Court Opinion

ID: 4669953
Source: CourtListenerOpinion
Date Created: 2021-03-22 07:15:57.617035+00
Date Added: 2024-06-11T08:01:16.815838
License: Public Domain

IN THE SUPREME COURT OF TEXAS
                                      ══════════
                                        No. 18-0781
                                      ══════════

            ELECTRIC RELIABILITY COUNCIL OF TEXAS, INC., PETITIONER,
                                              v.

 PANDA POWER GENERATION INFRASTRUCTURE FUND, LLC, D/B/A PANDA POWER
                     FUNDS, ET AL., RESPONDENTS
           ══════════════════════════════════════════
                        ON PETITION FOR REVIEW FROM THE
                 COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS
           ══════════════════════════════════════════

                           ~ consolidated for oral argument with ~

                                      ══════════
                                        No. 18-0792
                                      ══════════

IN RE PANDA POWER INFRASTRUCTURE FUND, LLC, D/B/A PANDA POWER FUNDS, ET
                             AL., RELATORS

           ══════════════════════════════════════════
                     ON PETITION FOR WRIT OF MANDAMUS
           ══════════════════════════════════════════

      CHIEF JUSTICE HECHT, joined by JUSTICE GUZMAN, JUSTICE LEHRMANN, and JUSTICE
DEVINE, dissenting.

       The Electric Reliability Council of Texas, Inc.—ERCOT—is the independent system

operator certified by the Texas Public Utilities Commission to oversee the Texas electric power
grid. 1 The Court is asked in this mandamus proceeding 2 to decide whether ERCOT has sovereign

immunity from suit. The parties strenuously disagree. ERCOT agues, of course, that it is immune.

Panda 3 argues, also of course, that ERCOT is not immune. The stakes between them are high—

Panda alleges more than $1 billion in damages; the case has been fully presented; and both parties

want their disagreement resolved. The immunity issue has been important to them since the case

was first filed in the trial court more than five years ago. Now it happens that the public stakes are

high too. After Winter Storm Uri last month, the public also wants to know whether ERCOT can

be sued. Will ERCOT be immune to claims against it for failing to prevent the power outages

across Texas that not only crippled millions of users but resulted in water outages that were at least

as bad, if not worse? The answer to the immunity issue in this case has become perhaps more

important to the public than even to the parties.

         The parties want to know. The public wants to know. The Court refuses to answer.

         The trial court in this case answered. It said ERCOT is not immune. The court of appeals

also answered. It disagreed and directed the trial court to dismiss the case against ERCOT. The

trial court complied. That was in April 2018, nearly three years ago. Panda immediately asked the

court of appeals to set aside its order requiring the trial court to dismiss the case and to direct the

trial court to vacate the dismissal. The court of appeals denied Panda’s motion, and Panda appealed

         1
             See TEX. UTIL. CODE § 39.151(d).
         2
             No. 18-0792. ERCOT’s conditional petition for review in No. 18-0781 raises a different issue.
         3
             “Panda” refers collectively to the thirteen companies that sued ERCOT in the underlying case. See ante at
2 n.1.

                                                                2
the dismissal.

         Four months after the trial court dismissed the case, in August 2018, Panda petitioned this

Court to review the court of appeals’ decision. In February 2019, the Court requested briefing on

the merits, signaling that whether ERCOT is immune from suit is an important issue. The parties

completed the briefing that September. In June 2020, the Court set the matter for oral argument,

another indication that ERCOT’s immunity from suit is an important issue. The Court heard

argument last September.

         And now here we are, five years after this litigation began in the trial court, two-and-one-

half years after the case was filed in this Court, two years after we requested merits briefing, and

six months after oral argument. 4 All agree—the Court and the parties—that the trial court’s

dismissal of the case did not moot the parties’ controversy. The parties have the same real

disagreement they have always had. Both insist they still want an answer. And as circumstances

would have it, the issue has become more important to the public because of the damage caused

by loss of power in the winter storm, which many blame on ERCOT. Whether ERCOT is immune

from suit is not a moot issue, not to the parties, not to the public. But today the Court concludes

that the case before us is something that it calls “procedurally moot” because there is no mandamus

relief that can cause the case to be reopened in the trial court if the court of appeals erred.

         The Court is simply wrong. If the Court were to conclude that ERCOT is not immune from

         4
           The Court blames the delay on the parties, pointing out that in the 31 months this mandamus and the related
petition for review have been pending, the parties asked for sixteen 30-day extensions, which are responsible for 9 of
those 31 months. Ante at 7 n.8. So about one-third of the delay can be charged to the parties and only about two-thirds
to the Court.

                                                               3
Panda’s suit, contrary to the court of appeals’ prior ruling, the Court would direct the court of

appeals to withdraw that ruling, and the Court would also require the court of appeals to reverse

the dismissal it erroneously ordered. Were that not so, courts of appeals could thwart review of

their decisions simply by ordering trial courts to comply with them quickly. And in any event, this

Court could direct the court of appeals to reverse the trial court’s final judgment of dismissal in

the pending appeal of that judgment. The Court does not claim that either form of relief is beyond

its power. It demurs only that “[b]y doing so, we would infringe upon the court of appeals’ judicial

power by reviewing a judgment the court of appeals has not yet had the opportunity to review.” 5

But the court of appeals has already had the opportunity to review the dismissal. Indeed, it was the

court of appeals that ordered the dismissal! And by ruling on immunity, this Court would not be

infringing on the court of appeals’ judicial power. The court of appeals has already ruled on that

issue. There is no reason for the court to reiterate its ruling in a second appeal. It is waiting on this

Court to rule. The Court can resolve the parties’ dispute and grant relief, however it decides the

immunity issue, but instead it chooses delay and wasting more of the parties’ and judicial system’s

time and resources. I would answer the question the Court undertook to decide but now does not.

I respectfully dissent.

                                                   I

        Panda sued ERCOT, contending that it built three power plants in reliance on ERCOT’s

mistaken forecasts of a long-term scarcity of power supply. Panda sued for fraud and negligent

        5
            Ante at 14 n.17.

                                                       4
misrepresentations. ERCOT filed a plea to the jurisdiction asserting sovereign immunity.6 The trial

court denied the plea to the jurisdiction, and ERCOT sought review by interlocutory appeal or,

alternatively, mandamus. The court of appeals held that ERCOT is not a “governmental unit”

entitled to interlocutory appeal 7 but that it does have sovereign immunity. 8 The court dismissed

ERCOT’s appeal for lack of jurisdiction, conditionally granted its petition for mandamus, and

directed the trial court to dismiss the case. 9 Eight days later, the trial court complied.

          A few days after that, Panda asked the court of appeals to direct the trial court to set aside

the dismissal order so it would not foreclose further review. The motion was denied. Panda

appealed the trial court’s final judgment of dismissal and filed a mandamus petition in this Court

challenging the court of appeals’ decision on immunity. 10 The Court ordered full briefing, heard

oral argument, and requested further briefing on mootness.

                                                             II

          Panda and ERCOT both contend, and the Court acknowledges, that the substance of their

dispute over sovereign immunity is not moot. But the Court holds that “the trial court’s entry of a

final judgment rendered these causes procedurally moot”. 11 The Court’s reasons lack merit.

          6
              ERCOT also contends that the Public Utilities Commission has exclusive jurisdiction over Panda’s claims.
          7
              552 S.W.3d 297, 309 (Tex. App.—Dallas 2018) (citing TEX. CIV. PRAC. & REM. CODE § 51.014(a)(8)).
          8
              Id. at 319.
          9
              Id. at 320.
          10
               ERCOT filed a conditional petition for review of the court of appeals’ denial of its right to interlocutory
appeal.
          11
               Ante at 12.

                                                                  5
        The Court says that “the court of appeals cannot . . . order the trial court to reinstate its

earlier order denying ERCOT’s plea to the jurisdiction because that order no longer exists as a

separate order” but rather “has been superseded by and has merged into the trial court’s final

judgment dismissing Panda’s claims.” 12 But the argument is premised on an incomplete reading

of Panda’s prayer for relief. Panda first asks this Court to “direct the court of appeals to set aside

its [own] order mandating dismissal of Panda’s claims”. 13 The Court offers no reason why it cannot

grant that relief, and I see none.

        The Court further reasons that “this Court does not have the power to vacate the trial court’s

final judgment in this proceeding because [Panda’s appeal from that judgment] is currently

pending in the court of appeals.” 14 For that proposition, the Court cites no authority. The pendency

of Panda’s appeal from the trial court’s dismissal should have nothing to do with the Court’s review

of the court of appeal’s decision on immunity. The Court does not explain why Panda cannot seek

relief both by mandamus and appeal when that is exactly what ERCOT has done. Rule 27.3 of the

Texas Rules of Appellate Procedure provides:

        After an order or judgment in a civil case has been appealed, if the trial court
        modifies the order or judgment, or if the trial court vacates the order or judgment
        and replaces it with another appealable order or judgment, the appellate court must
        treat the appeal as from the subsequent order or judgment and may treat actions
        relating to the appeal of the first order or judgment as relating to the appeal of the
        subsequent order or judgment. . . . Any party may nonetheless appeal from the

        12
             Ante at 12–13.
        13
             Panda Merits Br. at 64 (18-0792).
        14
             Ante at 13.

                                                      6
         subsequent order or judgment. 15

The same principles and procedures should apply to mandamus review. The Court should treat

Panda’s petition here as seeking review of the trial court’s dismissal. If the Court determines that

the court of appeals erred in its immunity decision, it could direct the trial court to vacate its

dismissal order. Even if this Court could not itself vacate the trial court’s dismissal, it could

certainly direct the court of appeals to vacate its conditional grant of mandamus relief directing the

trial court to dismiss the case. The practical effect would be the same. Panda’s appeal from the

trial court’s final judgment of dismissal is pending in the court of appeals, abated until this

mandamus proceeding has concluded. If we answered here the question of ERCOT’s immunity,

the court of appeals would decide the pending appeal in accordance with our decision. The Court’s

statement that “any order by this Court would be without practical effect” 16 is just wrong.

         In re Wood 17 should control this case. There, the court of appeals granted mandamus relief

directing the trial court to vacate an order, and the trial court complied. The real party in interest

then sought review of the court of appeals’ ruling by petition for mandamus in this Court. We

granted relief directing the court of appeals to “act in accordance with this opinion.” 18 The Court

         15
             TEX. R. APP. P. 27.3. The Court states that the court of appeals could not have applied Rule 27.3 when the
trial court obeyed its order to dismiss the case “because the appeal was no longer pending”. Ante at 14 n.17. But the
court of appeals retained plenary jurisdiction over the appeal until August 9, 2018—30 days after it denied Panda’s
motion for rehearing. See TEX. R. APP. P. 19.1(b) (providing that the court of appeals’ jurisdiction expires “30 days
after the court overrules all timely filed motions for rehearing or en banc reconsideration, and all timely filed motions
to extend time to file such a motion”).
         16
              Ante at 14.
         17
            140 S.W.3d 367 (Tex. 2004) (per curiam), overruled on other grounds by Robinson v. Home Owners Mgmt.
Enters., Inc., 590 S.W.3d 518 (Tex. 2019).
         18
              Id. at 370.

                                                                7
acknowledges that here, too, “despite the trial court’s entry of its final judgment, a live controversy

exists over whether the court of appeals erred by ordering the trial court to vacate its interlocutory

order denying ERCOT’s jurisdictional plea”. 19 But then the Court concludes that it cannot

determine whether the court of appeals erred because “[t]he trial court here no longer has the power

to act.” 20 With respect, the court of appeals still has the power to act, and if we hold that Panda’s

position on sovereign immunity is correct, then that court can withdraw its own mandamus relief,

effectively reinstating the case and allowing it to continue.

         In sum, the Court can review the immunity issue and other issues in the case and, if Panda’s

position prevails, have the dismissal set aside and the case continue. The proceeding is in no sense

“procedurally moot”.

                                                         III

         The Court’s rule is potentially dangerous. A less sophisticated party in Panda’s shoes might

well reason that a trial court’s compliance with a court of appeals’ directive forecloses further

review and forgo appealing the final judgment. A party with lesser means than Panda has might

not be able to afford two appeals to get one decision. In either situation, the court of appeals will

have precluded this Court’s review of its decision. 21

         19
              Ante at 16.
         20
              Ante at 16.
         21
            The Court fears no dangerous results from its ruling because an interlocutory appeal from an order denying
a governmental unit’s plea to the jurisdiction automatically stays proceedings in the trial court. Ante at 14–15 n.18;
see TEX. CIV. PRAC. & REM. Code § 51.014(a)(8), (b). Of course, the court of appeals held that ERCOT was not a
governmental unit entitled to the appeal and stay, so it is not clear the stay applied. The Court assumes that the
automatic stay applied until the court of appeals issued its opinion and faults Panda for not acting earlier to prevent
the trial court from dismissing the case. But only 11 days after the court of appeals ruled, Panda asked that court to

                                                               8
         Here, the Court’s decision makes no difference because Panda has been careful to appeal

the final judgment, and the same parties can afford to argue the same issues to the same court of

appeals, which can issue the same ruling, from which Panda can seek review, with it and ERCOT

reasserting the same arguments they have made to this Court already in briefs and oral argument,

for the Court to finally decide, maybe only a year or so from now. The Court wastes the parties’,

the court of appeals’, and this Court’s resources, and everyone’s time—to no one’s benefit. 22

         The Court can grant the relief Panda specifically requests against the court of appeals and

therefore should decide the merits of the parties’ dispute. Because it refuses to do so, I respectfully

dissent. 23

withdraw its order requiring dismissal, and had the court granted the motion, the trial court would have been required
to vacate the dismissal. The court of appeals’ refusal to grant Panda’s stay motion can hardly be blamed on Panda.
         22
           The Court says it is concerned that the parties have been put to wasted time and expense, but it can do little
to ameliorate that concern. Ante at 18. The Court ignores the fact that many duplicative proceedings lie ahead because
of today’s decision.
         23
            The concurring opinion accuses this dissent of arguing that whether this proceeding is moot should be
based on public opinion, politics, and the weather. Ante (Blacklock, J., concurring). Of course, we do not. We argue
that this proceeding is not moot for sound, compelling legal reasons. The concurring opinion accuses the dissent of
failing to explain how the law and facts have changed since the winter storm. Ante at 3 (Blacklock, J., concurring).
We think they have not changed at all, and that is the point. The law and facts have not changed one iota since August
2018, when the case was filed in this Court. By not addressing the mootness issue until now, which was in the case
from the very beginning, the Court has increased the expense to the parties and delayed a decision on the immunity
issue, which it should not have done, even if the issue had not become the concern it has. The concurring opinion
points to our decision in In re Hotze, No. 20-0739, ___ S.W.3d ___ (Tex. Oct. 7, 2020). Ante at 3 (Blacklock, J.,
concurring). That is a good example. The petition for mandamus there was filed on September 23, 2020, and decided
on October 7—fourteen days later—because it raised issues concerning the impending general election. The present
case has been pending two-and-one-half years. The concurring opinion offers that the Court should “stick to deciding
cases within our jurisdiction”. Ante at 3 (Blacklock, J., concurring). We completely agree but would add one word:
timely.

                                                                9
                                     ____________________________________
                                     Nathan L. Hecht
                                     Chief Justice

OPINION DELIVERED: March 19, 2021

                                    10