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In the latest victory for tort reformers, the Texas Supreme Court has issued a ruling that supports closer scrutiny of attorney fees in cases where the damages awards have been reduced on appeal. In a breach of agreement case over the handling of bull semen, the state’s highest court for civil cases sent back to a trial court an award of $244,500 in attorney fees after an appellate court lowered the damages award to $16,180 from $111,983 because of a trial court error. Emzy T. Barker v. Walter W. Eckman, No. 04-194 (Texas). The Texas Supreme Court stopped short of creating a rule to calculate attorney fees in future cases, but signaled a shift in how appellate courts approve those fees. “It sends a message to the court of appeals that they need to have more meaningful scrutiny to attorney’s fees awards and not just rubber-stamp them,” said Brett Busby, a partner in the Houston office of Chicago’s Mayer, Brown, Rowe & Maw who represents the petitioners in the case. Useful precedent? The former co-owner of interests in three bulls’ semen sued the operators of a business that boards bulls for miscalculating the sales and storage of the semen. On appeal, the Texas 1st District Court of Appeals in Houston, citing the statute of limitations, threw out all but $16,180 of the damages award but retained the attorney fees. The defendants petitioned the state Supreme Court to reduce those fees. Writing for the state Supreme Court earlier this month, Judge Phil Johnson relied on two legal principles that have never been applied before to attorney fees in Texas, Busby said. The judge found that the appellate court’s reduction of the award affected the jury’s calculation of attorney fees, which presumably could have been determined by looking at the damages. He also found that recalculating attorney fees in this case requires a new review of the evidence, and he sent the case back to the trial, rather than the appellate, court. Hugh Rice Kelly, general counsel for Houston-based Texans for Lawsuit Reform, which intervened in the case, called the ruling a “useful precedent” in limiting exorbitant attorney fees such as those upheld by the appellate court in the recent case. “If that had been allowed to stand, that could have opened the door to what we think is the kind of abusive practice we’re concerned about-namely, cases in which the system is being used primarily to generate legal fees,” he said. Robert Ketchand, a shareholder at Houston’s Boyer & Ketchand who represents the plaintiff, called the ruling a “frustrating outcome.” “It interjects a huge element of uncertainty and undermines finality,” he said, noting that cases could drag out if juries must recalculate attorney fees.

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