On Thursday, January 15, 2015, the Supreme Court of Texas heard arguments in the following cases:
No. 14-0122, Life Partners Inc. v. Arnold and No. 14-0226, Life Partners Holdings, Inc. v. State- The primary issue in these two cases (consolidated for oral argument) is whether "life settlement" transactions facilitated by the Life Partners entities are "securities" under the Texas Securities Act. The Life Partners entities describe "life settlement" transactions as "the sale of an existing life-insurance policy to another party. ... By selling the policy, the policyholder receives an immediate cash payment. ... The purchaser takes an ownership interest in the policy at a discount to its face value and receives the death benefit under the policy when the insured dies." In a prior case, the Waco Court of Appeals held that these transactions are not securities. In these two cases that Dallas Court of Appeals and the Austin Court of Appeals have held that they are. A secondary issue is whether any decision in these cases that the transactions are securities should be prospective only because the Life Partners entities relied on the prior decision from the Waco court that they were not securities.
No. 14-0465, McGinnes Industrial Management Corp. v. The Phoenix Insurance Co. - The Fifth Circuit certified a question regarding insurance coverage. The issue is whether certain actions by the EPA constitute a "suit" within the meaning of McGinnes's commercial general liability policy. The EPA sent McGinnes a letter giving notice that McGinnes was a "potentially responsible party" under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The EPA sent additional communications, including a request that McGinnes make an offer to settle the issues. Finally, the EPA sent a "unilateral administrative order" requiring McGinnes to undertake a Remedial Investigation and Feasibility Study.
The recordings of the arguments are available here.
- Rich Phillips, Thompson & Knight