Ron Beal
Professor & Attorney at Law
One Bear Place #97288
Waco, TX 76798-7288
(254) 710-6590
December 17, 2007
Texas Supreme Court
P.O. Box 12248
Austin, TX 78711
Re: Amicus Letter: Re: Igal v Brightstar Information Technology Group, Inc.; Cause No: 04-0931
To the Honorable Justices of the Texas Supreme Court:
My name is Ron Beal. I am a professor of law and a licensed, practicing attorney in the State of Texas. I have dedicated over 20 years of my professional career to preserving, promoting and enhancing the quality of administrative law in this great State to ensure effective, fair and efficient government action by our state agencies and fair treatment and decision making towards our citizens of the State of Texas. I am the author of Texas Administrative Practice and Procedure (Lexis Law Publishing, 10th ed., 2007).
I have no interest, financial or otherwise, in this litigation. I do not have a relationship with any of the parties or lawyers to this appeal and the litigation of this cause in the district court. I am writing to this Court on my own accord and I am not being paid nor otherwise compensated for my views. I have no standing before this Court except as a concerned citizen and licensed attorney, but I write solely to preserve the integrity of the administrative process.
I file this amicus letter in support of a motion for rehearing in the above listed cause. I believe there is no doubt that the agency had subject matter jurisdiction to hear and decide the statutory Pay Day Act claim, but there is no legal basis to assert the determination of that claim had res judicata, claim preclusive effect upon the separate common law debt action. To so hold will cause great confusion within the judiciary, agencies and the practicing bar as it relates to the fundamental principles that govern the power of administrative agencies and its relationship to the Article V Constitutional courts.
As this Court held in Barr v. Resolution Trust Corp., 837 S.W.2d 627 (Tex. 1992), much of the difficulty associated with the doctrine of res judicata is due to the confusion of related theories. Broadly speaking, res judicata is a generic term for a group of related concepts concerning the conclusive effects given final judgments, Puga v. Donna Fruit Co., 674 S.W.2d 677, 679 (Tex. 1982). Within the general doctrine, there are two principal categories:
(1) claim preclusion (also known as res judicata) and
(2) issue preclusion (also known as collateral estoppel).
Res judicata or claim preclusion prevents the relitigation of a claim or cause of action that has been finally adjudicated, as well as matters that, with the use of diligence, should or could have been litigated in the prior suit, Garcia v. R. C. Cola 7-Up Bottling Co., 667 S.W.2d 517, 519 (Tex. 1984). If the party asserting a claim prevails, the cause of action is merged into the judgment and the cause of action ceases to exist. If the party defending the claim prevails in the prior suit, the judgment acts as a bar to matters which could have been litigated in the original suit, Jeanes v. Henderson, 688 S.W.2d 100.103 (Tex. 1985).
Issue preclusion or collateral estoppel prevents the relitigation of particular issues already resolved in the prior suit, Bonniwell v. Beach Aircraft, 663 S.W.2d 816, 818 (Tex. 1984).
Claim preclusion prevents the splitting of the cause of action if any such cause of action which arises out of those same facts, if practicable, could have been litigated in the same lawsuit. Thus, this court adopted the transactional approach to what constituted a “claim” so that any cause of action that arose out of the same common nucleus of operative fact or the same transaction or series of transactions, they will be merged in a final judgment and barred from being reasserted or for the first time asserted in a second lawsuit, Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628-31 (Tex. 1992).
It is undisputed in this case that the liability, if any, of the respondent arises out of a common nucleus of operative fact, ie. the employment agreement entered into in April of 1998. It is also undisputed that the legislature provided for a statutory cause of action in the Texas Pay Day Act to be heard and resolved by the Texas Employment Commission (now part of the TWC) to hear and adjudicate complaints for failure to pay wages owed, Tex. Labor Code, Section 61.051(a).
However, it is also undisputed that the petitioner had the right to pursue a common law debt action arising out of the same common nucleus of operative fact, ie. the employment agreement entered into in April of 1998, Holmans v. Transource Polyymers, Inc., 914 S.W.2d 189, 190 (Tex. App.-Ft. Worth 1995).
Further, it is undisputed that the TEC/TWC wholly lacked subject matter jurisdiction over the common law cause of action. As this Court has long held, it would be unconstitutional and a violation of separation of powers for the legislature to vest in an executive branch agency the power to adjudicate common law, contested rights to a contract, State v. Flag-Redfern Oil Co., 852 S.W.2d 480, 483 (Tex. 1993); General Land Office v. Rutherford Oil Co., 802 S.W.2d 65, 68-69 (Tex. App.-Austin 1990); Railroad Comm. of Texas v. Rau, 45 S.W.2d 413, 416 (Tex. Civ. App.-Austin 1931), see also Amarillo Oil v. Energy-Agri Products, 794 S.W.2d 20, 26 (Tex. 1990) noting with approval Biskamp v. General Crude Oil Co., 452 S.W.2d 515, 517 (Tex. App.-San Antonio 1970, writ ref’d)
The TEC/TWC can only constitutionally adjudicate claims created by statute, Railroad Comm. of Texas v. City of Austin, 524 S.W.2d 262, 267-68 (Tex. 1975); Dudley v. Automatic Gas. Co., 935 S.W.2d 517, 521-23 (Tex. 1946); Corzelius v. Harrell, 143 Tex. 509, 186 S.W.2d 961, 964 (1945).
Therefore, it is finally undisputed that the petitioner could not have asserted a common law debt action before the TEC/TWC and that the TEC/TWC lacked subject matter jurisdiction to hear and decide the common law debt action. Thus, res judicata simply does not bar the claim from being presented in the district court for the petitioner, exercising due diligence could not have so asserted and the common law debt action was not merged in the order issued by the TWC/TEC.
This Court acknowledged that the legislature did not intend to abolish the common law debt action and it did not intend to vest the TEC/TWC with exclusive, original jurisdiction to force the petitioner to first exhaust his administrative remedies before seeking relief in the district court. (Opinion at page 2-3).
Of course, if the TEC/TWC had decided the merits of the dispute beyond the issue of whether the petitioner had timely filed its claim, such findings would have had binding effect in the common law debt action. Collateral estoppel or issue preclusion bars the relitigation of any identical, ultimate issue if (1) the facts sought to be litigated in the second proceeding were fully and fairly litigated in the prior action, (2) those facts were essential to the judgment in the first action, and (3) the parties were cast as adversaries in the first action, Sysco Foods Servs. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1999). However, since the statute of limitations solely applied to the statutory cause of action and not the common law cause of action, there are no findings in the first order that are binding in the second cause.
This Court indicated it did not believe the petitioner should have two bites at the apple. This Court held “Once the horse crosses the finish line, a claimant cannot switch horses and run the same race again, hoping for a different outcome.” However, the court cited no authority for that general proposition and to rely on the doctrine of res judicata is simply not justified under the currently stated doctrine.
The concern of this amicus is that the net effect of this Court’s holding is to allow an agency order to abolish the right to a common law action when it was not the intent of the legislature to do so. Further, the significant concern remains as to whether the Texas Constitution’s separation of powers provision, Tex. Const. Art. II, section I, allows an agency order to wholly displace and prevent the assertion of a common law cause of action when it was not the intent of the Legislature to do so.
This writer humbly requests this Court to clarify how a common law cause of action can be merged in an executive agency order when such agency did not have the constitutional or statutory subject matter jurisdiction to hear and resolve such common law claim. Further, this writer humbly requests this Court to clarify how such an executive agency order may thereby bar the right of a Texas citizen to assert a common law cause of action in a constitutional district court when this Court admits that the legislature demonstrated no express or implied intent to abolish the common law cause of action.
Sincerely,
Ron Beal
Professor & Attorney at Law
Bar No: 24005041