Earlier this month the Texas Supreme Court requested merits briefing in FTS International Services, LLC v. Patterson (No. 20-0795). At issue is whether the Tyler Court of Appeals erred in allowing the plaintiff to assert direct negligence claims against the trucking company despite the company accepting liability for its driver’s negligence under the doctrine of respondeat superior.
The case arose from an accident involving an FTS truck and the plaintiff in Upshur County. The plaintiff’s vehicle suffered minor damage. The plaintiff stated that he was uninjured and drove away from the scene. The plaintiff later sued FTS and the driver for negligence and FTS for gross negligence. FTS accepted liability for the driver’s negligence. At trial the jury found the driver 70% responsible and FTS 30%. It awarded more than $26 million in compensatory damages for an alleged back injury. It also found FTS grossly negligent and awarded $75 million in punitive damages. On appeal the Tyler Court of Appeals reversed the trial court’s judgment and remanded for new trial, but in doing so the court found legally sufficient evidence supporting the jury’s direct negligence and gross negligence findings. FTS sought review from SCOTX.
The primary legal question for the Court to decide is whether Texas law recognizes negligence theories such as negligent hiring, training, or supervision when alleged against a corporate employer that has admitted to its employee’s negligence. FTS’s petition for review urges the Court to adopt the so-called Patterson rule, which is derived from a 1961 decision by the Beaumont Court of Appeals [Patterson v. E. Tex. Motor Freight Lines, 349 S.W.2d 634 (Tex. App.—Beaumont, 1961, writ ref’d n.r.e)]. The Patterson court ruled that once the corporate employer admits that the employee acted in the course and scope of employment, any direct negligence claims against the employer become duplicative and wasteful of judicial resources. According to the petition, “Patterson’s key insight is that a respondeat superior claim and a ‘direct’ negligence claim like negligent entrustment are merely alternative means for imposing liability on an employer for a single injury caused by the conduct of its employee [citations omitted]. Both types of claims require a finding that the employee was negligent, both claims seek to hold the employer liable for the employee’s acts or omissions, and both claims seek recovery for the same injury [citations omitted]. Thus, there is no reason to allow both claims to proceed at once.”
While most Texas courts of appeals and federal district courts (and at least 30 other states) have adopted the Patterson rule, some (including the Tyler Court of Appeals) have created an exception to the rule when the plaintiff alleges the employer’s gross negligence. FTS argues that a gross negligence exception makes no logical sense since the underlying claim involves the employee’s negligence, not the employer’s. Moreover, the exception allows plaintiffs to introduce prejudicial and inflammatory evidence of past safety “violations” to show how “bad” the trucking company is, thus playing into the hands of reptile theorists. It likewise distorts the jury’s apportionment of fault by shifting the focus of the trial to the employer’s conduct rather than the accident itself. Indeed, the whole nuclear verdict problem stems from opening the door to a substantial level of irrelevant evidence that becomes the basis for excessive awards of punitive damages for even relatively minor accidents.
In its response to the petition, the plaintiff-respondent urges the Court not to grant review because (1) the court of appeals resolved FTS’s concerns by finding the damages award excessive and remanding the case for new trial, (2) the Texas Legislature resolved the respondeat superior issue in HB 19, and (3) FTS failed to preserve the issue its presents to the Court. It also argues that the evidence was legally sufficient to support the negligence and gross negligence claims against FTS.
It seems unlikely that the Court would have requested merits briefing if, as the plaintiff-respondent argues, the case was not “grant worthy.” Might the Court grant review to consider the status of Texas law as of September 1, the effective date of HB 19? If SCOTX affirms the court of appeals and the case goes back to the trial court, a new trial will still be conducted under prior law (HB 19 applies only to an action commenced on or after September 1). Nevertheless, HB 19’s provisions relating to the type of evidence that may be introduced in the first phase of a bifurcated trial with respect to the employer defendant and its recognition that the claimant may pursue a gross negligence claim in the second phase even if the employer admits course and scope pose an interesting question for the Court. Here the plaintiff-respondent introduced evidence of the employee driver’s driving history, as well as FTS’s departures from its own internal policies. SCOTX might take this opportunity to clarify what type of evidence may come in on a direct negligence or gross negligence claim that is not specifically sanctioned by HB 19. Put another way, there are evidentiary issues in this case that HB 19 does not address. Should the Court decide to address them, it could help smooth the transition from the old law to the new.
