Qatar Foundation for Education, Science and Community Development v. Ken Paxton, Texas Attorney General and Zachor Legal Institute ( 2020 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-20-00129-CV
Qatar Foundation for Education, Science and Community Development, Appellant
v.
Ken Paxton, Texas Attorney General; and Zachor Legal Institute, Appellees
FROM THE 200TH DISTRICT COURT OF TRAVIS COUNTY,
NO. D-1-GN-18-006240, THE HONORABLE KARIN CRUMP, JUDGE PRESIDING
ORDER
PER CURIAM
Appellant Qatar Foundation for Education, Science and Community Development
has filed a Rule 24.4(a) motion, requesting that this Court review and reverse the trial court’s
order denying the Foundation’s motion to set a supersedeas bond amount and suspend
enforcement of the judgment that is the subject of this appeal. See Tex. R. App. P. 24.4(a)
(authorizing appellate review of trial court’s ruling on Rule 24 motion seeking to suspend
enforcement of judgment). For the following reasons, we reverse the trial court’s order denying
the Foundation’s motion and order the Foundation to post a bond in the amount of $1,000 to
supersede the judgment. See id. R. 24.4(d) (authorizing appellate court to require changes in trial
court’s order, including posting of bond).
BACKGROUND
The Foundation appeals from the trial court’s grant of Zachor Legal Institute’s
plea to the jurisdiction, which resulted in the dismissal of the Foundation’s case. In the
underlying case, the Foundation sued the Attorney General pursuant to the Texas Public
Information Act (PIA) to prevent disclosure of certain requested records held by Texas A&M
University that the Foundation asserts contain its confidential, sensitive, and trade-secret
information. See generally Tex. Gov’t Code §§ 552.001-.376. The Foundation sought to set
aside portions of the Attorney General’s open-records ruling and to obtain a declaratory
judgment that the requested records were exempt from disclosure under the PIA. The requestor
of the information, Zachor, was not named as a defendant but was provided with notice of the
suit, pursuant to Section 552.325 of the PIA. See id. § 552.325. Zachor intervened in the suit.
The Foundation and Zachor filed cross-motions for summary judgment on the
merits of whether the records at issue are exempt from disclosure. On the morning of the hearing
on the summary-judgment motions, Zachor filed a plea to the jurisdiction, arguing that (1) the
Foundation lacked standing to bring its PIA claim because no provision of the PIA authorizes a
third party that asserts privacy or property interests to file a lawsuit to challenge the Attorney
General’s decision on an open-records ruling and (2) Texas A&M, the governmental body that
had requested the Attorney General’s ruling, was not a party to the lawsuit. After the hearing,
both the Foundation and the Attorney General filed post-hearing briefs opposing the plea to the
jurisdiction, arguing that the plain text of the PIA and the Texas Supreme Court’s precedent in
Boeing Co. v. Paxton support the Foundation’s standing as a third party to bring its claim. See
Boeing Co. v. Paxton, 466 S.W.3d 831 (Tex. 2015). The trial court granted Zachor’s plea to the
jurisdiction and dismissed the case.
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The Foundation filed a motion to supersede the judgment pursuant to Texas Rules
of Appellate Procedure 24.1 and 24.2, arguing that it would be irreparably damaged if the
judgment were not superseded because once the Foundation’s confidential and sensitive
information is made public, the damage to the Foundation will have been done and the appeal
would be rendered moot. In response, Zachor argued that an order granting a plea to the
jurisdiction is not a “judgment” and therefore cannot be superseded. Zachor also argued that
superseding the judgment would amount to an improper injunction against nonparty Texas A&M
and the Foundation cannot show how it will be irreparably injured. The trial court denied the
Foundation’s motion to supersede, stating in its order that it found the motion should be denied
because “there is no ‘judgment’ in this case that any party could enforce.”
ANALYSIS
In its motion to this Court, the Foundation argues that (1) the trial court erred as a
matter of law by holding that an order granting a plea to the jurisdiction is not a judgment that
can be superseded under Rule 24, and (2) the trial court abused its discretion by declining to
supersede a judgment when a failure to supersede would render the appeal moot. The
Foundation further argues that no bond posted by Zachor could offset the irreparable harm the
Foundation will suffer if the judgment is not superseded and the Foundation prevails on appeal;
therefore, Zachor should not be allowed to counter-supersede the judgment under Rule
24.2(a)(3). Moreover, the Foundation asserts that this Court should set a nominal bond in the
amount of $1,000 for it to post to supersede the judgment because Zachor identified no harm
resulting from a suspension of the judgment.
The Attorney General submitted a letter to the Court informing us that it does not
intend to file a response to the Foundation’s motion because it “does not oppose the motion and
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believes it is appropriate for the Court to prevent the release of the information at issue in order
to preserve its jurisdiction to decide the merits of the appeal.” Zachor filed a response to the
motion, arguing that there is “no judgment that any party is threatening to, or indeed could,
enforce” and that the Foundation is improperly attempting to obtain what amounts to an
injunction against nonparty Texas A&M by attempting to supersede the judgment.
Issue 1: The order is a final judgment that can be superseded.
In its motion to the trial court, the Foundation sought to suspend enforcement of
the judgment by posting a bond as allowed under Rule 24.2(a)(3), which governs the amount of a
bond required to supersede a judgment for something other than money or an interest in real
property. The Rule provides in relevant part:
[T]he trial court must set the amount and type of security that the judgment
debtor [here, the Foundation] must post. The security must adequately protect
the judgment creditor [here, Zachor] against loss or damage that the appeal
might cause. But the trial court may decline to permit the judgment to be
superseded if the judgment creditor [Zachor] posts security ordered by the trial
court in an amount and type that will secure the judgment debtor [the Foundation]
against any loss or damage caused by the relief granted the judgment creditor
[Zachor] if an appellate court determines, on final disposition, that that relief was
improper.
Tex. R. App. P. 24.2(a)(3) (emphasis added). In response, Zachor argued to the trial court that
its order of dismissal is not a “judgment” to which Rules 24 and 25 apply because “there is no
‘judgment’ to be enforced,” and thus, no enforcement to be suspended by supersedeas. We
disagree.
Whether titled an “order” or a “judgment,” a grant of a plea to the jurisdiction that
dismisses an entire case is in substance a final judgment because it disposes of all parties and all
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claims. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001) (“A judgment is final
for purposes of appeal if it disposes of all pending parties and claims in the record . . . .”). In its
response to this Court, Zachor acknowledges that a dismissal of all claims and all parties is final
and potentially appealable, but it argues that the trial court’s dismissal order, as a practical
matter, is not enforceable (i.e., Zachor cannot use the order to force Texas A&M to produce the
documents), and thus, there is nothing to be suspended. However, Zachor’s argument
mischaracterizes the nature of this PIA appeal.
As the governmental entity from whom documents were sought, Texas A&M’s
request for a ruling from the Attorney General suspended its obligation to provide the records at
issue.1 See Tex. Gov’t Code §§ 552.301 (setting forth procedure for requests to Attorney
General), .302 (providing that in absence of such request, information “is presumed to be subject
to required public disclosure and must be released unless there is a compelling reason to
withhold the information”). The Foundation brought suit against the Attorney General under
Section 552.325 as an entity seeking to withhold information from a requestor. Its suit was not
against Texas A&M or Zachor, although the PIA required it to notify Zachor of the suit and also
allowed Zachor to intervene. See id. § 552.325(a), (b). Under the PIA, Zachor must also be
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Zachor argues that the status quo that supersedeas would protect here is the absence of an order
preventing disclosure of the documents. See El Caballero Ranch, Inc. v. Grace River Ranch,
L.L.C., — S.W.3d —, No. 04-16-00298-CV, 2016 WL 4444400, at *3 (Tex. App.—San Antonio
Aug. 24, 2016, no pet.) (“Supersedeas is a writ that preserves the status quo of a matter as it
existed before the issuance of a final judgment from which an appeal is being taken.”). We
disagree. Here, the status quo is that Texas A&M sought a ruling from the Attorney General’s
office on Zachor’s request, and that request for a ruling suspended Texas A&M’s obligation to
disclose the documents. Until the Foundation’s challenge to the Attorney General’s ruling is
ultimately resolved, the absence of Texas A&M’s obligation to produce the documents is the
status quo to be protected by supersedeas.
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allowed an opportunity to intervene and oppose any settlement that the Attorney General might
seek to enter into with the Foundation. Id. § 552.325(a).
The Foundation argues that the trial court’s dismissal of its suit against the
Attorney General has the same practical effect as an adverse ruling on the merits would—
without a pending challenge to the Attorney General’s letter ruling, in theory, Zachor could seek
to enforce the Attorney General’s ruling and compel disclosure of the documents at issue. Even
if, as a practical matter, Zachor is unlikely to be able to obtain the information from Texas A&M
while the suit is pending, especially in light of the Attorney General’s position that it is
appropriate for the Court to prevent the release of the information, superseding the trial court’s
order granting the State’s plea to the jurisdiction is the Foundation’s only recourse from Zachor’s
ostensible legal right to attempt to obtain the information. Thus, the trial court abused its
discretion by declining to set a bond “because there is no ‘judgment’ in this case that any party
could enforce.”
Issue 2: The trial court lacked discretion under Rule 24.2(a)(3) to decline to permit the
Foundation to supersede the judgment.
If there is a final, appealable judgment or appealable interlocutory order, under
Rule 24.2(a)(3), the trial court must allow the judgment to be superseded. Tex. R. App. P.
24.2(a)(3) (“[T]he trial court must set the amount and type of security that the judgment debtor
[here, the Foundation] must post.”). The trial court only has discretion with regard to the amount
and type of security that the Foundation must post under Rule 24.2(a)(3) to adequately protect
Zachor against damage that the appeal might cause. See id. Moreover, the trial court does not
have discretion to refuse to supersede a judgment that would require production of information in
a PIA case because “once the requested information is produced, an appeal is moot.” In re
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Dallas Area Rapid Transit, 967 S.W.2d 358, 360 (Tex. 1998). Superseding the judgment in this
case is necessary to preserve the Foundation’s right to appeal and pursue its claims on the merits.
However, Rule 24.2(a)(3) allows the trial court discretion to decline to permit the
Foundation to supersede the judgment if the court could ensure through a bond posted by Zachor
that the Foundation would be protected from damage caused to it if the information is released to
Zachor, and the Foundation later succeeds on appeal. But Zachor only offered to post a nominal
bond of $1,000, and it provided no evidence to support that a nominal amount would protect the
Foundation from erroneous disclosure of the information.
The Foundation, on the other hand, offered evidence that it will suffer
unquantifiable irreparable harm if the requested information is disclosed. The Foundation
argued that it would be “irreparably damaged” if the judgment were not superseded because
“[o]nce the confidential and sensitive information is made public, the damage to [the
Foundation] will already have been done” and would render an appeal moot. It submitted an
affidavit to the trial court from the Foundation’s general counsel attesting to the highly
confidential nature of its negotiations and arrangements with Texas A&M, disclosure of which
would cause competitive harm to the Foundation.
The Foundation further argued that it should only be required to post a nominal
bond of $1,000 to supersede the judgment because neither Zachor nor any of the other involved
parties would suffer any loss or damage as a result of suspending the judgment while the appeal
is pending. Zachor presented no evidence of any harm it would suffer from a stay during the
pendency of the appeal. Accordingly, we conclude that the trial court abused its discretion by
failing to allow the Foundation to post a nominal bond to supersede the judgment, given the lack
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of evidence of harm to Zachor and the evidence of unquantifiable irreparable harm to the
Foundation if the information is disclosed while the appeal is pending.
CONCLUSION
The trial court abused its discretion by denying the Foundation’s Rule 24 motion.
Because Zachor did not present any evidence to the trial court of harm it would suffer from a
stay during the pendency of the appeal, the record before the trial court established that the
Foundation should be allowed to post a nominal bond in the amount of $1,000. To maintain the
status quo and to protect our jurisdiction over the appeal, we grant the Foundation’s motion for
review of the trial court’s order, and we suspend the trial court’s judgment and any enforcement
of the Attorney General’s letter ruling that would require Texas A&M to disclose the
Foundation’s information at issue in this suit. See Tex. R. App. P. 24.4(d). We order that the
Foundation post a bond in the amount of $1,000 with the trial-court clerk on or before November
11, 2020. See id.
It is so ordered on October 22, 2020.
Before Chief Justice Rose, Justices Baker and Kelly
Filed: October 22, 2020
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