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The Texas Supreme Court’s flip-flop regarding whether it has jurisdiction to hear an appeal challenging class certification in a case brought by 20,000 dentists against a software supplier has the dentists’ attorneys crying foul. “It’s like there are two outs in the bottom of the ninth and they turn it around,” says David Dunham, an attorney representing about 5,000 of the dentists. But an attorney who filed an amicus brief on behalf of the Texas Civil Justice League says the supreme court needs to clear up the confusion over its jurisdiction in class certification matters. “We simply need to know what the rules are,” says Shannon Ratliff, a partner in the Austin office of Akin Gump Strauss Hauer & Feld. Citing a lack of jurisdiction, the state’s high court dismissed the defense’s appeal in Schein, et al. v. Stromboe, et al. in August but reversed itself Nov. 8. Acting on a motion for rehearing, the court granted the petition for review. Arguments are set for Feb. 6, 2002. According to the plaintiffs’ brief, the class action was filed in 1997 by one group of dentists who allege that Henry Schein Inc. sold them defective Windows office management software and by another group of dentists who allege they were billed for unsolicited upgrades and enhancements to Schein’s DOS software. The brief also alleges that Schein misrepresented that it would provide “free, unlimited” technical support to its DOS customers. Judge Suzanne Covington of Austin’s 345th District Court certified the two subclasses of dentists in 1999. The 3rd Court of Appeals in Austin affirmed the certification last year. The supreme court has jurisdiction to conduct an interlocutory review of the certification only if it finds that the 3rd Court of Appeals’ decision conflicts with other appellate court rulings in Texas. The court’s turnaround on the jurisdictional issue came after Houston attorney Harry Reasoner, managing partner of Vinson & Elkins, was added to the defense team. Reasoner says he was contacted about the case Aug. 31 and sent a letter agreeing to join the defense Sept. 4. His name appears on the brief filed with the motion for rehearing on Sept. 24. “We were hired for a second opinion, as is often the case when you have litigation of this magnitude,” Reasoner says. Joe Longley, who represents about 15,000 dentists in the case, says the defense didn’t change its legal arguments. “They’re just adding lawyers,” he says. Jerry K. Clements, attorney for the software supplier, says the addition of Reasoner to the defense team isn’t the reason the court changed its mind. “This is an important legal case,” says Clements, a partner in the Dallas office of Locke, Liddell & Sapp and head of the firm’s litigation section. “I’m sure their decision to take it was based on legal issues.” Although prevented by judicial ethics from discussing a specific case, Phillips says the supreme court often changes its mind on a motion for rehearing. It takes four votes to grant a motion for rehearing to review a case. Only eight justices were on the court when it voted to dismiss the Schein appeal Aug. 23. Greg Abbott resigned from the court in June and Gov. Rick Perry appointed his replacement, Xavier Rodriguez, Aug. 28. Justices’ votes to grant a writ of review or refuse to hear a case are not public record. TURN-AROUND The court’s about-face on the jurisdiction issue surprised the plaintiffs’ attorneys. “I am aware of no case where the supreme court has found that it had conflicts [in] jurisdiction for the first time on a motion for rehearing,” says Dunham, a partner in Austin’s Taylor & Dunham. “We and the dentists we represent are just stunned.” Longley, a partner in Austin’s Longley & Maxwell, says the Legislature has refused to change the supreme court’s jurisdiction over interlocutory appeals of class certifications, and the court had indicated it had no jurisdiction. “For them to turn around and say there is jurisdiction is surprising,” he says. Ratliff argues in the amicus brief that Schein presents “clear conflicts” and that the 3rd Court of Appeals’ holding “diminishes” the stricter standards for class certification that the supreme court set last year in Southwestern Refining Co. v. Bernal. Although Bernal requires a trial plan, Schein does not, the brief says. The 3rd Court of Appeals’ “express approval of the trial court’s nonplan to resolve individual damages issues at some future date in an unspecified manner represents a marked return to the ‘certify now and worry later’ approach Bernal rejected,” Ratliff alleges in the brief. The plaintiffs allege in their brief that Schein never asked Covington to enter a trial plan but notes that the judge indicated how the dentists’ claims likely would be tried. Their brief indicates Covington granted certification in 1999 after a rigorous analysis in a five-day evidentiary hearing at which 22 witnesses, most of them former or current Schein employees, testified. The 3rd Court of Appeals held that Covington complied with the supreme court’s directives in Bernal. “Our review of the record suggests that the trial court was indeed diligent in applying the rigorous analysis necessary for class certification. Certainly, there is no indication that the trial court chose to ‘certify now and worry later,’ ” Justice Mack Kidd said in the court’s opinion in which he was joined by Chief Justice Marilyn Aboussie and Justice Bea Ann Smith. The plaintiffs allege in their brief that Schein seeks to overrule more than 100 years of precedent by “relaxing” the supreme court’s conflicts jurisdiction requirement — something that the company failed to accomplish during this year’s session of the Texas Legislature. The brief notes that Clements and Ratliff testified on behalf of the Texas Civil Justice League at a March 28, 2001, hearing of the House Civil Practices Committee in support of H.B. 2072, which would have expanded the court’s jurisdiction over class certification. The bill died in committee. Supreme Court Justice Nathan Hecht also testified at the hearing that the bill eliminating the conflict requirement to determine the court’s jurisdiction was “good,” the plaintiffs allege in their brief. A transcript of Hecht’s testimony to the committee shows that he talked about the supreme court’s difficulty in determining whether it has jurisdiction based on whether a court of appeals has held differently from other appellate courts on an issue. “All of us agree that it probably takes three times as long to decide whether conflict exists, and therefore there’s jurisdiction, than it just does to decide whether to take the case or not,” Hecht testified. State Rep. Fred Bosse, a Houston lawyer who chairs the committee, says he sent a letter to the court inviting the justices to testify on the legislation dealing with jurisdiction. “The [other Texas Supreme Court] judges sent me over,” Hecht says. Hecht says he did not discuss any case at the hearing.

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