Texas Supreme Court Orders and Opinion (5/23/14)

By Rich Phillips
Thompson & Knight
May 23, 2014

In its order list this morning, the Supreme Court of Texas issued one opinion. The Court did not grant review in any new cases. Access the complete order list here.

The Court issued its opinion in No. 12-0789, Tenaska Energy, Inc. v. Ponderosa Pine Energy,LLC. This appeal arises from an arbitration award, and is interesting because the Court vacated the award and ordered a new arbitration, a fairly uncommon occurrence. The petitioner argued that the award should be reversed for evident partiality of an arbitrator, because a "neutral arbitrator" did not disclose the extent of his contacts with the firm representing the opposing party. There was a partial disclosure, but the petitioner argued that it was incomplete and misleading. In a unanimous opinion by Justice Guzman, the Court found that there was evidence of evident partiality because the arbitrator failed to make a full disclosure. The Court applied its holding from Northern Railroad Co. v. TUCO Inc., 960 S.W.2d 629, 636 (Tex. 1997), that "evident partiality is established from the nondisclosure itself, regardless of whether the nondisclosed information necessarily establishes partiality or bias." The Court found that the undisclosed information was sufficient to create, in an objective observer, "a reasonable impression of the arbitrator’s partiality." The Court also rejected the respondent's argument that the petitioner waived any complaint. The Court reiterated its standard that a party cannot waive a complaint about partiality "by proceeding to arbitration based upon information it was unaware of at that time." Access the complete opinion here.

As we approach the Court's summer break, we expect that the number of opinions issued each Friday will increase. Note also that the Court will be holding conference each Monday in June, which increases the likelihood of opinions being issued each of those Fridays.

- Rich Phillips, Thompson & Knight