26 Jun The Interlocutory Right to Appeal May Not Mean You Have to Mooooove So Quickly
Matthew M. BuschiCounsel
In its opinion in No. 19-0263; Bonsmara Natural Beef Company, LLC et. al. v. Hart of Texas Cattle Feeders, LLC et. al, issued today, June 26, 2020, the Texas Supreme Court pronounced a general clarifying rule regarding the jurisdiction of the Courts of Appeals to hear appeals after final judgment on orders that have the capacity to be challenged through an interlocutory appeal. The result? Yes, they have the jurisdiction to review such orders that could have been reviewed in an interlocutory appeal, but were not. The case, which was centered around a contract between a cattle importer and a cattle feeding company providing feed of the cattle until they reached the beef market, involved an arbitration agreement clause in a contract between the cattle owner and the feed company. The trial court denied Hart’s motion to dismiss and compel arbitration. Such an order denying compelling arbitration is appealable on an interlocutory basis, however, Hart elected not to bring an interlocutory appeal. After a jury trial on the merits, Hart then brought the appeal, challenging the denial of the motion to compel arbitration. Bonsmara argued that the court of appeals did not have jurisdiction to hear that appeal because once Hart failed to bring the interlocutory appeal, the courts of appeals were deprived of their jurisdiction to address the merits of that order denying compelling arbitration.
The Supreme Court swiftly disposed of the argument, relying mainly on the existence of permissive, not mandatory, language in the statutes, and in particular the one at issue in the case, giving the additional jurisdiction of an interlocutory appeal to the courts of appeals. Because the statue analyzed, and as a general matter most such statutes, use the term “may appeal,” rather than “must appeal,” the Supreme
Court found that courts of appeal have jurisdiction to hear post-judgment appeals of orders that could have been brought as interlocutory appeals. While the ruling should be fairly generally applicable to such orders subject to interlocutory appeals, the practitioner should always check the particular statute authorizing an interlocutory appeal for a particular kind of order because, as the Court notes, the language of a statute could be compulsory, and thus representing the intention of legislature, would be a specific carve-out to this rule.
The Court also addressed public policy doctrines that could also run contrary to this general rule such as mootness, estoppel, and waiver by conduct. While the Court found none of them applicable in this case, it is possible for public policy based-doctrines to run contrary to this general rule. For instance, orders appointing receivers are not appealable at the end of the a case based on the notion of estoppel where in such an instance, third-parties would have relied on their dealings with the receiver in good faith. Thus, to avoid harming god-faith third parties, orders appointing receivers must be immediately appealed, or else they are lost.
The Court further dealt with two remaining more fact specific challenges of Bonsmara on the merits of whether the motion to compel arbitration should have been denied or granted, but the more generally applicable takeaway from this opinion is that even if the order you seek to appeal could have been brought up in an interlocutory appeal, you most likely will still have the opportunity to appeal it after a final judgment, but be wary of mandatory language statutes granting that power or public policy doctrines that may specifically exclude the type of order you seek to appeal from this more widely applicable rule.
ABOUT THE AUTHOR: Matthew M. Buschi is Counsel at Rapp & Krock, PC in the Litigation group.
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