Court Opinion

ID: 2926508
Source: CourtListenerOpinion
Date Created: 2015-09-11 22:31:13.796916+00
Date Added: 2024-06-11T11:35:32.718276
License: Public Domain

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.

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            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.

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