TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-17-00811-CV
Appellant, Harris County Hospital District // Cross-Appellants, Public Utility Commission of Texas and Southwestern Bell Telephone Company d/b/a AT&T Texas
v.
Appellees, Public Utility Commission of Texas and Southwestern Bell Telephone Company d/b/a AT&T Texas // Cross-Appellee, Harris County Hospital District
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT NO. D-1-GN-15-005808, HONORABLE SCOTT H. JENKINS, JUDGE PRESIDING
OPINION
This is a suit for judicial review pursuant to the Administrative Procedure Act, Tex.
Gov’t Code §§ 2001.001–.902. The Harris County Hospital District filed a complaint with the
Public Utility Commission (PUC) contesting certain fees Southwestern Bell Telephone Company
charged its telecommunications customers in the 1990s. Southwestern Bell’s successor in interest,
AT&T, contends the fee dispute was resolved by a class-action settlement in 2000. The PUC
ultimately dismissed the complaint, holding the Hospital District’s claims barred by res judicata due
to the class-action settlement. The district court reversed that order, holding that the Hospital
District is not bound by the settlement because it was not represented in that action in accordance
with Section 281.056(b-1) of the Health and Safety Code, which requires a county or district attorney
to represent certain hospital districts “in all legal matters.” See Tex. Health & Safety Code § 281.056(b-1)(2) (requiring such representation in any county “with population of 3.4 million or
more”). We agree with AT&T and the PUC that the Hospital District is bound by the disputed
settlement decree. We will therefore reverse the district court’s order and render judgment
dismissing the case. See Tex. R. App. P. 43.2 (requiring this court to render the judgment the trial
court should have rendered).
I BACKGROUND
Telecommunications utilities in Texas may charge customers a fee to recover certain
costs resulting from use of public rights of way. These “municipal fees” are governed by Section
54.206 of the Utilities Code, which allows the utility “to collect a fee that a municipality imposes
. . . through a pro rata charge to the customers [with]in the boundaries of the municipality.” Tex.
Util. Code § 54.206(b). For more than two decades, customers have alleged that Southwestern Bell
imposed excessive municipal fees throughout the 1990s, resulting in several lawsuits. Four are
relevant here.
The Mirales Settlement
Litigation commenced in 1998 in Cameron County when two residential customers
sued Southwestern Bell and alleged the utility had been charging excessive municipal fees since
October of 1991. The parties ultimately negotiated a cy pres class-action settlement—now known
as the Mirales Settlement—to resolve all related claims in Texas. The proposed settlement defined
the putative class as:
2 [A]ll persons and entities who currently reside in the State of Texas who subscribe, or formerly subscribed, to telephone service provided by [Southwestern Bell] and pay, or paid, to [Southwestern Bell] a municipal fee imposed pursuant to a municipal ordinance, other than an ordinance based on a percentage of gross receipts, and collected pursuant to a tariff or statute.
That definition excluded certain customers not relevant here, including employees of Southwestern
Bell and the district court.
The proposed settlement, once accepted by the district court, would prohibit any class
member from pursuing any claim arising from Southwestern Bell’s collection of these allegedly
excessive fees:
“Released Claims” means any and all claims, rights, causes of action, suits, matters, issues, controversies, or other bases for liability, whether known or unknown, that have been, could have been, or that might be asserted hereafter in the Lawsuit or in any other court or administrative or regulatory proceeding . . . which have arisen, arise now, or hereafter may arise or relate in any way to the pass-through or collection of municipal fees in Texas, including all causes of action that are or could be raised under Plaintiffs’ pleadings on file herein or that consumers or customers could raise in relation to Southwestern Bell’s pass-through of municipal fees.
It continues, “Any member of the Settlement Class who has not properly and timely requested
exclusion from the Settlement Class shall be bound by any and all judgments, settlements, or releases
entered or approved by the Court whether favorable or unfavorable to the class.” See Tex. R. Civ.
P. 42(c)(2)(B)(v) (establishing putative class member’s right to opt out of class).
After allowing the parties time to notify putative class members of the proposed
settlement, the district court held two hearings on the fairness of the proposed certification and
settlement. At the first hearing, certain commercial customers objected to the putative class as too
3 variant to satisfy the commonality requirement of certification. See id. R. 42(b)(3) (requiring
common questions of law and fact to “predominate” over any individual questions). This challenge
was led by Southwestern Tariff Analyst (STA), a telecommunications billing auditor that had
attempted to intervene as named plaintiff but whose petition in intervention had been stricken on
Southwestern Bell’s motion.
The district court continued the hearing to afford Southwestern Bell time to address
the objections to certification. The hearing resumed a week later, and the reporter’s record reflects
that STA offered to withdraw its objections and waive any right to appeal the intervention ruling if
Southwestern Bell would preserve STA’s right to bring a separate class action on behalf of
governmental and commercial customers. Southwestern Bell declined to change the class definition
but agreed not to raise res judicata or related defenses “in any class action lawsuit brought by STA
as plaintiff.” The agreement was memorialized under Rule 11 and dictated into the reporter’s record.
The district court then certified the class and accepted the settlement proposal. On
May 4, 2000, the court’s final judgment “grant[ed] final approval to the Settlement Agreement” and
deemed it “in all respects, fair, reasonable, adequate, and in the best interests of the Settlement
Class.” The judgment indicates that all objections were “carefully considered and [were] all
overruled.” The district court later issued a judgment nunc pro tunc to correct certain typographical
and clerical errors in the final judgment.
The STA Suit
After the Mirales Class settled its claims, STA filed a class action in 2003, proposing
to represent nearly 7,000 governmental and commercial customers with respect to any remaining
4 claims arising from the same allegedly excessive fees. See Southwestern Bell Tel. Co. v. Marketing
on Hold, Inc., 308 S.W.3d 909, 914 (Tex. 2010) (STA). The Hospital District was identified by the
class representative and separately by Southwestern Bell as one of these putative class members, but
no attorney other than class counsel appeared on behalf of the Hospital District.
The district court eventually certified the class and the court of appeals affirmed, but
the Supreme Court of Texas reversed, holding that STA—as the only named plaintiff—had not met
its burden to show it could adequately represent the class. See Tex. R. Civ. P. 42(a) (requiring, inter
alia, a showing that “the representative parties will fairly and adequately protect the interests
of the class”); STA, 308 S.W.3d at 27 (“Although STA satisfied the typicality and
predominance requirements to be a class representative . . . it failed to establish that it is an adequate
class representative.”).
The Harris County Suit
A series of mergers left AT&T as successor in interest to Southwestern Bell’s liability
arising from this fee dispute. Shortly after the Supreme Court of Texas overruled certification of the
STA class in 2010, the Hospital District sued AT&T in Harris County district court, reiterating the
statutory challenge to the same fees litigated in Mirales and STA. The Hospital District conceded
the similarity of the allegations but argued its claims were “carved out” of the released claims by the
Rule 11 agreement and thus that it is not bound by the Mirales Settlement. The district court did not
reach that argument, instead accepting AT&T’s response that the claims arise from a fee dispute that
falls within the PUC’s exclusive jurisdiction. See Tex. Util. Code §§ 17.157, 52.002, 54.206. It
dismissed any “claims that seek[] reimbursement of municipal charges under tariff,” and abated the
5 remaining “claims for additional damages based on Gross Negligence, Fraud and/or the Texas
Deceptive Trade Practices Act” pending the PUC’s resolution of the fee dispute. The Hospital
District apparently did not file an appeal or seek mandamus relief from the dismissal or abatement.
The PUC Complaint
The Hospital District submitted its fee complaint to the PUC in March of 2012.
AT&T responded with a motion to dismiss and a motion for summary decision characterizing the
Hospital District’s allegations as injusticiable due to the Mirales Settlement and the doctrine of res
judicata. See Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 450 (Tex. 2007) (“Basic
principles of res judicata apply to class actions just as they do to any other form of litigation.” (citing
Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 377–79 (1996); Cooper v. Federal Reserve
Bank, 467 U.S. 867, 87 (1984); Southwestern Ref. Co. v. Bernal, 22 S.W.3d 425, 432 (Tex. 2000))).
The PUC referred the question of justiciability to an administrative law judge (ALJ) at SOAH. The
ALJ denied the motion to dismiss and the motion for summary decision.
After more than three years of litigation over the complaint filed at the PUC, the ALJ
rendered a proposal for decision recommending dismissal of the matter. He explained, “Under the
doctrine of res judicata, all of the claims asserted by [the Hospital District] in this proceeding are
barred by the Mirales Final Judgment approving the Mirales Class Action Settlement.” The PUC
subsequently adopted the proposal for decision, including its finding of facts and conclusions of law,
and issued an order dismissing the Hospital District’s complaint.
The Hospital District sought judicial review in December of 2015, naming the PUC
as defendant. AT&T later intervened in the case. As the primary basis for its challenge to the PUC’s
6 order, the Hospital District argued that it could not have been a member of the Mirales Class because
Section 281.056 of the Health and Safety Code—as it existed at the time—provided, “The county
attorney, district attorney, or criminal district attorney, as appropriate, with the duty to represent the
county in civil matters[,] shall represent the district in all legal matters.” See Tex. Health & Safety
Code § 281.056(b) (West 1998). It is undisputed that no such attorney appeared or filed pleadings
on behalf of the District during the Mirales litigation. The district court ultimately reversed the
PUC’s final order:
As a matter of law, pursuant to Section 281.056, Texas Health & Safety Code, [the Hospital District] must be represented by the county attorney unless its board opts to retain outside counsel. No such counsel represented [the Hospital District] in the Mirales lawsuit. As a legislatively-created governmental entity[,] [the Hospital District] cannot be part of or bound by a class[-] action lawsuit unless it takes such action to participate in the lawsuit. Consequently, as a matter of law, [the Hospital District’s] claims were not resolved by the Mirales lawsuit nor resolved by its final judgment.
All three parties filed timely appeal.
II DISCUSSION
The parties raise three issues on appeal. First, the Hospital District contends the
district court should have held the 20-year-old Mirales Settlement void because the released claims
arise from a fee dispute that falls within the exclusive jurisdiction of the PUC. Second, the PUC and
AT&T contends the district court erred by reversing the PUC’s order and holding the Hospital
District not bound by the Settlement’s release. Third, the Hospital District contends that, even
assuming the Mirales Settlement is not void and the Mirales Class can be construed to include the
7 Hospital District such that its claims would otherwise be barred by release or res judicata, AT&T
should be judicially estopped from urging this Court to include the Hospital District in that class.
We address these arguments in turn.
A. The Hospital District Cannot Prevail on Its Collateral Challenge.
The Hospital District contends the Travis County district court erred by failing to hold
the Mirales Settlement void. In support, the Hospital District argues that the Harris County district
court correctly held the fee dispute within the PUC’s exclusive jurisdiction and thus that the
Cameron County district court could not have had jurisdiction over the same fee dispute during the
Mirales litigation. According to the Hospital District, without jurisdiction over the subject matter,
the Cameron County district court could not have certified the class and accepted the settlement. We
review this challenge de novo. See Gauci v. Gauci, 471 S.W.3d 899, 901 (Tex. App.—Houston [1st
Dist.] 2015, no pet.) (citing Tex. Natural Res. Conservation Comm’n v. IT–Davy, 74 S.W.3d 849,
855 (Tex. 2002)).
We begin by noting that this is not a jurisdictional challenge raised on direct appeal.
Instead, the Hospital District collaterally challenges a twenty-year-old class-action settlement decree
resolving tens of thousands of claims filed over two decades ago. Courts generally will not entertain
collateral challenges to final orders, as the law favors finality and certainty. See Browning
v. Prostok, 165 S.W.3d 336, 345 (Tex. 2005) (citing Tice v. City of Pasadena, 767 S.W.2d 700, 703
(Tex. 1989); Crouch v. McGaw, 138 S.W.2d 94, 96 (Tex. 1940)). However, collateral challenge is
proper if the disputed judgment is allegedly void. See Browning v. Placke, 698 S.W.2d 362, 363
(Tex. 1985) (per curiam) (orig. proceeding). A judgment is void only if “the court rendering
8 judgment had no jurisdiction of the parties or property, no jurisdiction of the subject matter, no
jurisdiction to enter the particular judgment, or no capacity to act.” PNS Stores, Inc., 379 S.W.3d 267,
272 (Tex. 2012) (citing Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 863 (Tex. 2010)).
As the Supreme Court of Texas recently noted, “the traditional doctrine was that a
judgment of a court shown to have lacked subject matter jurisdiction was void” such that no further
inquiry was necessary to resolve the collateral challenge. Engelman Irrigation Dist. v. Shields Bros.,
Inc., 514 S.W.3d 746, 752 (Tex. 2017) (quoting Restatement (Second) of Judgments § 12 cmts. a, b
(Am. Law. Inst. 1982)) (internal quotation marks omitted). However, the Restatement adopts a
“‘modern rule on conclusiveness of determinations of subject matter jurisdiction . . . giv[ing] finality
substantially greater weight.’” Id. The Engelman Court made these observations while considering
whether to hold a twenty-year-old judgment void based on retroactive application of more recent
precedent on sovereign immunity—a doctrine well established as implicating jurisdiction over
subject matter. Id. at 748. After explaining that the modern approach would bar this attempted
collateral challenge due to the need for finality in the dispute, the Court ultimately rejected the
plaintiff’s argument and declined to recognize retroactive application of new precedent as a basis for
collateral challenge. Id. at 755.
Although the Engelman Court did not rest its holding on Section 12 of the
Restatement of Judgments, it acknowledged the modern trend favoring finality and certainty. See
id. at 750. This approach requires the reviewing court to weigh any factors militating for and against
upholding the validity of the challenged judgment. See Restatement (Second) of Judgments § 12
(Am. Law. Inst. 1982). These factors may vary in any given case, but include the age of the disputed
9 judgment, the number of parties affected by that judgment, the breadth of the original tribunal’s
jurisdiction, the extent to which that tribunal made a jurisdictional determination, and the
challenger’s participation in the litigation that resulted in the disputed judgment. See id. In the
present case, every relevant factor weighs in favor of finality—“an anchoring principle of any
functioning and efficient judicial system.” See Engelman, 514 S.W.3d at 753. The challenged
judgment is nearly two decades old, binds tens of thousands of class members, was rendered by a
court of general jurisdiction, and includes a statement indicating that the court found jurisdiction
over “all claims” and “all parties.”
But perhaps more importantly, the Hospital District—as party to this litigation—has
had ample opportunity to litigate its jurisdictional challenge. “A party that has an opportunity to
litigate the question of subject matter jurisdiction may not at a later time reopen that question in a
collateral attack upon an adverse judgment.” Bass v. Champion Int’l Corp., 787 S.W.2d 208, 212
(Tex. App.—Beaumont 1990, no writ) (citing Chicot Cty. Drainage Dist. v. Baxter State Bank,
308 U.S. 371 (1940)); see also Insurance Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee,
456 U.S. 694, 702 n.9 (1982) (“A party that has had an opportunity to litigate the question of
subject-matter jurisdiction may not, however, reopen that question in a collateral attack upon an
adverse judgment.”); Kortebein v. American Mut. Life Ins. Co., 49 S.W.3d 79, 88 (Tex.
App.—Austin 2001, pet. denied) (“Absent class members’ due-process right to adequate
representation is protected by the adoption of appropriate procedures by the certifying court and by
appeal . . . . Due process does not require collateral second-guessing of those determinations and
that review.”). After reviewing the record, the PUC concluded Southwestern Bell’s customers
10 received adequate notice of the Mirales litigation in 2000, and the Hospital District does not deny
it received that notice. See Tex. R. App. P. 38.1(g). The Hospital District could have raised this
argument at that time. In addition, the Hospital District concedes its membership in the putative STA
class, whose named representative sought relief from the same disputed fees in district court. And
although the Supreme Court ultimately deemed that class uncertifiable in 2010, the Hospital District
could have raised this argument before that determination. Because the relevant facts and
circumstances of this case—including the Hospital District’s opportunity to litigate this jurisdictional
challenge in Mirales and STA—weigh in favor of finality, we reject its present challenge to the
Mirales Final Judgment. We overrule the Hospital District’s first issue.
B. The Hospital District Is Bound by Mirales.
The crux of this dispute is whether the PUC correctly held that the Mirales Class
includes the Hospital District or the district court correctly reversed that holding. AT&T contends
the PUC “correctly found [the Hospital District’s] claims are barred by a straightforward application
of the Mirales Settlement’s release provision.” Similarly, the PUC, as party to this appeal, argues:
[The Hospital District’s] claims are barred by the Mirales settlement and judgment in two distinct was. First, the doctrine of res judicata precludes [the Hospital District], a Mirales class member, from relitigating the exact claims adjudicated and resolved in Mirales. . . . Second, setting aside res judicata, the exact claims [the Hospital District] presses in this lawsuit were released in Mirales.
We agree with AT&T and the PUC that the present claims are barred by the release in the
Mirales Settlement.
11 1. The Hospital District’s Claims Were Released by the Mirales Settlement.
The PUC is correct that the Mirales Settlement expressly releases the claims the
Hospital District attempts to bring here. “‘A settlement agreement is a contract, and its construction
is governed by legal principles applicable to contracts generally.’” Garza v. Villarreal, 345 S.W.3d 473,
479 (Tex. App.—San Antonio 2011, pet. denied) (quoting Donzis v. McLaughlin, 981 S.W.2d 58,
61 (Tex. App.—San Antonio 1998, no pet.)). “It is the general rule of the law of contracts that where
an unambiguous writing has been entered into between the parties, the Courts will give effect to the
intention of the parties as expressed or as is apparent in the writing.” City of Pinehurst v. Spooner
Addition Water Co., 432 S.W.2d 515, 518 (Tex. 1968). We review the interpretation of an
unambiguous contractual provision de novo. See URI, Inc. v. Kleberg County, 543 S.W.3d 755, 763
(Tex. 2018).
The Mirales Class is defined in relevant part as “all persons and entities who currently
reside in the State of Texas who subscribe, or formerly subscribed, to telephone service provided by
[Southwestern Bell] and pay, or paid, to [Southwestern Bell] a municipal fee . . . .” None of the
parties characterizes this language as ambiguous, and the Hospital District does not deny it is an
entity who subscribed to telephone service from Southwestern Bell and paid the municipal fees
during the disputed period. Southwestern Bell’s records confirm as much. Thus, the Hospital
District is a member of the Mirales Class.
The claims released in the Mirales Settlement include “any and all claims which have
arisen, arise now, or hereafter may arise or relate in any way to the pass-through or collection of
municipal fees in Texas.” Again, the parties and this Court are in agreement that the language is
12 unambiguous. Thus, we turn to the ordinary meaning of the terms to interpret the clause. Black
defines “arise from” as to “originate from,” “stem from,” or “result from.” See Arise, Black’s Law
Dictionary (10th ed. 2014). In the present suit, the Hospital District alleges:
[Southwestern Bell’s] failure or refusal to refund the Unauthorized Charges [i.e., municipal fees charged in excess of statutory guidelines] constitutes a material breach of contract and a violation of tariff, substantive rule[s] and PURA, and has resulted in unlawful rates being charged and collected by [Southwestern Bell] from [the Hospital District].
Each of these claims originates, stems, and results from Southwestern Bell’s collection of allegedly
impermissible municipal fees. The Hospital District’s claims therefore arise from the collection of
those fees and fall within the scope of the Mirales Settlement’s release.
The Hospital District, however, argues that the unambiguous language of this release
does not apply to its case because that language does not accurately reflect the claims the Mirales
parties intended to release. A settlement release is governed by the law of contracts and is therefore
limited by any defenses available in contract law. See Williams v. Glash, 789 S.W.2d 261, 264 (Tex.
1990). As the party seeking to avoid this unambiguous release, the Hospital District bears the burden
of demonstrating an applicable defense, such as fraud, mutual mistake, or lack of consideration. See
id. (“[O]nce the affirmative defense of release has been pleaded and proved, the burden of proof is
on the party seeking to avoid the release to establish mutual mistake.”). The Hospital District offers
the reporter’s record from the Mirales certification hearing as evidence that the parties never
intended to release its claims as part of the Mirales Settlement. As the Hospital District describes
it, the parties “carve[d] out claims regarding certain business customers”—allegedly including the
13 Hospital District—“from the class action.” Yet the evidence offered by the Hospital District does
not support its argument. The Hospital District is correct that counsel for AT&T dictated certain
stipulations into the record as part of a Rule 11 Agreement accepted by the court, but at no point did
AT&T or the court adopt any claim definition or class definition other than those stated in the
Mirales Settlement.1
The Hospital District also contends it is neither fair nor prudent to hold governmental
entities bound by class-action settlements unless those entities affirmatively choose to “opt in” to
the action. But Texas law requires putative class members to opt out of a settlement to avoid the
binding effects of class action. See Tex. R. Civ. P. 42(c)(2)(B)(v); Entex v. City of Pearland,
990 S.W.2d 904, 913 (Tex. App.—Houston [14th Dist.] 1999, no pet.) (“The trial court recognized
the problems with the opt-out provisions of the class action and expressed its preference for an opt-in
notification of class action, which is not available in Texas.”), abrogated on other grounds, Tracker
Marine, L.P. v. Ogle, 108 S.W.3d 349, 351 (Tex. App.—Houston [14th Dist.] 2003, no pet.);
Enterprise Concepts, Inc. v. Finnell, 964 S.W.2d 348, 349–50 (Tex. App.—Beaumont 1998, no pet.)
(emphasizing the opt-in provision of the Fair Labor Standards Act, 29 U.S.C. § 216(b), and
characterizing the suit as “not a true class action under Rule 42 of the Texas Rules of Civil
Procedure” due to this prerequisite to class membership). The Hospital District has not identified
any authority distinguishing governmental entities from private entities with respect to the
procedures governing class membership under state law, and courts may not “require a particular
procedure when the legislature has not seen fit to do so itself.” Matthews v. Scott, 268 S.W.3d 162,
1 We discuss the Rule 11 Agreement in further detail in our discussion of estoppel, infra.
14 173 (Tex. App.—Corpus Christi 2008, no pet.) (citing City of Rockwall v. Hughes, 246 S.W.3d 621,
631 (Tex. 2008)). Thus, even assuming any merit to the Hospital District’s policy arguments
regarding the effect of class-action settlements on governmental entities, we would defer to the
Legislature to make any changes to the rules governing class actions.
Because the unambiguous definitions in the Mirales Settlement include the Hospital
District and its allegations, and because the Hospital District offers no persuasive basis for contract
avoidance, we conclude its claims fall within the scope of the release.
2. Section 281.056 Does Not Exempt the Hospital District from the Release.
The Hospital District argues that even if its claims would otherwise fall within the
Mirales Settlement’s release, the Hospital District is not bound by that release because it was not
represented in the manner required by statute when the Cameron County district court rendered final
judgment. Section 281.056 of the Health and Safety Code provides, “The county attorney, district
attorney, or criminal district, as appropriate, with the duty to represent the county in civil matters
shall represent the district in all legal matters.” See Tex. Health & Safety Code § 281.056(b).
According to the Hospital District, “The plain language of Section 281.056 requires the presence of
the Harris County Attorney in ‘all legal matters.’” Based on the undisputed fact that this attorney
was never present in court and filed no pleadings in the Mirales litigation, the Hospital
District reasons that it was not “represented” in accordance with the statute. We find the
argument unavailing.
“When interpreting a statute, our primary objective is to ascertain and give effect to
the Legislature’s intent without unduly restricting or expanding the Act’s scope.” Greater Hous.
15 P’ship v. Paxton, 468 S.W.3d 51, 58 (Tex. 2015) (citing City of Lorena v. BMTP Holdings, L.P.,
409 S.W.3d 634, 641 (Tex. 2013)). “We seek that intent first and foremost in the plain meaning of
the text.” Id. at 58 (citing Lorena, 409 S.W.3d at 641; Texas Lottery Comm’n v. First State Bank,
325 S.W.3d 628, 635 (Tex. 2010)). “‘Undefined terms in a statute are typically given their ordinary
meaning . . . .’” Greater Hous. P’ship, 468 S.W.3d at 58 (quoting TGS–NOPEC Geophysical Co.
v. Combs, 340 S.W.3d 432, 439 (Tex. 2011)).
“Represent” is not defined in Section 281.056, so we turn to its ordinary meaning.
See id. Courts have defined the verb as “[to] fill the place of for some purpose: substitute in some
capacity.” See Thomas v. United Parcel Serv., Inc., 890 F.2d 909, 917–18 (7th Cir. 1989) (quoting
Webster’s Third New International Dictionary 1926 (3d ed. 1981)). Similarly, Merriam defines
“represent” as “to manage the legal and business affairs of.” See Merriam-Webster’s Collegiate
Dictionary 1057 (11th ed. 2008). The Random House definition of “represent” is “to stand or act
in the place of, as an agent does.” The Random House College Dictionary 1120 (Revised ed. 1984).
And American Heritage defines the word as “to act as a spokesperson for.” American Heritage
Dictionary of the English Language 1490 (5th ed. 2015). None of these definitions supports the
Hospital District’s argument that an attorney must be “presen[t]” in court or file pleadings to
represent a client. Particularly in the context of government and in-house counsel, attorneys
routinely represent their clients by advising them not to intervene, not to file responsive pleadings,
etc. But these attorneys are still representing their clients by advising them, managing their affairs,
and acting on their behalf. Thus, the attorneys delineated in Section 281.056 need not necessarily
appear in court or file pleadings to comply with the representation directive.
16 The Hospital District complains that the county attorney’s office had no opportunity
to provide advice pursuant to the statute because no one notified that office of the Mirales litigation.
This argument implies that the named plaintiffs, the court, or class counsel had an obligation under
Section 281.056 to notify the county attorney of the class action. But the statute offers no support
for such a construction. To the contrary, while other statutes place the burden to notify government
counsel on the plaintiff or the presiding court, cf. Tex. Gov’t Code § 402.010, this statute’s only
burden is placed on the county attorney itself. See id. § 311.016(2) (“‘Shall’ imposes a duty.’”).
Moreover, the record reflects that the Hospital District itself received adequate notice of the
proposed class-action settlement. The Hospital District does not deny it received that notice. To
whatever extent the county attorney was unaware of the litigation, that unawareness would have
resulted, at least in part, from the Hospital District’s failure to apprise the attorney of the pending
class action. Thus, under the Hospital District’s interpretation of this Section, it could simply avoid
unwanted litigation by failing to notify the county attorney. This is not a reasonable construction of
the statute. See Tex. Gov’t Code § 311.021(2)–(3) (requiring courts to presume the legislature
intended a just, reasonable, and effective result in enacting statute). Because the Hospital District’s
proposed construction is not reasonable and is inconsistent with the language of the statute, must
reject that construction.
We sustain the issue raised by AT&T and the PUC.
C. AT&T Is Not Estopped from Seeking to Bind the Hospital District.
In the final issue before this Court, the Hospital District contends AT&T is judicially
estopped from characterizing the Hospital District as a member of the Mirales Class. If the Hospital
17 District is correct, any error in the District Court’s analysis was harmless and its order cannot be
reversed. See Tex. R. App. P. 44.1(a).
“‘Judicial estoppel is a common law doctrine that prevents a party from assuming
inconsistent positions in litigation.’” Perryman v. Spartan Tex. Six Capital Partners, Ltd.,
546 S.W.3d 110, 117 (Tex. 2018) (quoting Kane v. Nat’l Union Fire Ins., 535 F.3d 380, 385 (5th
Cir. 2008)). Because judicial estoppel is an affirmative defense, the party urging estoppel has the
burden to conclusively prove each element. See Anadarko Petrol. Corp. v. Thompson, 94 S.W.3d 550,
553 (Tex. 2002) (listing as affirmative defense); OAIC Comm’l Assets, L.L.C. v. Stonegate Vill.,
L.P., 234 S.W.3d 726, 742 (Tex. App.—Dallas 2007, pet. denied) (stating burden); Southwest Guar.
Tr. Co. v. Providence Tr. Co., 970 S.W.2d 777, 782 (Tex. App.—Austin 1998, pet. denied) (same).
Appellate courts generally review judicial estoppel for an abuse of discretion. See Perryman,
546 S.W.3d at 117.
The elements of judicial estoppel are: “(1) a sworn, prior inconsistent statement made
in a judicial proceeding; (2) the party now sought to be estopped successfully maintained the prior
position; (3) the prior inconsistent statement was not made inadvertently or because of mistake,
fraud, or duress; and (4) the statement was deliberate, clear and unequivocal.” In re Marriage of
Butts, 444 S.W.3d 147, 151 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (citing Spera
v. Fleming, Hovenkamp & Grayson, P.C., 25 S.W.3d 863, 871 (Tex. App.—Houston [14th Dist.]
2000, no pet.); Vinson & Elkins v. Moran, 946 S.W.2d 381, 396 (Tex. App.—Houston [14th Dist.]
1997, writ dism’d by agr.)). To satisfy the first element, the party seeking estoppel must
conclusively demonstrate that the opposing party “alleged or admitted in his pleadings in a
18 former proceeding . . . the contrary to the assertion sought to be made” in the present proceeding.
Long v. Knox, 291 S.W.2d 292, 295 (Tex. 1956) (citing 31 C.J.S. Estoppel, § 121 (1955)) (other
citations omitted).
The Hospital District cannot prevail on this defense because it has not identified any
prior inconsistent statement by Southwestern Bell or AT&T. As evidence of such a statement, the
Hospital District produced the transcript from the final hearing on certification of the Mirales Class.
The Hospital District contends this transcript shows that Southwestern Bell “entered into a Rule 11
agreement . . . to carve out claims [of] certain business customers from the class action . . . including
[the Hospital District’s].” This characterization is contradicted by the transcript itself. The transcript
confirms that the parties entered into the Rule 11 Agreement and dictated that agreement into the
record. That agreement, however, did not “carve out” any class members or claims from the
proposed settlement. Instead, STA—the only remaining challenger to certification of the Mirales
Class—“agree[d] to withdraw all of its objections to the settlement of the Mirales lawsuit.” In
exchange for the withdrawn objection, Southwestern Bell agreed that it would not assert “any
judgment, ruling, order[,] or action of the Court in the Mirales lawsuit” as a defense to any “class
action lawsuit brought by STA as plaintiff (whether the lawsuit is ultimately certified as a class
action or not) . . . in which STA asserts the STA claims for itself and on behalf of a class of similar
situation persons or entities.” But at no point in this record did Southwestern Bell suggest that
governmental or commercial customers lie outside the Mirales Class, and at no point did it deviate
from the unambiguous language of the class definition, which includes all “entities who currently
19 reside in the State of Texas who subscribe, or formerly subscribed, to telephone service provided by
[Southwestern Bell].” The Hospital District does not deny that it constitutes such an entity.
Nor was Southwestern Bell’s subsequent litigation of the STA class action
inconsistent with AT&T’s current position regarding the binding effect of the Mirales Settlement
on the Hospital District. The Hospital District argues otherwise, pointing to a list of putative class
members that includes the Hospital District. It further alleges that Southwestern Bell “litigated the
STA case accepting and affirmatively arguing that the proposed class members in that case included
not only [the Hospital District] but dozens of governmental, commercial and other institutional
customers.” This argument mischaracterizes Southwestern Bell’s position in STA. From the first
day of litigation, Southwestern Bell “vigorously dispute[d]” the existence of any certifiable class and
denied the viability of the claims alleged. Nothing in this record reflects that Southwestern Bell ever
suggested the Hospital District—or any other putative class member—had a viable claim arising
from the fee dispute or that the present claims lie outside the release set forth in the Mirales
Settlement. Thus, the Hospital District has produced no evidence of a statement “contrary to the
assertion[s]” AT&T makes in the present case.2 We overrule the issue.
2 Long v. Knox, 291 S.W.2d 292, 295 (Tex. 1956). The Hospital District appears to argue that Southwestern Bell’s failure to raise the possible res judicata effect of Mirales during the STA litigation constitutes a prior inconsistent statement. Under the Mirales Rule 11 Agreement, Southwestern Bell had promised not to raise that argument against STA and its putative class. Thus, even assuming any inconsistency between that omitted statement and the assertions made here, “[t]he doctrine of judicial estoppel simply does not apply under these circumstances.” Ferguson v. Building Materials Corp. of Am., 295 S.W.3d 642, 644 (Tex. 2009) (explaining that the doctrine is intended “to prevent parties from playing fast and loose with the judicial system”); Spartan Tex. Six Capital Partners, Ltd. v. Perryman, 494 S.W.3d 735, 749 (Tex. App.—Houston [14th Dist.] 2016, pet. granted) (“[C]ourts should determine if applying judicial estoppel is appropriate in light of the specific facts of each case and the doctrine’s purpose of ‘protect[ing] the integrity of the
20 III CONCLUSION
Having concluded that the district court erred in reversing the PUC’s order dismissing
the Hospital District’s complaint, we reverse its final judgment and render judgment affirming the
PUC’s dismissal order. Tex. R. App. P. 43.2.
__________________________________________ Edward Smith, Justice
Before Chief Justice Rose, Justices Kelly and Smith
Reversed and Rendered
Filed: May 3, 2019
judicial process.’” (quoting United States ex rel. Long v. GSDMIdea City, L.L.C., 798 F.3d 265, 271 (5th Cir. 2015)) (alteration in original), aff’d as modified, 546 S.W.3d 110 (Tex. 2018)).