the Texas Supreme Court held a termination fee contract provision was contrary to public policy. In Hoover Slovacek L.L.P. v. Walton, 31 the court concluded the provision was unconscionable as a matter of law, and therefore, unenforceable. 32 Noting Texas hold[s] attorneys to the highest standards of ethical conduct 33 in client dealings, the court declared a lawyer s duty highest when contracting with a client or taking a position adverse to that client. 34 The court emphasized that a lawyer must be above reproach, always keeping in mind the client s best interest. As Justice Cardozo observed, [a fiduciary] is held to something stricter than the morals of the marketplace. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. 35 One year later, in Chambers v. O Quinn, 36 nearly 200 plaintiffs sued a prominent, personal injury trial attorney in connection with his representation and settlement of their toxic tort claims. The former-client Petitioners argued the trial court had erred in compelling arbitration because compulsory arbitration clauses in contingency fee personal injury case contracts were per se against public policy. 37 Citing Chief Justice Hardberger s public policy arguments, as well as the high court s own language from Slovcek, 38 the Petitioners reasoned that the attorneyclient relationship in personal injury cases is not akin to an ordinary commercial contractual relationship and, thus, is not subject to the same rules. 39 At the very least, Petitioners argued, this type of provision should not be enforced unless certain safeguards are observed. 40 These safeguards include full and complete disclosure of all terms and conditions, including advantages and disadvantages, of the arbitration, as well as requiring the client to receive advice of independent counsel who must sign off on the arbitration provision. 41 Further, since binding arbitration waives the clients constitutional right to trial by jury, the waiver must be intentional, voluntary, intelligently and knowingly given. 42 Finally, the clients asserted that the law firm violated Rule 1.08(g) of the Texas Disciplinary Rules of Professional Conduct by attempting to limit the firm s liability, as well as by not assuring that its clients were independently represented in regard to the arbitration agreement. 43 None of the clients arguments were discussed by the high court in O Quinn, however. Addressing the only issue presented on review, the Supreme Court reversed the court of appeals determination that it lacked jurisdiction to review an order compelling arbitration under the TAA and remanded for review on the merits. 44 The court did not seize the opportunity to reflect upon whether, under certain circumstances, an attorney requiring a binding arbitration provision may be taking a position adverse to his client s best interests and overreaching from an unequal bargaining position. Alternatively, the court could have indicated such public policy considerations were, at least, ripe for review. It chose not to do so. In 2008, the Fourth Court of Appeals upheld an arbitration award in favor of a law firm that sought to recover unpaid fees in a divorce and custody case. 45 Without 24 Id. 25 Id. at Id. at In re Hartigan, 107 S.W.3d 684, 690 (Tex. App.--San Antonio, 2003, no pet. h.). 28 Id. at 688 n1. 29 Taylor v. Wilson, 18 S.W.3d 627 (Tex. App.--Houston [14 th Dist.] 2005, pet. denied). 30 Id. at Hoover Slovacek L.L.P. v. Walton, 206 S.W.3d 557 (Tex. 2006). 32 Id. at Id. at 560 (quoting Lopez v. Muñoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 866 (Tex. 2000) (Gonzales, J., concurring and dissenting)). 34 Id. at Id. at Chambers v. O Quinn, 242 S.W.3d 30 (Tex. 2007). 37 Petitioner s Brief on the Merits at 19, Chambers v. O Quinn, 242 S.W.3d 30 (Tex. 2007), 2007 WL (Jun ). 38 Id. at Id. at Id. 41 Id. at Id. at 26 (quoting In re Prudential Ins. Co,148 S.W.3d 124, 132 (Tex. 2004)). 43 Id. at O Quinn, 242 S.W.3d at Lee v. Daniels & Daniels, 264 S.W.3d 273 (Tex. App.--San Antonio 2008). San Antonio Lawyer 12 November-December 2010

13 reference to Gonzales, the court agreed with appellants general assertion that because of the special professional relationship [between an attorney and his client], the contract must be fair, honest, reasonable, and made freely and voluntary by the client after complete disclosure of all contract details. 46 Approximately one decade after Chief Justice Hardberger called for some restrictions on attorney-client arbitration provisions, the State Bar of Texas Professional Ethics Committee issued Opinion Number The committee concluded that the disciplinary rules allowed the inclusion of an arbitration provision relating to fee disputes and malpractice claims provided two conditions are met. First, the client must have sufficient information to make an informed decision, including the significant advantages and disadvantages of arbitration ; and second, the provision may not limit the lawyer s malpractice liability. 48 Depending on the sophistication, education and experience of the client, sufficient information includes the potential time and cost savings of arbitration over judicial resolution; waiver of significant rights, such as the right to a jury trial; possible reduced level of discovery; relaxation of evidentiary rules; and a very limited right to a judicial appeal of the arbitration decision. 49 The committee further advised lawyers to consider advising clients of these additional matters, where appropriate: (1) the privacy of arbitration versus public trial; (2) arbitrator selection methods; and (3) any obligation the client may have to pay fees and costs of arbitration. 50 By simply applying the disciplinary rules, the Committee set out recommended guidelines which effectively place some restrictions on attorney-client arbitration clauses, without relying on a public policy argument. Thus far, only two decisions cite Ethics Opinion 586, both from the Fourteenth Court of Appeals. In Abdel Hakim Labid, M.D., Ph.D. v. Sydow, 51 the court summarily dismissed the client s public policy argument, stating that Texas public policy favors arbitration. 52 The appellate court noted that the Committee expressed no opinion regarding the enforcement of arbitration clauses, stating It is beyond the authority of this Committee [sic] to address questions of substantive law relating to the validity of arbitration clauses in agreements between lawyers and their clients. 53 The court found the client s argument meritless [b]ecause it is likewise beyond the authority of this court to disregard public policy [favoring arbitration] as articulated by the state and federal legislatures and high courts. 54 Recently, the Fourteenth Court of Appeals again supported enforcement of an arbitration clause in a fee contract. In In re Pham, 55 the court rejected the client s assertion that the attorney did not fully explain the terms of the arbitration clause, despite the requirements of Ethics Opinion In his dissent, Justice Seymore adopted Chief Justice Hardberger s special publicpolicy concerns 57 and expressed his belief that courts have an obligation to protect consumers of legal services from attorneys who take advantage of their clients. 58 Currently pending is proposed Rule 1.08(g)(2) of the Texas Disciplinary Rules of Professional Conduct, which seeks to apply at least some of the Ethics Opinion 586 proscriptions. The proposed rule, however, has been rightly criticized as being substantially deficient. 59 For instance, the proposed rule omits an Opinion 586 requirement that attorneys exclude clearly unfair terms. 60 Further, the proposed rule requires disclosure of only two of the eight factors identified in Opinion 586 as sufficient information necessary for the client to make an informed decision regarding binding arbitration. Although neither the United States Supreme Court nor the Texas Supreme Court has yet considered whether binding arbitration agreements in attorney-client contracts should be barred under any circumstances on public policy grounds, such a ruling is unlikely even one narrowly applied. Attorney-client contracts have generally received greater scrutiny due to their public policy effects; 61 however, this has not been the case where arbitration clauses were specifically challenged. And while Ethics Opinion 586 is non-binding, 62 it is more likely that any high court decision or future legislation will be supportive of the committee s recommendations favoring enforcement of arbitration provisions, as long as the lawyer complies with the enumerated disclosures urged by the committee. In the most recent Texas legislative session, attempts were made to curb arbitration. House Bill No sought, in part, to prohibit one party from requiring another party to agree to arbitration as a condition of a contract between them. 63 Senate Bill No. 222, pushing similar amendments to the Texas Arbitration Act, sought to make pre-dispute arbitration agreements and transactions unenforceable as between parties of unequal bargaining power. Both measures failed. The Senate found, in part, that a series of Texas Supreme Court decisions have changed the intention and meaning of the [Texas Arbitration] Act, ; few people realize that arbitration clauses - continued on page Id. at 279 (quoting Robinson v. Garcia, 804 S.W.2d 238, 251 (Tex. App.--Corpus Christi 1991, writ denied) (NYE, J., concurring)). 47 Tex. Comm. on Prof l Ethics Op. 586, 72 Tex. B.J. 128 (2009). 48 Id. at Id. 50 Id. 51 Labidi v. Sydow, 287 S.W.3d 922 (Tex. App.--Houston [14 th Dist.] 2009, orig. proceeding). 52 Id. at Id at Id.; see also Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 446 (2006) (arbitration agreement enforceability not contingent on public policy). 55 In re Pham, 314 S.W.3d 520 (Tex. App.--Houston [14 th Dist.] 2010, pet. filed). 56 Id. at Id. (Seymore, J., dissenting). 58 Id. at commentary by Amon Burton, Chuck Herring, and Jim McCormack (on file with author) 60 Tex. Comm. on Prof l Ethics Op. 586 supra note See Mark G. Anderson, Note, Arbitration Clauses in Retainer Agreements: A Lawyers License to Exploit the Client, 1992 J. Disp. Resol. 341, Tex. Gov t Code Ann (c). 63 Tex. H.B (d), 81 st Leg., R.S. (2009). San Antonio Lawyer 13 November-December 2010

14 Fourth Court Update Checklist to Success: Pleas to the Jurisdiction By Justice Rebecca Simmons Although pleas to the jurisdiction have been part of Texas jurisprudence since shortly after Texas became a state, the plea was seldom used. Perhaps that is why Texas Rule of Civil Procedure 85 is the only rule that even mentions the plea, and no procedure is associated with the plea. 1 Today the use of the plea to the jurisdiction has exploded: it has become the primary means of challenging a waiver of sovereign immunity in part because Legislative changes in 1997 permitted an interlocutory appeal from the disposition of a plea to the jurisdiction. Although the plea is in vogue, there are no procedural rules to assist counsel or the courts in resolving the plea. Given that a plea to the jurisdiction may be dispositive, it is important to anticipate the problems and issues that may arise when filing or responding to a plea to the jurisdiction. Below are some tips to consider before embarking on the unmarked road of the plea. 2 Read THE Case: Texas Department of Parks & Wildlife v. Miranda With the explosion in the use of the plea and no procedural rules, confusion reigned over the scope of review, the procedure before the trial court, and the ultimate disposition of the plea. In Tex. Dep t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004), the Supreme Court of Texas set forth the ground rules for the resolution of pleas to the jurisdiction. The trial court should determine subject-matter jurisdiction at its earliest opportunity. Id. at 226. If the plea challenges only the pleadings, the court reviews the pleadings to determine if the pleader has alleged facts that affirmatively demonstrate the court s jurisdiction. - The court liberally construes the pleadings. Id. at If the pleadings do not contain sufficient facts to affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency, and the court should give the plaintiff leave to amend to correct the deficiency. - If the pleadings affirmatively negate jurisdiction, then the court may grant a plea to the jurisdiction without providing an opportunity to amend. If the plea challenges the existence of jurisdictional facts then the court considers relevant evidence. - The trial court may grant additional time to obtain evidence for the hearing. Small, Jeff Ad 11/26/07 7:00 PM Page 1 - As in summary judgment practice, the trial court reviews the evidence to determine if a fact issue exists. If a fact issue is created, the trial court cannot grant the plea and the issue will be resolved by the fact finder. - If the relevant evidence is undisputed or fails to raise a fact question, the trial court rules on the issue as a matter of law. Id. at 228. An appellate court reviews a challenge to subject matter jurisdiction de novo. It takes as true all evidence favorable to the non-movant and indulges every reasonable inference and resolves any doubts in the non-movant s favor. Id. at Prepare the Motion or Response If the plea challenges the pleadings, the respondent may amend her pleadings before the hearing. The court may reset the hearing as necessary. See Haddix v. Am. Zurich Ins. Co., 253 S.W.3d 339 (Tex. App. Eastland 2008, no pet.). If the plea is based on evidence, the hearing may become more complicated. - Parties may submit evidence the day of the hearing. Try reaching an agreement with opposing counsel to exchange evidence before the hearing to avoid surprise. - Evidence is not limited to the type permitted under the Summary Judgment Rule 166a. Conversely, there is no rule, as in summary judgment or special appearance practice, that permits the admission of affidavits that would otherwise be objectionable as hearsay. - Live testimony is permitted at the hearing. See Pickett v. Tex. Mut. Ins. Co., 239 S.W.3d 826, (Tex. App. Austin 2007, no pet.). Law Office of Jeff Small Appeals Briefed/Argued Error Preservation Dispositive Motions Original Proceedings Jury Charges Research Flexible Arrangements (Hourly, Contingency, Flat Fee) Not certified by the Texas Board of Legal Specialization Civil Appeals Litigation Support Appellate Mediation f: San Antonio Lawyer 14 November-December 2010

15 - A party may need to move for additional time to conduct further discovery. - Evidence not submitted to the trial court will not be considered on appeal. Hendee v. Dewhurst, 228 S.W.3d 354 (Tex. App. Austin 2007, pet. denied). A plea to the jurisdiction can be and is often based on both the pleadings and the facts. There is no deadline to challenge subject-matter jurisdiction. Tex. Ass n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, (Tex. 1993). Set the Hearing The three-day notice-of-hearing provision in Texas Rule of Civil Procedure 21 applies. At least one appellate court has held that a trial court s determination of a jurisdictional issue implicating the merits at a preliminary stage of development is an abuse of discretion. Davis v. Burnam, 137 S.W.3d 325, (Tex. App. Austin 2004, no pet.). Respondent should seek a continuance if necessary. The trial court has discretion to permit parties additional time to conduct discovery and prepare a response. At the Hearing Request a record. Live testimony and documents may be offered to support or respond to a plea that is based on evidence. Refer to Miranda standards set forth above for trial court s review. If necessary, request an opportunity to amend the pleadings to cure any deficiency determined by the court. The Disposition Because the trial court should not make fact determinations at the hearing, a request for findings of fact and conclusions of law may not be useful. See Goldberg v. Comm n for Lawyer Discipline, 265 S.W.3d 568 (Tex. App. Houston [1 st Dist.] 2008, no pet.). If the plea to the jurisdiction is based on sovereign immunity, the disposition is dismissal with prejudice. Harris County v. Sykes, 136 S.W.3d 635 (Tex. 2004). If the plea to the jurisdiction does not involve sovereign immunity, but, for example, standing or mootness, the correct disposition is dismissal without prejudice. Id. at 639; see Daimler Chrysler Corp. v. Inman, 252 S.W.3d 299, 304 (Tex. 2008). Conclusion Pleas to the jurisdiction have been dusted off and reinvented as motions to dismiss for lack of jurisdiction. Instead of pursuing sovereign immunity claims through summary judgment, more governmental entities are pursuing pleas to the jurisdiction. Unlike summary judgment, few procedural safeguards are in place to prevent an unwarranted dismissal with prejudice. Currently the Rules Committee of the State Bar of Texas is reviewing potential new rules that would provide needed safeguards and guidance to practitioners and the courts. Thus, when faced with filing or responding to a plea to the jurisdiction, you must prepare adequately or risk your case. Justice Rebecca Simmons has served on the Fourth Court of Appeals since May Prior to that, Justice Simmons served for two years as a Bexar County district judge and practiced trial and appellate law for 20 years. She has served as an adjunct professor at St. Mary s School of Law for over 10 years. 1 Pleas to the jurisdiction are often contained in motions to dismiss for lack of jurisdiction. Pickett v. Tex. Mut. Ins. Co., 239 S.W.3d 826 (Tex. App. Austin 2007, no pet.). 2 For more detail, see Rebecca Simmons & Suzette Kinder Patton, Plea to the Jurisdiction: Defining the Undefined, 40 St. Mary s L.J. 627 (2009). San Antonio Lawyer 15 November-December 2010

16 Judge Sharon MacRae By Amanda Reimherr Buckert She is noticeably humble and decidedly modest. She is calm and serene and exudes kindness. She admits that she is shy and would prefer to talk about others rather than herself. However, Judge Sharon MacRae s peers and colleagues not only sing her praises and wax poetic about her integrity, good character, and remarkable knowledge of the law they also call her the best judge in Bexar County. United States District Judge Edward Prado said her reputation is uncompromised. Judge Raymond Angelini said he can t think of a better judge on the bench. Bexar County District Attorney Judge Susan Reed calls her fabulous and an ethical pillar. Simply, I do not know a judge, or anyone for that matter, that I would rate higher in any category than Sharon MacRae, said Judge Michael Peden as he sat up in his chair and sharply poked his desk for emphasis. It is an honor to call her friend. Judge MacRae has presided in the 290 th Criminal District Court since her appointment to the bench by Governor William Bill Clements in February of She was born in Ohio, but grew up in Waco. The jurist received her bachelor s degree from the University of Colorado at Boulder and graduated from the University of Virginia Law School in MacRae said she had never thought of going to law school, but an assignment from an English professor during her senior year of college planted the seed. We had to take an old saying or common wisdom and make an argument about it. I chose the saying You can t legislate morality and argued, Oh yes you can! The professor liked it and Judges David Berchelmann, Sharon MacRae and Michael Peden share a laugh at MacRae and Peden s swearing in ceremony, February San Antonio Lawyer 16 November-December 2010

17 suggested that I should think about law school, she said. MacRae let that seed germinate and grow, and eventually she decided to help it flourish. She vividly recalls an unpleasant incident that could have discouraged many from continuing their educational pursuits, but she contends that it shaped her career in the law and empowered her to move forward. When I first went to law school, there were only a handful of women, she said and then paused for a moment as she looked at the neatly framed photos on her office shelves, some of which include her fellow female judges. It was my second day in law school when a professor said, I see we have several women in class, and I have always believed that the only position for a woman in the law is prone. MacRae then stopped, turned her head as she folded her hands and took a deep breath. I was horrified, and nobody said a single word, she said. The jurist said that decades later she is still in disbelief at the episode and is angry at herself for not standing up and saying anything at the time. She emphasized that this did not deter her, but rather motivated her and drove her to succeed. I wanted to tell that man that there are other positions for women in the law, and now I have proved it with my career, she said. Despite her motivation to show what women could accomplish in the law, MacRae said she was discouraged when she began to look for a job after law school. I could not find a job, she said plainly. Federal Judge Sara Tilghman Hughes (who famously swore in Lyndon B. Johnson as President on Air Force One after John F. Kennedy was assassinated) was a friend of someone my mother knew. We met and she gave me a little pep talk. She told me a story about how firms would not even look at her resume. She was disheartened and eventually took a job for an attorney who told her if she typed his papers during the day then when she was finished she could meet with her clients there in the evening. MacRae said she realized that if the road to Hughes great success started with such humble beginnings, then she should not be discouraged. [Hughes] helped pave the way for me, and I want Judge MacRae with nephew Travis MacRae at his graduation from James Madison University. Travis received his JD from Penn State, and is now an attorney in Virginia. to keep paving that trail for others. Now I am excited to say we live in a time when a law class is comprised of 50% or more women, she said. MacRae credits her parents, who are now deceased, as being a huge influence on her. I read Nancy Drew books and decided I wanted to be a detective. A school counselor told me I could not do that, but my dad said it was ridiculous and that a woman could do whatever she put her mind to do, she said. I looked up to my mother. She was a teacher, but very into politics. She ran for school board and won many times. It was a desire to come back home to Texas and a job with the Bexar County District Attorney s office that brought Judge MacRae to San Antonio, and at that time, there were only three women in the DA s office. I guess you could call us trailblazers, she said with a demure reticence. MacRae worked her way up through the DA s office and experienced many successes in each role. She did everything from collecting child support and taking citizens complaints about a neighbor s yard, to consoling women who came in after being beaten by their boyfriends or husbands. MacRae eventually became a prosecutor in County Court before earning her groundbreaking seat as the first woman to be named chief prosecutor in a Bexar County felony court. I was very nervous, but also very proud of my first case as a first chair felony prosecutor. So very proud, she said. Since that first case, she said she has seen many positive changes to our judicial system. The one thing that has really changed for the better is how sexual assault cases are handled. When I first started prosecuting these cases in the 1970s, you could ask a woman about her sexual history and raise consent as a defense, she said. The woman would become a target and not want to come in and be subjected to that preposterous nonsense. It was a terrible time to be a victim. After ten years in the DA s office, MacRae and her colleague Raymond Angelini decided to go into private practice, opening the doors to Angelini & MacRae and practicing together for six years. She calls the experience a revelation. We had never managed an office or met a payroll and other things we had never even thought about. Suffice it to say it was rough going at first, she said with a soft chuckle. Angelini concurred that the first year was difficult. We didn t make a dime the first year, but I learned so much from her, and our firm was successful, he said. We prosecuted a bunch of cases together in the DA s office; played the good guy, bad guy role together really well; and became equally good defense partners together. Now we re colleagues again, and I honestly can t think of a better judge. San Antonio Lawyer 17 November-December 2010

18 MacRae jokes that if she didn t have to collect money from clients, then she would have enjoyed private practice much more, but eventually felt led to seeking a seat on the bench. Secretly, in the back of my mind, I always wanted to be a judge, but I never though it would happen. When people started to call me and express an interest in my pursuing that, I thought it was my chance, she said. Being a judge is a wonderful thing, but it is really scary because you always want to do the right thing. Sometimes that is very obvious, but many times it really is not. You have to give everyone a chance to develop their arguments, and then you have to decide. It is hard because the buck stops with you, and it is people s lives you are dealing with. Sending a person to prison is not an easy thing to do, but being a judge is the best thing I have ever done in my life. MacRae said the greatest satisfaction of the job is when a jury decides in a way that is commensurate with the evidence, because it just makes you feel good that justice has been served. In contrast, she said the hardest part is hearing cases in which children have been victimized. Whether they are sexually or physically abused, those cases are always hard to hear; but they deserve justice, she said. Her advice to others looking to become a judge is that they should have experience with both sides of a case. It will make you a better judge if you know what it feels like to both defend and prosecute someone; but if you want to be a civil judge, well then I have no clue, she said with a big laugh. MacRae said she likes to stay busy and has about cases set on her weekly docket. She is reluctant to describe her judicial style, but she said she takes pride in being firm but fair and always demands that people come prepared. Reed said MacRae has the best run criminal docket and views her longtime friend as a person of the highest Judge MacRae and the staff of the 290 th Criminal District Court integrity. She is undoubtedly the most competent judge and a hard worker. I was just looking at pending cases in the criminal courts, and she has the lowest number. She is still working that hard knowing she is retiring and has 1,000 less pending cases than the highest on the list, Reed said. That says so much about her, and she really gives the taxpayers their money s worth. In her free time, MacRae enjoys playing with her greyhound, Zeda, and tending to her salt water fish tanks and decorative plant garden. She enjoys going to movies and absolutely loves to read; James Lee Burk is her favorite author. She is close with her family and enjoys spending time with them, especially her sister with whom she is very close. When MacRae retires at the end of this year, she hopes to put her undergraduate degree in French to good use and travel to Paris. When she comes back from her travels to other fantastic destinations on her retirement to-do list, she plans to return to her passion and serve as a visiting judge. MacRae also said that she loves to garden and looks forward to devoting more time to the native Texas plants that have become her favorites. Also looking forward to his retirement, Peden fondly recalls when he and MacRae were sworn in together at the same ceremony in May of We will now go out together and retire at the same time. It was a privilege to once be her second chair because she is without a doubt the best prosecutor I ever worked with, he said. She not only knew the law inside and out, but she really could also relate to the victims pain and wanted them to walk away after their day in court having faith in the justice system. When it comes to criminal questions, Sharon is on my speed dial. Prado said he is always impressed with MacRae s knowledge of the law and is proud to say he followed her up the chain at the DA s office by taking the spots she would vacate when she was promoted. I have a great deal of respect for her, and when she retires, it is going to be impossible to replace the institutional knowledge that she has about how the criminal process functions in the state of Texas, he said. MacRae takes all of the compliments in stride and says that it has actually been her privilege to work with all of her colleagues, but it has been a special honor to work for the people of this community. Amanda Reimherr Buckert, a former journalist with the San Antonio Express- News, is the Coordinator of SABA s Community Justice Program. San Antonio Lawyer 18 November-December 2010

19 Arbitration Clauses in Attorney-Client Contracts - continued from page 13 - waive certain constitutional rights; and mandatory arbitration undermines civil and consumer rights law development because there is no meaningful judicial review of arbitrators decisions....[thus] arbitrators enjoy near-complete freedom to ignore the law. The Senate concluded that too many [courts] have upheld even egregiously unfair mandatory arbitration clauses in deference to a supposed federal or state policy favoring arbitration over the constitutional rights of individuals. 64 Both the United States Senate (S. 931) and House of Representatives (H.R. 1020) considered the Arbitration Fairness Act of The bills are nearly identical, attempting to bar enforcement of predispute arbitration agreements related to employment, consumer, franchise, or civil rights disputes. 66 Previously, the Arbitration Fairness Act of 2007 similarly sought to bar arbitration clauses in disputes where the parties are of unequal bargaining power. 67 Both bills failed. Presently, S. 931 is held up in committee, while H.R was discharged in June. The majority of jurisdictions follow some version of the Texas approach, enforcing attorney-client arbitration provisions only as long as full disclosure is made and/or independent counsel is retained to review the provision. 68 Thus far, Ohio stands alone in its restrictive view. In Opinion 96-9, the Ohio Board of Commissioners on Grievances and Discipline concluded an attorney s engagement contract should not contain a provision requiring an unsophisticated client to submit all future fee disputes, malpractice claims, or professional ethical misconduct disputes to arbitration. 69 As one commentator has opined, Ohio does not entirely forbid arbitration of fee disputes when a client is unsophisticated; it merely restricts the ability to agree to arbitration before a dispute exists. The commentator finds the approach paternalistic, but prudent in light of due process implications and the fiduciary nature of the attorney-client relationship. In adopting this bright-line rule, the Ohio Board advocates an approach that best protects the unsophisticated client by recognizing that the predispute agreement will invariably lead to decisions by clients that are neither fully informed nor voluntary. 70 Even if the opinions of the Ohio Board or Chief Justice Hardberger are never fully embraced by this state s Supreme Court or legislature, all practitioners should consider the following questions and concerns, in light of Ethics Opinions 586: 1) How does one define a typical client and terms in arbitration clauses which are not unfair to such a client? 2) What litmus test verifies that a client has been made aware of significant disadvantages? Will there be a full and frank discussion, for example, that loss of the ability to pursue the claim in court may cause the client loss of a bargaining advantage otherwise realized through negotiating with an attorney who seeks to avoid litigation and its potential negative publicity? 3) Even after recommended disclosures, are not most clients who lack sophistication or who are distressed over their current legal predicament still unable to truly understand the effects of arbitration? 4) Should attorneys be required to provide to prospective clients a written pamphlet discussing the eight enumerated disclosures recommended by the committee? 5) For personal injury clients, are the added protections in the TAA no longer applicable? 6) Do such arbitration agreements, in fact, prospectively limit the lawyer s liability to a client for malpractice, especially when it can be reasonably anticipated that clients cannot afford the high costs of arbitration? 7) Should lawyers, who pledged to have their clients claims presented to a jury of their peers, deny such opportunity in the face of a malpractice claim? 8) Does arbitration unfairly provide the attorney with an advantageous review of a malpractice claim, particularly since the arbitrator may be one of his peers or potentially even a retired judge before whom the attorney has previously practiced? 9) Is an arbitration clause in an attorney-client contract really, as one court claims, no more than a pre-dispute agreement by which the parties merely substitute one forum for another? 71 10) Is it likely a prospective client will spend the time or money with independent counsel to review an embedded arbitration clause prior to signing an engagement letter? And what message does it send to the prospective client, and the public at large, when a client is required to hire a lawyer to hire a lawyer? 11) Is arbitration of legal malpractice claims against the public interest because such disputes are resolved away from public scrutiny? 12) Are such mandatory arbitration provisions serving to further erode the jury trial system? 13) Finally, will an increased - continued on page Tex. S.B (b)-(d), (f), 81 st Leg., R.S. (2009). 65 S. 931, 111 th Cong. (2009); H.R. 1020, 111 th Cong. (2009). 66 S (a); H.R (b). 67 S (b), 110th Cong., (2007); H.R (b), 110th Cong., (2007). 68 See Anderson, supra note Ohio Bd of Comm rs on Grievances & Discipline, Formal Op (1996). 70 See Matthew J. Clark, The Legal and Ethical Implications of Pre-Dispute Agreements Between Attorneys and Clients to Arbitrate Fee Disputes, 84 Iowa L. Rev. 827, 863 (1999). 71 See McGuire, Cornwell, & Blakey v. Grider, 765 F. Supp. 1048, 1051 (D. Colo. 1991) (finding provisions at issue merely shift determination of the malpractice claim to a different forum ). San Antonio Lawyer 19 November-December 2010

20 Federal Court Update By the Honorable Nancy Stein Nowak and Nissa M. Dunn Judge Nowak s summaries of significant decisions rendered by San Antonio federal judges from 1998 to the present are available for keyword searching at Court Web found at gov/courtweb/. Full text images of most of these orders can also be accessed through Court Web. If you are aware of a Western District of Texas order that you believe would be of interest to the local bar and should be summarized in this column, please contact Nissa Dunn by phone at or by at with the style and cause number of the case, and the entry date and docket number of the order. Service of Process Becknell v. Long Term Disability Plan, SA- 10-CA-155-XR (Rodriguez, July 12, 2010) ERISA complaint was filed in February 2010 without service on defendants. Although the court found that plaintiff had failed to show good cause for failing to timely serve defendants, it was unable to determine whether the disability plan at issue established a shorter limitations period than that provided by Texas statute and therefore exercised discretion to allow plaintiff additional time to effect service. Employment; First Amendment Elizondo v. Parks, SA 04 CA 1025-FB (Biery, July 12, 2010) After remand from the Fifth Circuit, court dismissed plaintiff s First Amendment retaliation claims and granted summary judgment holding that plaintiff s speech, which occurred in the context of plaintiff s employment and official duties, was not afforded constitutional protection. Court denied motion to remand, finding that where plaintiff s petition was silent as to the amount of damages sought, the amount in controversy included attorneys fees for claims brought under the Texas Labor Code, and that plaintiff s affidavit in which he attempted to limit his recovery to $75,000 was filed post-removal and therefore had no effect on determination of the motion to remand. Bankruptcy; Attorneys Fees In re Zars, SA-09-CA-661-XR (Rodriquez, July 27, 2010) Order to pay debtor s attorneys fees incurred in connection with a prior bankruptcy case from funds available from more recent bankruptcy case and giving priority to that fee award over claims of other general creditors, reversed. Court rejected claim of appellant (State Comptroller) that attorney fee application was not sufficiently detailed to permit the Bankruptcy Judge s specific fee determination. Insurance Middleman Construction Co., LLC v. West American Ins. Co. & Ohio Casualty Ins. Co., SA 08 CA 509-OG (Garcia, March 26, 2010). Court granted insurer s motion for summary judgment, finding that insured s contractual obligation to finish a construction project, pursuant to its agreement with the property owner, was not the same as being legally obligated to pay damages a requirement for coverage under the commercial umbrella policy. Costs; Attorneys Fees Nilesh Enterprises v. Lawyers Title Insurance Corp., SA-08-CA-661-XR (Rodriguez, July 1, 2010) Prevailing party s request for costs of computer-assisted demonstrative aid denied as non-recoverable (28 USC 1920); service costs allowed up to the amount provided for service by the US Marshal ($55); copying costs denied where applicant failed to establish the necessity of the copies; witness costs approved to the extent substantiated; attorneys fee of 40% of recovery awarded after consideration of Johnson factors. Bankruptcy In re Salas, 5:09-BK (Clark, July 14, 2010) Motion by debtor to file reaffirmation agreement with creditor on debtor s vehicle after date of discharge. Court was unable to determine if the reaffirmation agreement was executed postdischarge and therefore futile, or whether the new agreement would pose an undue hardship on debtor, requiring a hearing on the motion. Civil Rights Kinnison v. City of San Antonio, SA-08- CA-421-XR (Rodriguez, July 21, 2010) Plaintiff complained that City unconstitutionally demolished his unsecured, vacant property without notice. Court granted summary judgment for plaintiff on his Fifth Amendment/Taking, procedural due process, and Fourth Amendment (seizure of property) claims. All other claims dismissed. Plaintiff s late filed designation of expert witness on damages stricken. Removal; Amount in Controversy Chavez v. Maximus, S-10-CA-538-XR (Rodriguez, July 23, 2010) Amendments Viper Telecom, Inc. v. Lockheed Martin Corp., SA-10-CA-375-XR (Rodriguez, July 30, 2010) Motion to dismiss denied and leave to amend granted where court found that proposed amended complaint asserted claims for breach of contract and quantum meruit that were not futile. After examining the elements of the claims in the proposed amendment, court was unable to determine as a matter of law that the statute of frauds applied to the subject oral agreement so as to bar the attempted amendment, and held that quantum meruit claim could be pled in the alternative. IRS Valero Energy Corp. v. US, SA-06-CV XR (Rodriguez, August 5, 2010) Court entered judgment with costs for United States in IRS summons enforcement proceeding, finding that the US was the prevailing party, that petitioner had not demonstrated that it had complied with prior enforcement orders, and that withdrawing objections to summons after court had rejected those objections did not San Antonio Lawyer 20 November-December 2010

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