“Conspiracy Theory”: Why two appellate justices asked the Supreme Court of Texas to clarify Texas law on civil conspiracy
October 6, 2017Most states treat civil conspiracy as a theory by which a party becomes vicariously liable for the torts directly committed by another. A minority of states treat civil conspiracy as an independent claim for which a party can be liable for damages proximately resulting from the conspiracy, regardless of whether any party directly committed an underlying tort. Although 12 of the 14 Texas courts of appeals have held that a two-year limitations period applies to civil conspiracy—including the First and Fourteenth Court of Appeals in Houston—no court has done so as a result of analyzing whether civil conspiracy is an independent claim.
Recently, a litigant received a second and final extension of a deadline to seek appellate review from the Supreme Court of Texas, to potentially overturn precedent from almost every Texas court of appeals holding that civil conspiracy is governed by a two-year limitations.
The litigant enjoys the unlikely support of two justices from the Fourteenth Court of Appeals, who have expressly asked the high court to “clarify the law” in the “murky area” of whether civil conspiracy is an independent claim that should have its own limitations period, or a theory of vicarious liability with a limitations period that varies based on the underlying tort alleged.
In Agar Corp., Inc. v. Electro Circuits Int’l, LLC et al., the Fourteenth Court of Appeals considered an appeal taken by Agar Corp. from a summary judgment on its allegation of civil conspiracy. The summary judgment was based on prior holdings from both the First and Fourteenth Courts of Appeals that a two-year limitations period applies to civil conspiracy. Agar Corp. argued civil conspiracy is a theory of vicarious liability, not an independent claim, and that the three- or four-year limitations periods for the various torts on which the civil conspiracy was based should apply instead.
Justice William J. Boyce, writing for the unanimous three-justice panel, almost reluctantly noted that “neither the Supreme Court of Texas nor this court sitting en banc” has ever reached a conclusion contrary to the prior holdings, nor had there been any “intervening, material change in the statutory law.” In affirming the summary judgment, the panel concluded it was “bound by prior panel holdings” on the limitations issue.
Agar Corp. promptly entreated all nine justices to rehear the appeal en banc and overturn the prior holdings.
In denying the motion, Chief Justice Kem Thompson Frost concurred and wrote separately in an opinion joined by Justice Tracy Christopher. Chief Justice Frost acknowledged Texas law is “unclear” on the issue of whether civil conspiracy is an independent claim or a theory of vicarious liability: “[T]hough we have no shortage of Texas case law on civil conspiracy, we lack clarity on the nature of it.”
The two justices sided with Agar Corp. on the limitations issue in theory. Chief Justice Frost agreed that it would “strike most as bizarre and bewildering” to allow, for example, a 15-year limitations period for claimants to seek relief for battery arising out of sexual assault of a child, but only a two-year limitations period to seek relief for civil conspiracy to commit that same battery.
But Chief Justice Frost explained that a departure from prior holdings could not practically be made in Agar Corp.’s case by the Fourteenth Court of Appeals—which shares appellate jurisdiction and a courthouse with the First Court of Appeals.
“For these atypical courts,” Chief Justice Frost wrote, “conflicts in the law are more complicated and more costly” for advocates and trial judges who do not know which intermediate appellate court sitting in Houston may be assigned to review a ruling on the limitations issue.
The two justices concluded that the “better course is to promote predictability in the law by sticking with” the prior holdings—“even though it is the lesser option”—and nudged the Texas Supreme Court to bring “clarity to this muddled area of Texas law” instead.
Come December 8, the Supreme Court of Texas will likely have its formal invitation to do just that. If it accepts, the outcome stands to fundamentally change the nature of conspiracy claims in Texas, in terms of both the time period in which they must be brought and whether a party can be liable for conspiracy without a finding of liability on an underlying tort.