Phillip Archer A/K/A Philip Archer v. State ( 2009 )

NUMBER 13-07-00624-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
W. SCOTT McCOLLOUGH AND DAVID BOLDUC, Appellants,
v.
TEXAS PUBLIC UTILITY COMMISSION, Appellee.
On appeal from the 98th District Court
of Travis County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Vela
Memorandum Opinion by Justice Rodriguez
This is an appeal from sanctions imposed by the Texas Public Utility Commission
(PUC or the Commission) against attorney appellants, W. Scott McCollough and David
Bolduc, and the telecommunications company they represented in an arbitration before the
Commission. Appellants challenge the final order of the trial court in favor of appellee PUC
dismissing appellants' claims for judicial review of Commission orders assessing sanctions
against appellants.1 Appellants bring four issues on appeal: (1) the trial court erred in
granting the PUC's plea to the jurisdiction and dismissing Bolduc from the case on the
grounds that he suffered no adverse order from which to appeal; (2) the trial court erred
in granting the PUC's motion to dismiss appellants' claims on the basis of collateral
estoppel; (3) the trial court erred in affirming the Commission's sanctions orders on the
merits; and (4) the trial court erred in granting the PUC's plea to the jurisdiction and
dismissing appellants' claims for declaratory judgment. We affirm.
BACKGROUND
This case arises from a mandatory arbitration under the federal
Telecommunications Act of 1996, which delegates authority to the Commission to conduct
arbitrations between incumbent telecommunications companies and startup competitors
negotiating interconnection agreements.2 See 47 U.S.C. § 252(b)(4) (2006); P.U.C. PROC .
R. 21.95. McCollough represented a startup company, Affordable Telecom, in its
1
This case is before us on transfer from the Third Court of Appeals in Austin pursuant to an order
issued by the Suprem e Court of Texas. See T EX G O V 'T C OD E A N N . § 73.001 (Vernon 2005).
2
Under the Telecom m unications Act, incum bent local exchange carriers have a duty to negotiate
agreem ents with new carriers for interconnection to the local exchange carrier's network. 47 U.S.C. §
251(c)(1) (2006). An incum bent local exchange carrier is defined as the local exchange carrier that "on
February 8, 1996, provided telephone exchange service" in a particular area and "was deem ed to be a
m em ber of the exchange carrier association" or "is a person or entity that, on or after February 8, 1996,
becam e a successor or assign of a m em ber of the exchange carrier association." Id. § 251(h)(1). The
incum bent carrier has a duty to provide to any requesting carrier interconnection with the local network:
for the transm ission and routing of telephone exchange service and exchange access . . . at
any technically feasible point within the carrier’s network . . . that is at least equal in quality
to that provided by the local exchange carrier to itself or to any subsidiary, affiliate, or any
other party to which the carrier provides interconnection . . . on rates, term s, and conditions
that are just, reasonable, and nondiscrim inatory . . . .
Id. § 251(c)(2).
2
arbitration with Southwestern Bell Telephone (SBC).3 During the arbitration, a discovery
dispute arose between the parties. Affordable claimed that customer information sought
by SBC through discovery contained protected, private information and objected to
production of the information.
After filing Affordable's objections, McCollough sent an email to counsel for SBC
conveying his disappointment with the situation. The email contained several inflammatory
statements, including the following: "I guess I have to no longer be open, honest, and
forthcoming with you—or any other SBC counsel—in the future"; "SBC apparently is wholly
invested in making sure the system does not work, and it hires unethical lawyers to make
it so"; and "When I was in the Marines, the first thing they taught me [was] that if the enemy
is in your range, then you are in the enemy's range as well. Keep that in mind, culo." SBC
then filed a motion to compel production of the information Affordable claimed it could
withhold.
The arbitrators issued an order granting portions of SBC's motion to compel. In
response to the order, Bolduc emailed the arbitrators to inform them that Affordable would
be appealing the order compelling production of certain customer information.4 The email
also informed the arbitrators that Affordable had posted a warning to its customers on its
website advising them of the nature of the ordered disclosure. The warning was titled
"Urgent Privacy Statement" (Privacy Statement) and read in relevant part:
3
The m erits of that proceeding are not at issue in this appeal.
4
Bolduc was hired by Affordable to assist in drafting the appeal of the arbitrators' order com pelling
production.
3
Consistent with [our privacy] policy, we are providing NOTICE to you
that we have been ordered by the Texas PUC to disclose to
Southwestern Bell Telephone ALL the information we have about you,
including the services we provide to you and your use of them, and
also including the content of communications you have sent or
received while using our service—to the extent we have it in our
possession. We are also providing you with an opportunity to protect
your privacy rights. . . .
We cannot recommend that you directly contact the PUC. First, that will
necessarily reveal your identity to some extent. Further, we are prohibited
by law from suggesting that non-parties to the case submit comments or
information unless they follow several complicated filing requirements
normally not reasonably available to the public, and also provide an official
copy of the communication to SBC.
Nonetheless, since this is your information—which we believe we merely
possess and do not control—in the interest of complete disclosure we do
provide the following information:
Case Docket 29415, CARY FITCH d/b/a FITCH AFFORDABLE TELECOM
PETITION FOR ARBITRATION AGAINST SBC TEXAS UNDER § 252 OF
THE COMMUNICATIONS ACT.
[contact information for arbitrators, including phone numbers and email
addresses]
[contact information for Commissioners, including phone numbers and email
addresses]
If you do contact the PUC then please be sure to mention the Docket
number so they will know what case you are discussing. If you wish to
formally intervene in the case to protect your privacy, then seek input from
the Commission on how to do so. Even though this issue directly involves
your personal and private information—which in our opinion you, and not we,
control—we cannot provide you legal advice about how to protect your
privacy and property.
It is undisputed that McCollough, alone, drafted the Privacy Statement.
Subsequent to the posting of the Privacy Statement, SBC filed a motion for
sanctions against Affordable and its attorneys (appellants) with the arbitration tribunal.
4
SBC alleged that Affordable and appellants: (1) solicited ex parte communications
intended to improperly influence the arbitrators through the Privacy Statement posted on
Affordable's website; (2) made false and misleading representations in the Privacy
Statement; and (3) otherwise violated standards of conduct related to dignity, courtesy, and
respect for persons participating in the proceedings. After a hearing on the motion for
sanctions, the arbitrators issued an order imposing sanctions on McCollough for soliciting
ex parte communications, making false and misleading statements to Affordable's
customers, and engaging in abusive conduct by sending an email to counsel for SBC that
violated the Commission's standards of conduct.5 The order required McCollough to pay
SBC's expenses related to his misconduct and excluded McCollough from further
participation in the arbitration. The order expressly declined to impose sanctions against
Bolduc and Affordable because the arbitrators found insufficient evidence of their
involvement with the Privacy Statement or McCollough's misconduct.
Affordable and appellants appealed the arbitrators' sanctions order to the
Commission. The Commission heard oral argument on the appeal and issued an order
denying Bolduc's appeal and granting in part and denying in part the appeals of
McCollough and Affordable. In its order on appeal, the Commission upheld the portion of
the sanctions order finding that McCollough had solicited ex parte communications but
declined to find that the false and misleading statements made by McCollough in the
Privacy Statement were a separate sanctionable action. The order on appeal reversed the
5
The order also noted McCollough's continuing m isconduct throughout the proceedings, including
com bative and inflam m atory statem ents made by McCollough in Affordable's petition, despite explicit warnings
and adm onitions by the arbitrators to all parties during the proceedings.
5
portion of the order finding that McCollough's email was sanctionable conduct. The
Commission concluded that the sanctions order properly required McCollough to pay
SBC's expenses but reversed the portion of the order excluding McCollough from
participation in the arbitration.
McCollough then sued the PUC in state district court, seeking reversal of the
Commission's sanctions orders and/or declaratory relief that the Commission lacked the
authority to sanction McCollough and declaratory relief that the Commission violated
McCollough's constitutional rights; Bolduc intervened in the lawsuit. In response, the PUC
filed two pleas to the jurisdiction, one disputing Bolduc's right to appeal the sanctions
orders and another contending that McCollough's claims for declaratory relief were
redundant of his other claims.
Meanwhile, McCollough filed a lawsuit on behalf of Affordable challenging both the
sanctions orders and the order on the merits of interconnection arbitration. Because it
challenged the merits in addition to the sanctions, Affordable's suit was removed to federal
court. See 47 U.S.C. § 252(e)(6) (2006). Affordable filed an amended complaint in federal
court, which expressly addressed the sanctions orders. The portion of Affordable's federal
complaint regarding the sanctions orders was almost identical to McCollough's state court
petition. After the federal complaint was filed, the sanctions issue was also fully briefed to
the federal court. McCollough signed both the petition and the briefing. The federal court
retained all issues, including the challenge to the sanctions orders.
After a hearing at which McCollough argued against the sanctions orders, the
federal court issued an order affirming the Commission's decision in Affordable's case in
all respects and dismissing Affordable's claims against the PUC with prejudice. The order
6
addressed the sanctions issue, concluding that Affordable's argument that the Commission
was without authority to issue sanctions was meritless. Specifically, the order stated that
the Commission "did not exceed its authority as a quasi-judicial body when it imposed
sanctions on [Affordable]'s counsel . . . ." The order also rejected the constitutional
challenges–-free speech and right to seek redress of grievances–-to the sanctions orders.
Affordable appealed the court's order to the Fifth Circuit. However, its appeal did
not address the sanctions issue; it complained of neither the jurisdiction of the federal court
to hear the sanctions issue nor the ruling of the court affirming the Commission's decision
in the case. The appeal only complained of the court's ruling on the merits order regarding
the interconnection agreement.
Subsequent to the federal court's order, the state district court issued a scheduling
order in McCollough's lawsuit, setting the case for trial. The PUC then filed a motion to
dismiss McCollough's state case on the grounds that the federal court's decision regarding
the sanctions orders collaterally estopped McCollough's state court lawsuit. After a
hearing, the state court issued a final judgment, in which it: (1) granted the PUC's plea to
the jurisdiction regarding McCollough's claims for declaratory relief and dismissed those
claims; (2) granted the PUC's plea to the jurisdiction regarding Bolduc's right to appeal the
sanctions order and dismissed Bolduc from the case; (3) granted the PUC's motion to
dismiss McCollough's suit on the basis of collateral estoppel; and (4) "[a]lternatively,"
affirmed the Commission's sanctions orders on the merits. The final judgment ordered that
McCollough and Bolduc were "DENIED all relief sought by their suit" and "finally disposed
of all parties and claims." (emphasis in original). This appeal ensued.
7
II. DISCUSSION
By four issues, appellants contest the trial court's judgment. First, appellants argue
that the trial court erred in concluding that Bolduc has no standing to appeal the
Commission's sanctions order. Second, appellants contend that the trial court erred in
applying the doctrine of collateral estoppel to bar appellants' challenge to the sanctions
order on the basis of a federal lawsuit to which they were not parties. Third, appellants
argue that the trial court erred in affirming the Commission's sanctions order on the merits.
Finally, appellants challenge the trial court's dismissal of appellants' claims for declaratory
relief regarding the regulatory procedures and constitutional implications that should have
governed the PUC's telecommunications arbitration procedures.
A. The Court's Jurisdiction Over Bolduc
First, appellants complain that the trial court erred in granting the PUC's plea to the
jurisdiction, which dismissed Bolduc from the case on the grounds that he had no standing
to appeal from a sanctions order that did not assess sanctions against him.6
1. Standard of Review and Applicable Law
"A plea to the jurisdiction challenges the trial court's authority to consider the subject
matter of a claim." Tex. Dep't of Transp. v. Garcia, 243 S.W.3d 759, 761 (Tex.
App.–Corpus Christi 2007, pet. filed) (citing Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547,
554 (Tex. 2000)). Whether a court has subject matter jurisdiction is a question of law and
is subject to de novo review. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217,
6
Although appellants characterize this argum ent as an issue of standing, whether or not Bolduc was
an aggrieved party who was entitled to appeal the sanctions order is a question of justiciable interest. See
County of El Paso v. Ortega, 847 S.W .2d 436, 441-42 (Tex. App.–El Paso 1993, no writ).
8
226 (Tex. 2004). When reviewing a trial court's ruling on a plea to the jurisdiction, we will
consider the plaintiff's pleadings and factual assertions and the evidence submitted by the
parties relevant to the jurisdictional issue. Garcia, 243 S.W.3d at 761.
"It is a fundamental principle of appellate review that a party on appeal may not
complain of errors that do not injuriously affect him . . . ." County of El Paso v. Ortega, 847
S.W.2d 436, 441 (Tex. App.–El Paso 1993, no writ) (citing Buckholts Indep. Sch. Dist. v.
Glaser, 632 S.W.2d 146, 150 (Tex. 1982)). Only an aggrieved party may appeal the trial
court's judgment; "an aggrieved party is one who has an interest recognized by law" that
was adversely affected by the judgment. Id. at 442 (citing S. Nat'l Bank of Houston v. City
of Austin, 582 S.W.2d 229, 235 (Tex. Civ. App.–Tyler 1979, writ ref'd n.r.e.)). Moreover,
a party generally "appeals from a judgment and not from a finding or conclusion in support
of the judgment." Champlin Exploration, Inc. v. R.R. Comm'n of Tex., 627 S.W.2d 250,
251 (Tex. App.–Austin 1982, writ ref'd n.r.e.); C.O.N.T.R.O.L. v. Sentry Envtl., L.P., 916
S.W.2d 677, 679 (Tex. App.–Austin 1996, writ denied). If a party prevailed at the lower
level, he may not appeal the judgment merely for purpose of striking findings and
conclusions with which he does not agree. Champlin, 627 S.W.2d at 251; see State v.
Leutwyler, 979 S.W.2d 81, 83 n.2 (Tex. App.–Austin 1998, no pet.) (reasoning that an
order not adverse to a particular party would not be appealable by that party).
2. Analysis
Appellants contend that, even though the Commission's order did not impose
sanctions against Bolduc, the language of the sanctions order raises doubts about Bolduc's
9
ethics and judgment that damage his reputation as a lawyer. The sanctions order issued
by the arbitrators reads in relevant part:
This order does not impose sanctions on David Bolduc . . . . The Arbitrators
do not find sufficient evidence to support sanctions against Bolduc.
Testimony at the hearing on the motion for sanctions indicated that Bolduc
only had a marginal role in the development of [Affordable]'s Emergency
Appeal. Bolduc testified that he had essentially "cut and pasted" the
Emergency Appeal together from prior pleadings drafted by McCollough after
a cursory review of those prior pleadings. Furthermore, McCollough and not
Bolduc apparently drafted the Privacy Statement. The contents of
[Affordable]'s pleadings and the Privacy Statement reflect McCollough's work
rather than Bolduc's since Bolduc had "cut and pasted" McCollough's prior
pleadings to create the Emergency Appeal.
(internal citations omitted). McCollough and Bolduc appealed the arbitrators' order to the
Commission, which issued an order on appeal that reads in relevant part:
[T]he Commission upholds the portion of [the sanctions order] that found
insufficient evidence to support sanctions against Bolduc. . . . The
Commission agrees with the Arbitrators that there was not sufficient
evidence to support sanctions against Bolduc, but also agrees that there was
at least a scintilla of evidence of sanctionable conduct . . . . The Commission
finds that there is at least some evidence of Bolduc's involvement in the
solicitation of ex parte communications via the Privacy Statement. Bolduc
was responsible for sending an e-mail to Arbitrators and other parties with
a hyperlink to the webpage that contained the Privacy Statement. The
Commission finds that Bolduc should have more thoroughly vetted the
privacy notice, of which he had knowledge, and as an attorney objected to
its form or content. The Commission further agrees with the Arbitrators that
the contents of Affordable Telecom's pleadings and the Privacy Statement
reflected McCollough's work rather than Bolduc's. Therefore, the
Commission finds that the Arbitrators were correct in their review of the
evidence in the record, and that Bolduc should not be subject to sanctions
as a result of his involvement in the filing of Affordable Telecom's Emergency
Appeal.
Appellants complain that the Commission tarnished Bolduc's reputation by finding that:
there was "at least a scintilla of evidence of sanctionable conduct;" there was "at least
some evidence of Bolduc's involvement in the solicitation of ex parte communications;" and
10
that "as an attorney," Bolduc should have objected to the "form or content" of the Privacy
Statement.7 We disagree.
Read in context, the phrases lifted by appellants from the order do not adversely
affect Bolduc's interests. See Ortega, 847 S.W.2d at 442. Rather, the observations that
there was "at least a scintilla" or "some evidence" of Bolduc's involvement are merely the
findings of the Commission made as a part of their ultimate determination that there was
insufficient evidence to support sanctions against Bolduc. When the Commission declined
to assess sanctions, Bolduc became a prevailing party, and he cannot now contest the
Commission's findings and conclusions with which he disagrees. See Champlin, 627
S.W.2d at 251. We decline today to conclude that the mild phrasing used by the
Commission was sufficiently harsh to vest in Bolduc a right to appeal an order that failed
to impose the sanctions sought by the adverse party, i.e. an order in which Bolduc
prevailed. See Ortega, 847 S.W.2d at 442; C.O.N.T.R.O.L., 916 S.W.2d at 679 (holding
that a party generally appeals from a judgment and not merely the findings and conclusions
of the court). Instead, we conclude that Bolduc was not an aggrieved party because he
had no interest adversely affected by the Commission's order, and therefore, the trial court
7
As support for this argum ent, appellants direct us to a line of federal cases standing for the general
proposition that a court's reprim and of an attorney, short of m onetary sanctions, could be sufficient to create
a right to appeal. See, e.g., W alker v. City of Mesquite, 129 F.3d 831, 832-33 (5th Cir. 1997) (holding that an
attorney had a right to appeal where the district court sternly reprim anded him on the record and found him
guilty of blatant m isconduct); Sullivan v. Comm. on Admissions & Grievances of the U.S. Dist. Ct. for the Dist.
of Columbia, 395 F.2d 954, (D.C. Cir. 1967) (concluding that an attorney had standing to appeal where the
district court determ ined the attorney was guilty of proscribed conduct and adm onished him in a m em orandum
opinion). W e m ust note at the outset that these cases are not binding on this Court. And even if they were,
the cases are entirely distinguishable from this appeal. Here, Bolduc was never reprim anded by the arbitrators
or the Com m ission. The findings m ade in the arbitrators' sanctions order and the Com m ission's order on
appeal do not rise to the level of the serious, form al reprim ands and adm onishm ents delivered by the federal
courts in the cited line of cases. W e, therefore, do not find appellants' authority to be persuasive in our
determ ination of their first issue.
11
did not err in granting the PUC's plea to the jurisdiction and dismissing Bolduc from the
case. See Ortega, 847 S.W.2d at 442. Appellants' first issue is overruled.
B. Collateral Estoppel
In its second issue, appellants contend that the trial court erred in granting the
PUC's motion to dismiss appellants' claims on the basis of collateral estoppel. The
doctrine of collateral estoppel, or issue preclusion, prevents a party from relitigating a
particular issue that the party already litigated and lost in an earlier suit. State & County
Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001). Collateral estoppel is an
affirmative defense, and to prove it, a party must establish that: (1) the same issues
sought to be litigated in the second suit were fully litigated in the first suit; (2) those issues
were essential to the judgment in the first suit; and (3) the parties were cast as adversaries
in the first suit. Tex. Dep't of Pub. Safety v. Petta, 44 S.W.3d 575, 579 (Tex. 2001); Sysco
Food Servs. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1994).
1. Fully and Fairly Litigated
To meet the first prong, the particular issue in the current case must have been
actually litigated in the earlier proceeding, which means that the issue was raised by the
pleadings or otherwise submitted for determination and was determined by the fact finder.
Rexrode v. Bazar, 937 S.W.2d 614, 617 (Tex. App.–Amarillo 1997, no writ) (citing Van
Dyke v. Boswell, O'Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985)). The
issue decided in the first suit must be identical to the issue in the pending suit and must
have been fully and fairly litigated in the first suit. Miller, 52 S.W.3d at 696.
12
Here, McCollough's state court petition raised the following issues: whether the
PUC had authority to issue sanctions in the context of a telecommunications arbitration;
whether there was sufficient evidence of McCollough's intent to solicit ex parte
communications; whether there was sufficient evidence that the Privacy Statement was
intended to be false and misleading; whether the Privacy Statement was protected speech;
whether the sanctions order complied with contested case procedures; whether the
sanctions order violated Commission rules and due process; and whether the sanctions
order complied with general procedural requirements applicable to sanctions orders.8 In
its motion to dismiss, the PUC presented evidence that the issues raised in Affordable's
federal complaint were virtually identical to McCollough's issues in this case.9 Moreover,
there is evidence in the record that the sanctions issue was fully briefed and argued by
McCollough in a hearing before the federal court. The order of the federal court specifically
addressed the sanctions orders and then affirmed the decisions of the Commission in their
entirety. Although Affordable challenged the court's decision on the merits of the
arbitration in an appeal to the Fifth Circuit, it failed to contest the order with regard to the
sanctions issue. We conclude that—because the issues raised by McCollough in his state
case were raised by the pleadings in the federal case and because the issues were fully
briefed and argued before and determined by the federal court—McCollough's state court
8
McCollough's state court petition also raised the issue of whether the sanctions order com plied with
the Texas Open Meetings Act. However, McCollough does not advance this argum ent on appeal.
9
The issues argued in Affordable's federal com plaint are as follows: that the PUC erred in not
following contested case procedures; that the PUC had no authority to sanction non-public utility parties or
attorneys who represent those parties; that the sanctions order had no basis in law or fact, i.e. that there was
no evidence of any intent to solicit ex parte com m unications or m ake false and m isleading statem ents; that
the sanctions order violated free speech rights; that the sanctions order violated the right to petition the
governm ent for redress of grievances, i.e. due process rights; and that the PUC did not com ply with general
procedural requirem ents applicable to sanctions orders.
13
issues regarding the sanctions orders, identical to the issues disposed of by the federal
court, were actually litigated in an earlier proceeding, and the PUC, therefore, satisfied its
burden of proof on the first prong. See Rexrode, 937 S.W.2d at 617; Miller, 52 S.W.3d at
696.
2. Essential to the Prior Judgment
To meet the second prong of the collateral estoppel test, the PUC must prove that
the issues litigated in the earlier case, identical to the issues in the pending case, were
essential to the prior judgment. Eagle Prop., Ltd. v. Scharbauer, 807 S.W.2d 714, 721-22
(Tex. 1990). "'If a judgment of a court of first instance is based on determinations of two
issues, either of which standing independently would be sufficient to support the result, the
judgment is not conclusive with respect to either issue standing alone.'" Id. at 722 (quoting
RESTATEMENT (SECOND ) OF JUDGMENTS § 27 cmt. i (1982)). In other words, if the judgment
from the earlier proceeding includes alternative holdings, each of which could
independently support the outcome of the prior case, one of those holdings, if raised in a
subsequent law suit, would not have a preclusive effect on the pending case. See id.
We find no such alternative holdings here. In its motion to dismiss, the PUC offered
as evidence the order of the federal court, which affirmed in its entirety the Commission's
decision regarding Affordable's arbitration with SBC. The Commission's decision included
the disposition of two distinct issues: (1) the Commission's sanctions orders, and (2) the
Commission's decision on the merits of SBC and Affordable's interconnection agreement.
The evidence showed that both issues were briefed, argued, and decided by the federal
court and each was necessary to the court's judgment. The issues were not independent
grounds that, standing alone, could have supported the federal judgment; the federal
14
court's resolution of the sanctions issue was not an alternative holding for its decision on
the merits issue and vice versa. See id. Therefore, we conclude that the issues decided
by the federal court regarding the sanctions order were essential to its judgment and that
McCollough is precluded from relitigating the same issues in his state court case. See id.
The second prong has been met.
3. Parties Cast as Adversaries
The third and final element of the collateral estoppel affirmative defense requires
that the parties to the pending case were cast as adversaries in the first proceeding.
Trapnell, 890 S.W.2d at 801.
Due process requires that the rule of collateral estoppel operate only against
persons who have had their day in court either as a party to the prior suit or
as a privy, and, where not so, that, at the least, the presently asserted
interest was actually and adequately represented in the prior trial.
Scharbauer, 807 S.W.2d at 721 (quoting Benson v. Wanda Petroleum Co., 468 S.W.2d
361, 363 (Tex. 1971)). In other words, collateral estoppel precludes relitigation of a
particular issue when the party against whom the doctrine is asserted "had a full and fair
opportunity to litigate the issue in the prior suit." Id. (quoting Tarter v. Metro. Sav. & Loan
Ass'n, 744 S.W.2d 926, 927 (Tex. 1988)).
Strict mutuality of parties is not required. Trapnell, 890 S.W.2d at 801. Rather, if
a person was not a party to the prior action, he is nonetheless bound by the earlier
judgment if he is in privity with the party in the prior case. Benson, 468 S.W.2d at 363.
We have recognized that there is no generally prevailing definition of privity. Olivarez v.
Broadway Hardware, Inc., 564 S.W.2d 195, 199 (Tex. Civ. App.–Corpus Christi 1978, writ
ref'd n.r.e.). "The determination of who are privies requires careful examination into the
15
circumstances of each case." Benson, 468 S.W.2d at 363. If a person is not a party but
instead controls an earlier action, he is bound by its outcome where he has a proprietary
or financial interest in the prior judgment. Id. at 363-64. In sum, privity refers to a person
who is so connected in law with a party to the prior judgment that the party to the judgment
represented the same legal right in which the person had an identical interest. Id.
Here, McCollough argues that the PUC cannot establish the third element of its
affirmative defense because McCollough's relationship to Affordable as its counsel in the
federal court case does not put him in privity with Affordable and, thus, adverse to the
PUC. We disagree. The record shows that Affordable's interests in the federal case arose
from the same sanctions orders that McCollough now challenges in state court. Although
McCollough was not a party to the federal case, he did control the course of the
proceedings; the PUC presented evidence in its motion to dismiss that he signed the
complaint and briefing and argued the case before the federal court. As previously
discussed, the Commission's orders imposed sanctions against McCollough alone. Thus,
he had both a proprietary and financial interest in the federal court's judgment on the
sanctions orders. See id. Moreover, we conclude that McCollough, the party against
whom the defense of collateral estoppel is asserted, had a fair opportunity to argue against
the sanctions orders in the earlier proceeding. See Scharbauer, 807 S.W.2d at 721. We
conclude that McCollough's interest in the federal case was identical to Affordable's, and
the judgment of the federal court directly affected his legal rights. See Benson, 468
S.W.2d at 363. Because McCollough's interests were represented through Affordable, he
16
was in privity with Affordable and is precluded from relitigating the same issues in this
case. See id.
Based on the foregoing, we conclude that the federal court's order regarding the
Commission's sanctions orders collaterally estops McCollough's identical claims in this
case. McCollough's second issue is overruled. In light of our disposition of this issue, we
do not reach McCollough's third issue contesting the merits of the sanctions orders.10 TEX .
R. APP. P. 47.1.
III. CONCLUSION
The judgment of the trial court is affirmed.
NELDA V. RODRIGUEZ
Justice
Memorandum Opinion delivered and
filed this 20th day of August, 2009.
10
Moreover, we conclude that appellants' claim s for declaratory relief regarding the authority of the
Com m ission to im pose sanctions and constitutional violations do not raise any new issues not already
addressed by our decision to give collateral estoppel effect to the federal court order, which disposed of the
issues for which appellants also seek declaratory relief. In other words, we need not engage in a second
analysis of the sam e basic issues m erely because appellants recast their claim s as a request for declaratory
judgm ent. See T EX . R. A PP . P. 47.1. W e, therefore, do not reach appellants' fourth issue. See id.
17