Imagine that your trial counsel informs you that the trial judge has just made a significant adverse ruling against you, but then he tells you that you could file an interlocutory appeal of the ruling and challenge it now instead of waiting until the whole case is over to appeal.  What do you do?

One big concern that many lawyers and clients have faced when making this decision is whether the court’s interim ruling can still be challenged after conclusion of all proceedings in the trial court and issuance of a final judgment.   There was great uncertainty in many quarters that if you didn’t take the appeal immediately, you would lose the chance of challenging the order later.  That fear almost certainly has prompted more interlocutory appeals to be taken than might have otherwise.

 

A New Rule Emerges

Fortunately for lawyers and clients alike, the Texas Supreme Court has clarified this decision.   The court held in Bonsmara Natural Beef Company v. Hart of Texas Cattle Feeders, LLC, No. 19-0263 (Tex. June 26, 2020), that

“a party does not forfeit its right to challenge a ruling on appeal from a final judgment simply by opting not to pursue an interlocutory appeal of that ruling.”

The Texas Supreme Court reasons in Bonsmara that most statutes that authorize interlocutory appeals use permissive phrasing, stating essentially that a person “may appeal” from the order in question.  Thus, the court concludes that the legislature did not intend to mandate that a party take an interlocutory appeal if one is available.  The general rule, that all interlocutory orders merge into the final judgment and may be appealed at that time, still stands.

 

Other Types of Interlocutory Appeals

The Bonsmara opinion involves an order denying a motion to compel arbitration.  However, the holding applies to an assortment of trial court rulings that are subject to interlocutory appeals.  Though there are a number of statutes that authorize interlocutory appeals, Texas Civil Practice and Remedies Code Section 51.014 has the greatest breadth of coverage.  It allows for interlocutory appeals from a variety of types of orders, including (1) an order appointing a receiver or trustee, (2) an order that certifies or refuses to certify a class action, (3) an order granting or refusing a temporary injunction, (4) certain orders relating to freedom of speech or freedom of the press, (5) orders granting or denying special appearances, except in suits brought under the Texas Family Code, and (6) orders striking expert witness affidavits in healthcare liability claims.  The supreme court rejected the idea that each of these subject-matter matters  should be addressed separately, in a piece-meal approach. 

 

Practical Reasons Favor Interlocutory Appeals of Some Orders

There are a couple of caveats to consider.  Some interlocutory orders could become moot because of subsequent rulings in the case.  One example is a temporary injunction.  Usually, the final ruling in the case on whether to issue a permanent injunction will supersede the earlier temporary injunction.  Also, orders resolving certain issues in receivership proceedings may not be appealed at the end of the case.  The reason for this latter situation is to provide protections to third parties who may have dealt with the Receiver during the proceedings.

 

Weigh the Costs and Benefits

One potential downside to waiting until the end to appeal an interlocutory order is that doing so could result in lot of wasteful expenses and unnecessary use of judicial resources.  This is illustrated by what occurred in Bonsmara.  The trial court denied a motion to compel arbitration.  As a result, the parties went through a complete jury trial and judgment.  Then upon appeal of the order denying arbitration of the claims, the appellate courts held that it was error not to have compelled arbitration.  As a result, the parties will have to litigate their claims all over again—this time in front of an arbitrator instead of a judge.  For the party that prevailed on appeal, maybe the delay and cost was worth it.  For the party that lost on appeal, win or lose on retrial, there’s just more expense.

  

By Published On: July 2, 2020Categories: AppellateTags:

About the Author: Mike Northrup

Mike Northrup is a Shareholder and Section Head of the Cowles and Thompson Appellate Practice Group.