In a per curiam opinion, the Texas Supreme Court has reversed a Dallas Court of Appeals decision holding that the court did not have jurisdiction over a party’s interlocutory appeal of a temporary injunction when the trial court has delayed the trial.
Leo Bienati, Theresa Pham, Carlos Lacayo, and Andres Ruzo v. Cloister Holdings, LLC (No. 23-0223; June 7, 2024) arose from a dispute between board members of Holy Kombucha, a beverage company. When several members got together and amended the shareholder agreement to exclude the Cloister representative from the quorum requirement, Cloister brought suit alleging contract and tort claims, as well as seeking a temporary injunction barring the board members from changing Cloister’s quorum rights as provided by the original shareholders’ agreement. The trial court granted the TI. The others (Bienati, Pham, Lacayo, and Ruzo) filed an interlocutory appeal challenging the TI. While the appeal was pending, Defendants filed counterclaims against Cloister and added two Cloister board nominees as third-party defendants. They further moved to adjust the scheduling order and reschedule the trial to allow discovery on the counterclaims. Instead of doing that, the trial court abated the case until either the court of appeals ruled on the interlocutory appeal or a date certain for a hearing on Defendants’ motions. The court of appeals dismissed the appeal, holding that the trial court’s delay was “an effort to obtain an advisory opinion” on the propriety of the TI. Defendants sought review.
SCOTX reversed. The general rule states that “[p]arties ordinarily should proceed to trial pending an [interlocutory] appeal from a temporary injunction” (citations omitted). But even when the trial court delays the trial, “the appellate court retains jurisdiction over the appeal from a temporary injunction until a final judgment moots consideration of it” (citations omitted). Although “Texas courts have no jurisdiction to render advisory opinions” (citations omitted), here the court of appeals failed to identify any “jurisdictional defect” that justified its decision. The enjoined board members had standing because the TI restrains their actions, the appeal was not mooted by another trial court order, and the case was ripe for review. “In short,” the Court reasoned, “a decision from the court of appeals would bind the parties and resolve an actual controversy; accordingly, such a decision is not advisory.”
Additionally, the Court rejected the court of appeals’ reliance on Texas Rule of Civil Procedure 683, which provides that an appeal of a TI “shall constitute no cause for delay of the trial.” This rule, however, does not have anything to do with the appellate court’s jurisdiction. As the Court stated, “an appellate decision as to the propriety of a temporary injunction is not advisory, even if it involves a question of law that implicates the merits of the claims presented.” Additionally, the Court “disapprove[d] of cases refusing to recognize jurisdiction to review temporary injunctions because trial court proceedings have been delayed pending an appeal from a temporary injunction.”
One gets the impression from the court of appeals’ opinion and SCOTX’s commentary on it that the court of appeals just didn’t want to hassle with the merits questions raised by the TI and found a way to get rid of the appeal. SCOTX, however, held the court’s feet to the fire and sent the case back for proceedings on the merits. Another day, another corrective per curiam opinion that shouldn’t have been necessary.
