Supreme Court of Texas Blog

No. 13-0573
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THE FREDERICKSBURG CARE COMPANY, L.P. v. JUANITA PEREZ, VIRGINIA GARCIA, PAUL ZAPATA, AND SYLVIA SANCHEZ, INDIVIDUALLY AND AS ALL HEIRS OF ELISA ZAPATA, DECEASED

Oral argument was held on October 14, 2014. The Court issued an opinion resolving the case on March 6, 2015. It then denied rehearing on June 26, 2015 File Closed

In the news...

Tracking 4 articles about this case.

January 12, 2016

U.S. Supreme Court Declines to Review Challenge to Texas High Court's Order in Nursing Home Dispute

from Disputing

The Court has issued opinions:

March 10, 2015

Texas Supreme Court Holds FAA Preempts Texas Law in Nursing Home Dispute

from Disputing

June 16, 2014

Three opinions, one grant [Jun. 13, 2014]

from SCOTXblog

This article also mentions 18 other cases.

March 23, 2014

Two opinions, one rehearing grant, and six grants [Mar. 21, 2014]

from SCOTXblog

This article also mentions 8 other cases.

Opinion

March 6, 2015

Green
Hecht
Johnson
Willett
Guzman
Lehrmann
Boyd
Devine
Brown

Justice Green delivered the opinion of the Court.View Electronic Briefs | Oral Argument | Video PDF

 

Court of Appeals

Appellate District:4th Court of Appeals
Outcome Below:Affirmed
COA Docket No.:04-13-00111-CV
Opinion Author:Honorable Rebeca C. Martinez

Trial Court

Trial Court:407th District Court
County:Bexar
Trial Judge:Honorable Richard Edward Price
Trial Docket:2012-CI-20420

Docket Entries

Date Event Outcome  
2016-01-15 Notice received  
2015-12-11 Electronic communication sent to Party  
2015-12-11 Miscellaneous motion disposed. See Remarks.   Denied
2015-12-10 Notice received  
2015-12-09 Reply to Response to Motion  
2015-12-04 Response to Motion filed  
2015-12-03 Call received  
2015-12-01 Motion to Stay Filed  
2015-10-30 Letter Filed  
2015-09-25 Letter Filed  
2015-08-11 Case Stored  
2015-06-26 Motion for Rehearing - Disposed Denied
2015-06-26 Mandate issued  
2015-06-09 Response to Motion for Rehearing (Petitioner)  
2015-05-19 Motion for Extension of Time to File Response disposed   Filing granted
2015-05-19 Motion for Extension of Time to File Response  
2015-05-08 Supreme Court of Texas Requested Response  
2015-04-10 Amicus Curiae Brief received  
2015-03-27 Amicus Curiae Brief received  
2015-03-26 Call received  
2015-03-26 Motion for Extension of Time to File Motion for Rehearing disposed   Filing granted
2015-03-26 Phone call from Clerk's Office  
2015-03-25 Motion for Extension of Time to File Motion for Rehearing  
2015-03-25 Amicus Curiae Letter Received  
2015-03-24 Case forwarded to Court
2015-03-24 Motion for Rehearing  
2015-03-18 Substitution of Counsel  
2015-03-13 Amicus Curiae Letter Received  
2015-03-06 Opinion issued   Court of Appeals' judgment reversed; cause remanded to trial court
2015-03-06 Court approved judgment sent to attorneys of record Issued
  This case was awaiting the Court's decision after oral argument between October 14, 2014 and March 6, 2015.  
2014-10-14 Oral argument  
2014-10-13 Amicus Curiae Brief received  
2014-09-15 Oral Argument Submission Form from Attorney received  
2014-09-15 Oral Argument Submission Form from Attorney received  
  This case was waiting for oral argument between June 13, 2014 and September 15, 2014.  
2014-06-13 Case set for oral argument   Case set for oral argument
  This case was waiting for oral argument between March 21, 2014 and June 13, 2014.  
2014-03-21 Petition for Review disposed   Filing granted
2014-03-21 Petition for Review granted
2014-02-05 Reply Brief (Petitioner)  
2014-01-21 Brief on the Merits (Respondent)  
2013-12-17 Motion for Extension of Time disposed.   Filing granted
2013-12-17 Motion for Extension of Time to File Brief filed  
2013-12-09 Brief on the Merits (Petitioner)  
2013-11-13 Motion for Extension of Time disposed.   Filing granted
2013-11-13 Motion for Extension of Time to File Brief filed  
2013-10-24 Case Record Filed  
2013-10-21 Record Requested in Petition for Review  
2013-10-18 Brief on the Merits Requested  
2013-09-11 Amicus Curiae Brief received  
2013-09-09 Call received  
2013-09-03 Reply to Response (Petitioner)  
2013-08-27 Case forwarded to Court
2013-08-27 Call received  
2013-08-26 Response to Petition (Respondent)  
2013-08-09 Motion to Stay Disposed Filing granted
2013-08-09 Stay Order issued
2013-07-25 Motion to Stay Filed  
2013-07-25 Petition for Review (Petitioner)  

Parties

Party Counsel Role
Perez, Juanita
Ms. Marynell Baker Maloney
Mr. Gavin McInnis
Mr. Peter M. Kelly
Respondent
The Fredericksburg Care Company, L.P.
David Harris
Mr. Shawn Christopher Golden
Mr. Roy R. Barrera III
Petitioner

Amici Curiae

Amicus Curiae Counsel
American Health Care Association and Texas Health Care Association
Mr. Gavin Joe Gadberry
The Texas Trial Lawyers Association (TTLA)
Mr. Michael G. Guajardo
Chamberlain, David E.
Mr. David E. Chamberlain
Texas Association of Defense Counsel
Mr. Roger W. Hughes
Mr. Robert George Muckleroy IV
Tex-Abota
Mr. Joseph L. Hood Jr.
Texas Medical Liability Trust and Proassurance Corporation
Ms. Diana L. Faust

Statute that limits doctors from using arbitration clauses is preempted

In the past decade, it only seemed that the Texas Supreme Court had already decided every permutation of health-care liability claim and every challenge to an arbitration clause. What happens when one case presents both — a challenge to the Texas law that restricts doctors and other health-care providers who might try to insert arbitration clauses in their contracts?

The Texas statute is Section 74.451 of the CIvil Practice and Remedies Code, which imposes some strict requirements on any arbitration clause between a health-care provider and a patient. There was no dispute in this case that the defendant nursing home (Fredericksburg) failed to meet those requirements, so if the Texas law applied, the arbitration clause it demanded of patients would be unenforceable. On its side, the Federal Arbitration Act generally preempts state laws such as this one that impose heightened requirements on the validity of arbitration clauses, at least for contracts involving interstate commerce.1

The wrinkle here is that Congress has generally permitted states, not the federal government, to take the lead in regulating insurance. Within the upside-down world of insurance, the doctrine of federal preemption yields (by virtue of the McCarran-Ferguson Act or "MFA") so that insurance-specific state laws can, in that limited sphere, be supreme over a generally applicable federal law.

The Texas Supreme Court's opinion focused, therefore, on whether Section 74.451 was a law that fit within the MFA. The question is whether it was a "law enacted by [the] State for the purpose of regulating the business of insurance." 15 U.S.C. §1012(b). If so, it could survive preemption. If not, it would be preempted.

The bulk of the Court's analysis focuses on legislative "purpose." Looking at the statute as a whole, the Court concluded that its purpose is not direclty related to the relationship between insurance companies and their insureds ("the business of insurance"). The Court acknowledged that one of the broader goals was to lower health-care costs by, among other things, lower premiums for malpractice insurance. But the Court concluded that was too attenuated to satisfy the U.S. Supreme Court's test. (The U.S. Supreme Court has distinguished the "business of insurance" from the "business of insurance companies," which basically asks whether the regulation is about paperwork or profits. If the goal is to reduce an insurer's costs and maybe get a trickle-down reduction in premiums, then it's the latter category and too attenuated.) And even zooming to focus just on Section 74.451, the picture would be the same. That provision says nothing about insurance directly but instead talks about the relationship between doctor and patient.

Section 74.451 is, the Court held, preempted by the Federal Arbitration Act for any health-care contracts that affect interstate commerce.

So, does a health-care provider now have to choose between demanding arbitration and the procedural protections they fought so hard for in 2003 (with mandatory expert reports and interlocutory appeals)? Maybe not. With this new hybrid category of arbitration and health-care liabilty appeals, a whole new world of permutations beckons. Who will be the first defendant to wait for the expert report deadline, file an interlocutory appeal challenging its adequacy, and after losing that appeal, demand arbitration — perhaps triggering a second interlocutory appeal?


  1. That may be nearly every defendant of any size, in our era of third-party-payor health care. As the Court explains, even accepting Medicare payments can bring a provider within the bounds of the FAA. 

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