Justice Jaime Tijerina

In an opinion by Justice Tijerina, the Corpus Christi Court of Appeals has issued a conditional writ of mandamus directing a Wharton County trial court to rule on the relator’s motion to allow access to a case file that had purportedly been sealed by the trial court. The trial court cancelled one hearing on the motion and eventually notified the parties that it would rule by submission, but after six months passed without a ruling, relator filed a writ of mandamus with the court of appeals.

The underlying case involved the distribution of attorney’s fees and expenses from a settlement of a federal multidistrict litigation case in Kansas (the Synerga MDL relating to genetically modified corn products). The real parties in interest, two law firms, initiated the action in Wharton County seeking to administer the fees and expenses through a qualified settlement fund. The trial court approved the fund, appointed a fund administrator, and an attorney as a special master (Gowan). Shortly thereafter, Employee Funding LLC, a nationwide consumer finance company, which held a security interest in the attorney’s fees paid to one of the law firms, contacted the fund administrator for more information about the fund. (The presence of a third party litigation financing company with a security interest in the attorney’s fees is an interesting issue, but we won’t go into it here.) The pertinent firm then assigned its rights to a distribution to Employee Funding. Subsequently, Employee Funding received $2.5 million in distributions from the fund, much less than it thought was due. When Employee Funding requested information from the fund administrator and the special master, they refused to provide it. Employee Funding intervened in the underlying proceeding and sought access to the case file. Acting under instructions from Gowan, the clerk’s office denied access. Employee Funding subsequently filed a motion granting it access to the file and an emergency motion to stay distribution of more than $60 million in fees to privately retained attorneys until it had the opportunity to examine the case file. Six months passed without a ruling. Employee Funding filed a writ of mandamus in the court of appeals in December 2021.

Employee Funding raised several issues in its petition. The first two issues involved whether the trial court improperly sealed or improperly denied public access to the court’s file without a written, publicly available motion and order pursuant to TRCP Rule 76a (setting out procedure for sealing court records). In this case, no written Rule 76a order existed, so the court of appeals had nothing to review. The court thus overruled Employee Funding’s issues “without prejudice to its ability to raise these issues, if necessary, in a future appeal or original proceeding.” Similarly, the court of appeals had no record to review with respect to the appointment of the special master and the division of fees, it had no choice but to overrule Employee Funding’s issues challenging the trial court’s appointment of a special master or whether it abused its discretion in awarding fees.

With respect to the trial court’s failure to rule on Employee Funding’s motions for access to the file and to stay distribution of fees, however, the court of appeals found that the court abused its discretion. In order to obtain mandamus relief for failure to timely rule on a motion, the relator must establish: (1) the motion was properly filed and has been pending for a reasonable time; (2) the relator requested a ruling on the motion; and (3) the trial court refused to rule (citations omitted). “Reasonable time” is measured on a case-by-case basis. Some of the criteria the court of appeals will consider are the “trial court’s actual knowledge of the motion, its overt refusal to act, the state of the court’s docket, and the existence of other judicial and administrative matters which must be addressed first” (citations omitted). Noting that appellate courts have granted mandamus relief in cases involving delays for delays ranging from three to 18 months, and that trial courts have broad discretion to manage their dockets, the court of appeals determined that the six-month period of delay in this case could not be justified. As Justice Tijerina wrote, “Without access to the court’s file, or the ability to pursue relief from a public sealing order, the proceedings are skewed and Employee Funding’s rights to a fair trial are in danger of impairment. Similarly, Employee Funding filed an emergency motion seeking to stay the distribution of funds in which it has a security interest. If the trial court does not issue a ruling on that motion, then it is effectively denied.” The court of appeals further found that Employee Funding had no adequate remedy on appeal.

Appellate courts don’t mandamus trial courts for fun. There is no question that the irregularities below (no Rule 76a sealing order, no record regarding the appointment of the master or distribution of fees) raised red flags here. The trial court attributed the ultimate failure to hold a hearing to “scheduling conflicts,” but then didn’t respond to the submissions it specifically requested in lieu of hearing. It should be noted that the amount of fees involved in this case exceed $60 million, and the lack of transparency around who is getting what is disturbing. In any event, we applaud Justice Tijerina and the court of appeals for slowing down the train and giving the process a chance to work like it’s supposed to.

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