Court Opinion

ID: 9481585
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:24:46.591516+00
Date Added: 2024-06-11T17:48:26.447218
License: Public Domain

JOHNSON, Circuit Judge,
concurring in part and dissenting in part:
The doctrine of stare decisis serves laudable goals: it preserves the consistency of court opinion and ensures that the law does not change from moment to moment. The doctrine does not stand, however, as an insurmountable bar to the critical reexamination of flawed precedent. Stare decisis prevents change for the sake of change; it does not prevent any change at all. Unable to agree that the doctrine of stare decisis requires that this Court acquiesce in its prior decision in Falconer v. Soltex Polymer Corp., 886 F.2d 1312 (5th Cir.1989) (per curiam), I respectfully dissent from the majority’s disposition of the plaintiff’s breach of oral contract claim.
The general rule in this Circuit is that one panel cannot overturn the decisions of a prior panel. See Wilson v. Taylor, 658 F.2d 1021, 1034 (5th Cir.1981); Hodge v. Seiler, 558 F.2d 284, 287 (5th Cir.1977); Puckett v. Commissioner, 522 F.2d 1385, 1385 (5th Cir.1975). This formulation of the stare decisis doctrine applies even in cases in which state law supplies the sub*467stantive rule of decision. Thus, prior interpretations of state law are equally as binding as prior interpretations of federal law. Broussard v. Southern Pac. Transp. Co., 665 F.2d 1387, 1389 (5th Cir.1982) (en banc). In diversity cases, however, an exception to the general rule is sometimes applicable: if a prior decision of this Court conflicts with a subsequent state court decision, then this Court must follow the subsequent state court decision. Farnham v. Bristow Helicopters, Inc., 776 F.2d 535, 537 (5th Cir.1985). In the instant case, a subsequent state court decision is determinative; the decision in Falconer v. Soltex Polymer Corporation is not.1
The facts in Falconer were simple. Sol-tex Polymer Corporation discharged one of its employees, Emmett Falconer, allegedly because Falconer refused to submit to a drug screening test. Falconer filed an action in Texas state court claiming that Sol-tex breached an oral employment contract which provided that Falconer would have employment for so long as he “obeyed the company rules and did his job.” After removal to federal court, the district court granted summary judgment in Soltex’s favor. In an unpublished opinion,2 a panel of this Court ruled that the Texas statute of frauds precluded the enforcement of an oral employment contract “for an indefinite term.” Falconer, No. 89-2216, at 10.3
The panel in Falconer misinterpreted Texas law. At least two Texas appellate courts already had determined, in situations indistinguishable from Falconer, that the statute of frauds did not apply to oral agreements which promised employment for so long as an employee performs satisfactorily. McRae v. Lindale Indep. School Dist., 450 S.W.2d 118, 124 (Tex.Civ.App.—Tyler 1970, writ ref’d n.r.e.); Hardison v. A.H. Belo Corp., 247 S.W.2d 167, 168-69 (Tex.Civ.App.—Dallas 1952, no writ). And moreover, the Texas Supreme Court already had expressly rejected the reasoning in Falconer that indefinite term oral employment contracts were unenforceable. Miller v. Riata Cadillac Co., 517 S.W.2d 773, 775 (Tex.1974) (“indefinite term employment contracts ... are considered performable within one year and therefore do not fall within the Statute of Frauds.”); Bratcher v. Dozier, 162 Tex. 319, 346 S.W.2d 795, 796 (1961) (“The agreement in question is a simple contract of employment for an indefinite period of time. Generally, where no period of performance is stated in such contracts the statute is inapplicable.”).
As might be expected, Falconer cited neither the McRae and Hardison line of cases nor the Miller and Bratcher line of cases. The opinion in Falconer instead relied upon three inapposite Texas court of appeals decisions: Stiver v. Texas Instru*468merits, Inc., 750 S.W.2d 843 (Tex.App.—Houston [14th Dist.] 1988, no writ); Benoit v. Polysar Gulf Coast, Inc., 728 S.W.2d 403 (Tex.App.—Beaumont 1987, writ ref'd n.r.e.); Molder v. Southwestern Bell Telephone Co., 665 S.W.2d 175 (Tex.App.—Houston [14th Dist.] 1983, writ ref’d n.r.e.). Two of these cases — Stiver and Molder — involved an oral employment contract that contained a specific term of duration, not an indefinite term of duration. The third case — Benoit—involved a promise of “lifetime employment,” which is entirely distinguishable from a promise of employment “for so long as an employee performs satisfactorily.” See Majority Opinion at 463 n. 5 (the mere possibility of termination as a result of death does not render statute of frauds inapplicable). The Falconer decision, in sum, finds little support in Texas case law.4
Recent opinions of the Texas appellate courts confirm that Falconer is an aberration. In Morgan v. Jack Brown Cleaners, Inc., 764 S.W.2d 825 (Tex.App.—Austin 1989, writ denied), for example, the Austin Court of Appeals reaffirmed the established conclusion that the statute of frauds “does not bar indefinite term contracts.” Id. at 827. The court of appeals reasoned that a trial court should not grant summary judgment on the basis of the statute of frauds unless the evidence establishes conclusively that the “employment contract must have lasted longer than one year.” Id.
The opinion in Morgan is dated January 11, 1989, several months before the opinion in Falconer was released. Accordingly, Morgan itself is not a subsequent state court decision that would authorize a departure from Falconer. See Broussard, 665 F.2d at 1389-90. The reasoning in Morgan was reemphasized, however, in a state court decision that is indeed subsequent to Falconer. In Winograd v. Willis, 789 S.W.2d 307 (Tex.App.—Houston [14th Dist.] 1990, writ denied), the Fourteenth District Court of Appeals in Houston acknowledged that “[t]he statute of frauds bars only those contracts which must last longer than one year.” Id. at 311. While Winograd may be factually distinguishable from the instant case,5 it nonetheless reaffirms the principles in Morgan and should not be ignored.
This writer is a strong believer in the doctrine of stare decisis. See League of United Latin American Citizens Council No. 4434 v. Clements, 914 F.2d 620, 653 n. 3 (5th Cir.1990) (Johnson, J., dissenting). In this case, however, I am convinced that a blind acquiescence to Falconer is a disservice to the Texas bench and bar, which has strived to formulate a workable articulation of the statute of frauds. The binding precedent in the instant case should be Morgan, as interpreted through Winograd, and not Falconer. I therefore dissent from the majority's disposition of the plaintiffs breach of oral contract claim. On all other claims, I concur with the majority opinion.

.The majority concluded that the decision in Falconer is binding precedent because its interpretation of the Texas statute of frauds states an "alternative holding.” Majority Opinion at 465. In Falconer, the Court reasoned that the employee had failed to produce any evidence to support the existence of an oral agreement. The Falconer Court then suggested that even if the employee had produced evidence of an oral contract, the contract “would have been barred by the statute of frauds.” Unlike the majority, this writer is not entirely convinced that the Falconer interpretation of the statute of frauds is an alternative holding. A decision that states an alternative holding typically does not predicate one legal conclusion upon the absence of another; such a decision instead states its legal conclusions as "A or B." Both A and B in this situation are clearly “holdings” of the court, either of which might support the court’s judgment. In the Falconer opinion, however, the panel stated its legal conclusions as "A, but if not A, then B.” Under this structure, the only legal conclusion that clearly is a "holding” is A; the B conclusion — in Falconer the statute of frauds conclusion — is merely a hypothetical.

. Falconer is a prime example of the complications caused by this Court’s continued adherence to the rule that unpublished opinions are binding precedent. Loc.R. 47.5.3. Because the opinion in Falconer was unpublished and unavailable, Pruitt in the instant case was completely unaware that this Court interpreted the Texas statute of frauds to preclude the enforcement of "indefinite term” oral contracts. As a consequence, Pruitt could not seek reasonable alternatives to an undesirable judgment in federal court.

. There is little question that the oral agreement in Falconer, as in the instant case, carried an indefinite period of duration: Falconer’s employment could be terminated at any time that his performance became unsatisfactory, whether or not a year had expired.

. For that matter, Falconer finds little support in prior Fifth Circuit interpretations of the Texas statute of frauds. In Mercer v. C.A. Roberts Co., 570 F.2d 1232 (5th Cir.1978), this Court, citing Miller and Bratcher, recognized that "where the time for performance of an oral agreement — including an oral employment agreement — is uncertain and performance can conceivably occur within one year, the statute of frauds is inapplicable, even if performance within the year is highly improbable.” Id. at 1236 (emphasis added). Although Mercer, unlike Falconer, is distinguishable from the instant case, Mercer completes the picture of the aberrational nature of Falconer: every court that has confronted the question, except the Fifth Circuit panel in Falconer, has recognized that the Texas statute of frauds does not render indefinite term contracts unenforceable.

. The employer in Winograd orally agreed to provide employment at "an annual salary of $52,000.” Like the contracts in Miller, Bratcher and Morgan, the contract in Winograd did not state a definite date of termination. As the Winograd court noted, however, Texas law "dictates that a hiring at a stated sum per week, month, or year, is a definite employment for the period named.” 789 S.W.2d at 310. Nonetheless, the Winograd court departed from Falconer in its recognition that the statute of frauds only applies to oral contracts that must last longer than one year, whether or not the contracts state a definite period of duration.