EVIEW Volume Sixteen 2009–2010 - Texas Wesleyan School of ...

TEXAS WESLEYAN
LAW REVIEW
Volume Sixteen
2009–2010
TEXAS WESLEYAN UNIVERSITY SCHOOL OF LAW
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TEXAS WESLEYAN LAW REVIEW
VOLUME SIXTEEN
2009–2010
Texas Wesleyan Law Review ISSN 1081-5449, Volume Sixteen, 2009–2010.
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Cite as: 16 TEX. WESLEYAN L. REV. __ (2010).

TEXAS WESLEYAN
LAW REVIEW
VOLUME 16 WINTER 2010 NUMBER 2
BOARD OF EDITORS
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The views expressed in this Law Review do not necessarily reflect the opinions of the Board of Editors.
COPYRIGHT 2010 © BY THE TEXAS WESLEYAN LAW REVIEW

TEXAS WESLEYAN
LAW REVIEW
VOLUME 16 WINTER 2010 NUMBER 2
CONTENTS
ARTICLES
Handling Capital Cases Dealing With the Media ................................... 159
Judge Sharen Wilson and Judge Cynthia Stevens Kent
A Little TLC: Tender, Liability, and Covenants Vis-à-vis Recovery of
Pre-Notice Defense Costs After PAJ, Incorporated v. Hanover Insurance Company
and its Progeny ................................................................. 187
J.J. Knauff
COMMENTS
The Anti-Concurrent Clause and its Impact on Texas Residents After Hurricane Ike . . . 201
Amber L. Altemose
Some People Just Shouldn’t Have Kids!: Probation Conditions Limiting the
Fundamental Right to Procreate and How Texas Courts Should Handle the Issue...... 225
Kellie Brady
Third-Party Special Needs Trust: Dead or Alive in a Uniform Trust Code
World .......................................................................... 249
Jennifer Brannan
Eminent Domain and Pipelines in Texas: It’s as Easy as 1, 2, 3—Common Carriers,
Gas Utilities, and Gas Corporations ............................................... 271
Amanda Buffington Niles
Dismissal of a Bankruptcy Chapter 13 Filing: A Debtor’s Unconditional Right or
Subject to the Court’s Discretion Based on Bad Faith? ............................. 295
Gabriel C. Gonzalez
COPYRIGHT 2010 © BY THE TEXAS WESLEYAN LAW REVIEW

COMMENTS
THE ANTI-CONCURRENT CLAUSE AND ITS
IMPACT ON TEXAS RESIDENTS
AFTER HURRICANE IKE
By Amber L. Altemose
I. INTRODUCTION.......................................... 201 R
II. BACKGROUND OF THE ANTI-CONCURRENT CLAUSE .... 202 R
III. DEVELOPMENT OF TEXAS CASE LAW INTERPRETING
INSURANCE POLICIES WHEN CONCURRENT CAUSES OF
DAMAGE OCCUR ....................................... 204 R
A. Before Anti-Concurrent Clauses: Development of
Texas Case Law Interpreting Insurances Policies
When Concurrent Causes of Damage Occur ........ 204 R
B. Post Anti-Concurrent Clauses: Development of Texas
Case Law Interpreting the Anti-Concurrent
Clause .............................................. 209 R
C. Conclusion of Texas Case Law Development on
Concurrent Causes and the Anti-Concurrent
Clause .............................................. 212 R
IV. THE FIFTH CIRCUIT’S PERCEPTION OF THE ANTI-
CONCURRENT CLAUSE .................................. 213 R
V. PROBLEMS AND PROPOSED SOLUTIONS TO THE ANTI-
CONCURRENT CLAUSE .................................. 217 R
A. Courts Should Render the Clause Unenforceable .... 218 R
B. If Courts Uphold the Clause, the Clause Should be
Made Apparent to Policyholders .................... 221 R
C. Establish a New, Single Form of Insurance.......... 221 R
VI. THE INSURANCE COMPANIES’ ARGUMENT .............. 222 R
VII. CONCLUSION ............................................ 222 R
I. INTRODUCTION
A Texas homeowner maintaining a homeowner’s insurance policy, a
flood insurance policy, and a windstorm insurance policy reasonably
expects to have full coverage in the event of a hurricane. But after
Hurricane Katrina pummeled the Gulf Coast in 2005, insurance companies
in Louisiana and Mississippi began denying claims based on
anti-concurrent clauses in their homeowners’ insurance policies. 1 Litigation
ensued, and the Fifth Circuit held that anti-concurrent clauses
1. See Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 426 (5th Cir. 2007),
cert. denied, 128 S. Ct. 1873 (2008); Tuepker v. State Farm Fire & Cas. Co., 507 F.3d
346, 349 (5th Cir. 2007).
201

202 TEXAS WESLEYAN LAW REVIEW [Vol. 16
are valid and enforceable. 2 As a result, insurance companies in Texas
may follow suit and deny claims to Texas homeowners affected by
Hurricane Ike based on the anti-concurrent clause.
A homeowner’s insurance policy typically contains a section detailing
both covered perils and non-covered perils. Covered perils may
include wind damage, for example, and non-covered perils may include
flood damage. Some insurance policies also contain an anti-concurrent
clause, which may be troublesome for some Texas
homeowners after Hurricane Ike. The problem an anti-concurrent
clause presents is simple—it denies coverage to policyholders for
damages caused by a covered peril. 3 By validating anti-concurrent
clauses, the Fifth Circuit denied recovery for damages caused by a
peril covered under the policy. This Comment will explain the development
of Texas case law interpreting insurance policies when concurrent
causes of damage occur; the Fifth Circuit’s interpretation of anticoncurrent
clauses; and the legal effect of the anti-concurrent clause in
Texas.
II. BACKGROUND OF THE ANTI-CONCURRENT CLAUSE
The prudent homeowner residing along the Gulf Coast maintains a
homeowner’s insurance policy, a flood insurance policy, and a windstorm
insurance policy. 4 A windstorm insurance policy, and some
homeowner’s insurance policies, insures damage to the policyholder’s
roof caused by high winds, as well as water damages resulting from a
tear or hole in the roof caused by strong winds. 5 But a homeowner’s
insurance policy will not cover all types of water damage. 6 For example,
most coastal homeowner’s insurance policies will not cover water
damage 7 caused by “flood, surface water, waves, tidal water or tidal
waves, overflow of streams or other bodies of water or spray, whether
2. Leonard, 499 F.3d at 436; Tuepker, 507 F.3d at 356.
3. See David J. Rosenberg et al., Insurance Industry Woes in the Aftermath of
Hurricanes Katrina and Rita, 73 DEF. COUNS. J. 141, 152 (2006).
4. The Author assumes that the homeowner’s insurance policy covers windstorm
damage, eliminating the need for the homeowner to obtain insurance through the
Texas Windstorm Insurance Association. Although some private insurance companies
cover windstorm damage in the policy, see infra note 5, many insurance companies do
not and as a result the Texas Windstorm Insurance Association was created. See Texas
Windstorm Insurance Association, http://www.twia.org/AboutTWIA.aspx (last visited
Aug. 17, 2009).
5. See TEX. FARM BUREAU MUT. INS. CO., TEX. HOMEOWNERS POLICY—FORM
A 6 provision 3(b) (2003) [hereinafter FARM BUREAU HOMEOWNERS POLICY]; STATE
FARM INS., HOMEOWNERS POLICY, 7 provision 2 (1983) [hereinafter STATE FARM
HOMEOWNERS POLICY].
6. FARM BUREAU HOMEOWNERS POLICY, supra note 5, at 7 provision 1(b); see
also STATE FARM HOMEOWNERS POLICY, supra note 5, at 10 provision 2(c).
7. See FEMA, NATIONAL FLOOD INSURANCE PROGRAM, MYTHS AND FACTS
ABOUT THE NATIONAL FLOOD INSURANCE PROGRAM 2 (2007), available at http://
www.fema.gov/library/viewRecord.do?id=3002 (go to “Resource File” and select
“View/Download/Print” link) [hereinafter FEMA MYTHS].

2010] THE ANTI-CONCURRENT CLAUSE 203
or not driven by wind.” 8 In fact, the majority of insurance policies
expressly exclude flood claims. 9 As a result, the federal government
created the National Flood Insurance Program (NFIP) 10 to provide
federally backed flood insurance through private insurance
companies. 11
If a community is eligible to participate in the NFIP, the residents of
that community may obtain flood insurance otherwise unavailable in
the traditional insurance market. 12 NFIP-supplied flood insurance is
separate from a standard homeowner’s policy. 13 Therefore, if a homeowner
decides against purchasing separate NFIP flood insurance, the
house is not protected against water damages resulting from flood,
storm surge, tidal wave, etc. 14
When a homeowner purchases a homeowner’s insurance policy and
a flood insurance policy, he or she can reasonably expect to be fully
covered in the event of a hurricane. 15 In fact, a homeowner can reasonably
expect that if wind damage occurs the homeowner’s insurance
policy will cover the damages. The homeowner can also reasonably
expect that if flood damage occurs the flood insurance policy will
cover the damages.
But many insurance policies contain anti-concurrent clauses. The
following is an example of a typical anti-concurrent clause:
We do not insure under any coverage for any loss which would not
have occurred in the absence of one or more of the following excluded
events. We do not insure for such loss regardless of: (a) the
cause of the excluded event; or (b) other causes of the loss; or (c)
whether other causes acted concurrently or in sequence with the
excluded event to produce the loss . . . as a result of any combination
of . . . [w]ater [d]amage, meaning . . . flood, surface water,
waves, tidal water, tsunami, seiche, overflow of a body of water, or
spray from any of these, all whether driven by wind or not. 16
Anti-concurrent clauses are easier to understand when applying it to
recent disasters, such as Hurricane Ike. Hurricane Ike produced
8. FARM BUREAU HOMEOWNERS POLICY, supra note 5, at 7 provision 1(b).
9. See FEMA MYTHS, supra note 7.
10. See FEMA, NATIONAL FLOOD INSURANCE PROGRAM DESCRIPTION 1 (2002)
http://www.fema.gov/business/nfip/ (Select National Flood Insurance Program link in
left column, then select NFIP Program Description link. Scroll down to Resource File
and select View/Download/Print link) [hereinafter NFIP DESCRIPTION]. A program
similar to the NFIP was proposed in the early 1950s when it was not profitable for
private insurance companies to provide flood insurance at an affordable price. Id.
11. See FEMA MYTHS, supra note 7.
12. Id.; NFIP DESCRIPTION, supra note 10, at 2.
13. See FEMA MYTHS, supra note 7.
14. See FARM BUREAU HOMEOWNERS POLICY, supra note 5, at 7 provision 1(b);
see also STATE FARM HOMEOWNERS POLICY, supra note 5, at 10 provision 2(c).
15. In the event that a homeowner’s insurance policy does not cover windstorm, a
separate windstorm policy should be obtained. See Texas Windstorm Insurance Association,
supra note 4.
16. STATE FARM HOMEOWNERS POLICY, supra note 5, at 7 provision 2(a)(1).

204 TEXAS WESLEYAN LAW REVIEW [Vol. 16
strong winds 17 that caused roof damage to many houses. Hurricane
Ike also produced a large storm surge that flooded many houses or
completely destroyed houses leaving only the concrete slab. 18 Based
on the language of the anti-concurrent clause, the insurance company
may deny a claim because a covered peril, windstorm, and an excluded
peril, storm surge, concurrently caused damage to the house.
Although Texas courts are experienced in interpreting insurance policies
when concurrent causes of damage result from a hurricane, 19
Texas courts have had little opportunity to grapple with the anti-concurrent
clause and how it may affect policyholders in the aftermath of
Hurricane Ike. 20
III. DEVELOPMENT OF TEXAS CASE LAW INTERPRETING
INSURANCE POLICIES WHEN CONCURRENT
CAUSES OF DAMAGE OCCUR
Since the late 1800s, Texas courts have dealt with the issue surrounding
concurrent causes of damage and its affect on insurance policies.
21 Because hurricanes produce water and wind, and most
insurance policies exclude either water or wind damage, 22 Texas
courts are experienced in interpreting insurance policies regarding
concurrent causes of damage. 23
A. Before Anti-Concurrent Clauses: Development of Texas Case
Law Interpreting Insurance Policies When Concurrent
Causes of Damage Occur
1. Pelican Fire Insurance Company v. Troy Co-Op. Association
In 1890, the Texas Supreme Court rendered its first decision interpreting
an insurance policy’s coverage of concurrent causes of damage
in Pelican Fire Insurance Company v. Troy Co-Op. Association. 24 The
insurance policy protected the insured’s house from loss caused by
fire, but the policy contained an exclusion that prevented the insured
17. FEMA, HURRICANE IKE IMPACT REPORT 1 (2008), available at http://www.
fema.gov/pdf/hazard/hurricane/2008/ike/impact_report.pdf [hereinafter IMPACT RE-
PORT]. Winds were recorded at 110 mph when Hurricane Ike made landfall. Id.
18. Id. at 16.
19. See Travelers Indem. Co. v. McKillip, 469 S.W.2d 160 (Tex. 1971).
20. See Lexington Ins. Co. v. Unity/Waterford-Fair Oaks, Ltd., No. Civ. A.
399CV1623D, 2002 WL 356756, at *4 (N.D. Tex. Mar. 5, 2002).
21. Pelican Fire Ins. Co. v. Troy Co-Op. Ass’n., 77 Tex. 225, 226–27, 13 S.W. 980,
981 (1890).
22. See FARM BUREAU HOMEOWNERS POLICY, supra note 5, at 7 provision 1(b);
see also STATE FARM HOMEOWNERS POLICY, supra note 5, at 10 provision 2(c).
23. See Pelican Fire Ins. Co., 77 Tex. at 225, 13 S.W. at 981; Palatine Ins. Co. v.
Petrovich, 235 S.W. 929, 930 (Tex. Civ. App.—Galveston 1917, no writ); Palatine Ins.
Co. v. Coyle, 196 S.W. 560, 560 (Tex. Civ. App.—Galveston 1917), aff’d, 222 S.W. 973
(Tex. Comm’n App. 1920, judgm’t adopted); Hardware Dealers Mut. Ins. Co. v. Berglund,
393 S.W.2d 309, 309 (Tex. 1965); McKillip, 469 S.W.2d at 160.
24. Pelican Fire Ins. Co., 77 Tex. at 227–28, 13 S.W. at 981.

2010] THE ANTI-CONCURRENT CLAUSE 205
from collecting on the insurance policy if the fire was caused by a
hurricane or if the building fell for any reason other than fire. 25
The house caught on fire either during or immediately following a
hurricane, and soon after the house fell. 26 Evidence established that
the fire was caused by falling timbers that broke a lamp in the house. 27
To prevail, the insured had the burden of proving that the fire destroyed
the house and that the fire was not caused by the hurricane or
the fallen house. 28 Based on the evidence, the court found that the
fire was caused by either the hurricane or the fallen house. 29 Therefore,
the exclusion in the policy prevented the insured from recovering
monetary damages for its loss. 30
This case established the burden imposed on the insured when challenging
an insurance policy. Under Pelican, the insured had the burden
to prove that the property was destroyed by a covered peril, as
well as prove that the loss did not fall within one of the exclusions
contained in the policy. 31 The insured was able to prove that the
property was destroyed by the covered peril of fire; 32 but the insured
could not prove that the fire did not fall under the excluded perils, i.e.,
that the fire was not caused by a hurricane or the fallen house. Therefore,
the insured could not recover. 33
The burden of proof in Pelican was modified in 1940 by Rule 94 of
the Texas Rules of Civil Procedure. 34 Rule 94 shifts the burden to the
insurance company to prove that the loss was caused by an excluded
peril. 35 Once the insurance company proves that the loss was caused
by an excluded peril, the burden shifts back to the insured to prove
otherwise. 36
2. Palatine Insurance Company v. Petrovich
In 1915 a devastating hurricane that produced high winds and a
storm surge hit Galveston Island, Texas. Once again, Texas courts
were presented with the issue of concurrent causes of property loss
and an insurance policy that excludes one of the causes.
Steve Petrovich obtained an insurance policy from Palatine Insurance
Company that insured his house against damage caused by tor-
25. Id. at 227–28, 13 S.W. at 981.
26. Id. at 227–28, 13 S.W. at 981.
27. Id. at 227–28, 13 S.W. at 981.
28. Id. at 227–28, 13 S.W. at 981.
29. Id. at 227–28, 13 S.W. at 981.
30. Id. at 227–28, 13 S.W. at 981.
31. Id. at 227–28, 13 S.W. at 981.
32. See id. at 227–28, 13 S.W. at 981.
33. Id. at 227–28, 13 S.W. at 981.
34. TEX. R. CIV. P. 94.
35. Id.
36. Pelican Fire Ins. Co., 77 Tex. at 227–28, 13 S.W. at 981.

206 TEXAS WESLEYAN LAW REVIEW [Vol. 16
nado, windstorm, or cyclone. 37 But the policy excluded damage
caused by high water or tidal wave. The hurricane produced a large
storm surge that was accompanied by high winds, and because of the
combined perils, Petrovich’s house was swept away to sea. 38 Petrovich
argued that his house was destroyed when the wind was blowing
at its highest velocity, and that his house was blown away by the wind
and not by high water or tidal wave. 39
The insurance company defended on the grounds that the parties
contracted out of the loss by excluding loss or damages resulting from
high water or tidal wave. 40 As a result of the exclusion, the insurance
company contended that it did not have to pay for any loss caused by
high water. 41
The Galveston Court of Civil Appeals held that the insurance policy
was a policy against wind alone, and not a policy against loss resulting
partly by wind and partly by high water. 42 Thus, any damages caused
by water and wind combined could not be segregated. 43 Because the
water concurrently contributed to the loss of Petrovich’s house, the
exclusion in the policy prevented Petrovich from holding the insurance
company liable. 44 Therefore, Petrovich was unable to collect
damages from the insurance company for the loss of his house.
3. Palatine Insurance Company v. Coyle
B. A. Coyle lived on Galveston Island, Texas, and insured his apartment
with Palatine Insurance Company. 45 The policy covered loss or
damage caused by tornado, windstorm, or cyclone. 46 The policy did
not cover loss or damage caused by tidal wave or high water. 47 The
hurricane of 1915 that swept Petrovich’s house to sea 48 also wreaked
havoc on Coyle’s apartment. 49 The wind and water from the hurricane
caused significant damage to the interior and exterior portions of
the apartment. 50 The insurance company denied Coyle’s claim and
37. Palatine Ins. Co. v. Petrovich, 235 S.W. 929, 930 (Tex. Civ. App.—Galveston
1917, no writ).
38. Id.
39. Id.
40. Id.
41. Id.
42. Id. at 931.
43. Id. at 930.
44. Id.
45. Palatine Ins. Co. v. Coyle, 196 S.W. 560, 561 (Tex. Civ. App.—Galveston
1917), aff’d, 222 S.W. 973 (Tex. Comm’n App. 1920, judgm’t adopted).
46. Id.
47. Id.
48. Petrovich, 235 S.W. at 930.
49. Coyle, 196 S.W. at 561.
50. Id.

2010] THE ANTI-CONCURRENT CLAUSE 207
defended on the grounds that water caused the damages—the same
exclusion that was at issue in the Petrovich case. 51
During the course of the suit, the parties stipulated that the total
loss and damage caused by the storm amounted to $4,512.43. 52 Of
that amount, the parties stipulated that $500 of damage was caused by
the wind, independent of water. 53 The parties further stipulated that
$660 of damage was caused by water or rain that entered through an
opening in the roof as a result of the wind damage. 54 Therefore
$3,352.43 of the loss was caused by the combined action of wind and
water. 55
Once again, the Galveston Court of Civil Appeals concluded that
the insurance policy was a policy against damages caused by wind
alone, not damages caused partly by wind and partly by high water. 56
The court based this determination on “elementary rule[s] of [contract]
interpretation.” 57 The court reasoned that by placing the exclusions
in the policy, the insurance company intended to indemnify the
insured for losses only attributable to wind. 58
The court held that the insurance company was not liable for damages
caused by the combined action of wind and water. 59 But deviating
from the Petrovich case, the court segregated the damages to
Coyle’s apartment based upon the stipulated agreement. 60 The court
rendered judgment for Coyle in the amount of $1,160—$500 for the
damage caused by wind and $660 for the damage caused by rain that
entered through openings in the roof caused by the wind. 61
Coyle appealed the judgment of the Galveston Court of Civil Appeals,
and the Texas Commission of Appeals heard the case. 62 The
Commission issued an opinion and affirmed the ruling of the Galveston
Court of Civil Appeals. 63 The Texas Supreme Court adopted the
opinion of the Texas Commission of Appeals and added that the damage
caused concurrently by the water was contracted out of the policy
and the only thing left to recover was loss caused solely by the wind. 64
The insurance policies at issue in the Coyle case and the Petrovich
case were exactly the same, yet the outcomes were different. Factu-
51. See Coyle, 196 S.W. at 562; Petrovich, 235 S.W. at 930.
52. Coyle, 196 S.W. at 561.
53. Id.
54. Id.
55. Id.
56. Id.
57. Id. at 563.
58. Id.
59. Id. at 565.
60. Id.
61. Id.
62. Coyle v. Palatine Ins. Co., 222 S.W.973, 973 (Tex. Comm’n App. 1920, judgm’t
adopted), aff’g 196 S.W. 560 (Tex. Civ. App.—Galveston 1917).
63. Id. at 975.
64. Id. at 976.

208 TEXAS WESLEYAN LAW REVIEW [Vol. 16
ally, the difference between the two cases is the damages sustained to
the property. Petrovich lost his entire house, 65 whereas Coyle received
substantial damage to his apartment. 66 But the courts come to
different conclusions regarding the policies: in Petrovich, the court
would not segregate the damages because it held the policy was not
divisible; 67 in Coyle, the court segregated the damages as agreed upon
by the parties. 68 The opinion in Coyle does not detail why the court
segregated the damages, and it may have come down to the fact that
Coyle was able to obtain tangible evidence of the causes of damage
because his apartment survived the hurricane.
4. Travelers Indemnity Company v. McKillip
In 1971 the McKillips owned a poultry house that was insured by
Travelers Indemnity Company. 69 The policy covered damages to the
poultry house caused by windstorm, but excluded damages caused by
snowstorm. 70 A tremendous windstorm swept across the McKillips’
property and struck the poultry house. 71 The McKillips, however,
failed to inspect the house and testified that that no apparent damage
was detected. 72 Six days later, four to five inches of snow fell on the
poultry house and the poultry house collapsed. 73
Because the McKillips alleged that the poultry house was damaged
by an insured peril, windstorm, the McKillips had the burden of proving
that the damage was caused by the windstorm. 74 Once the McKillips
pleaded windstorm damage, the burden shifted to the insurance
company to plead an exclusion in the policy to successfully deny coverage.
75 The insurance company pleaded the exclusion of snowstorm,
and the burden shifted back to the McKillips to prove “the damage
was caused solely by windstorm,” or to segregate “the damage caused
by [windstorm] from that [damage] caused by the snowstorm.” 76
The jury found that the dominant efficient cause of the damage to
the poultry house was caused by windstorm and not solely by the
weight of the snow. 77 As a result of this finding, the McKillips were
awarded the replacement costs of the poultry house. 78 In affirming
65. Palatine Ins. Co. v. Petrovich, 235 S.W. 929, 930 (Tex. Civ. App.—Galveston
1917, no writ).
66. Coyle, 196 S.W. at 560.
67. Petrovich, 235 S.W. at 930.
68. Coyle, 196 S.W. at 565.
69. Travelers Indem. Co. v. McKillip, 469 S.W.2d 160, 161 (Tex. 1971).
70. Id. at 161–62.
71. Id. at 161.
72. Id.
73. Id.
74. TEX. R. CIV. P. 94.
75. McKillip, 469 S.W.2d at 162.
76. Id.
77. Id. at 161.
78. Id.

2010] THE ANTI-CONCURRENT CLAUSE 209
the trial court, the Eastland Court of Civil Appeals held that where a
loss occurs under a standard windstorm policy and an excluded peril
contributes to the loss, the insured can recover if the insured can
prove that windstorm was the “dominant efficient” cause of the loss. 79
The Texas Supreme Court reversed the judgment of the appellate
court because the evidence supported a finding that a portion of the
loss was caused by snowstorm. 80 To recover the full replacement costs
of the poultry house, the evidence must have supported the McKillips’
contention that the damage to the poultry house was caused solely by
windstorm, and that no damage was caused by the snowstorm. 81 If the
damage to the poultry house was the result of windstorm and snowstorm,
it was the McKillips’ burden to segregate the damage caused by
each peril. 82
The McKillips, however, did not produce any evidence relating to
the damage caused by the wind. 83 No inspection of the poultry house
was made after the windstorm, and the McKillips did not attempt to
estimate the damages caused directly by the wind. 84 Because the
McKillips failed to meet their burden of producing evidence that
would “afford a reasonable basis for estimating the amount of damage
. . . caused by a risk covered by the insurance policy,” the Texas Supreme
Court reversed the judgment. 85
The McKillips case illustrates the importance of producing evidence
to support the burden of proof. The McKillips had the burden of
proving that a covered peril damaged the poultry house and the extent
of the damage the covered peril caused. In the event of litigation, it is
important for insureds to determine what caused the damage to their
house, and it is even more important to determine the dollar amount
of damage caused by each peril. Because an insured will recover only
for losses that were caused by the covered peril, it is vital to produce
evidence demonstrating loss caused by the covered peril when a covered
peril and an excluded peril concurrently cause damage so the
jury can segregate damages—unless the policy contains an anti-concurrent
clause.
B. Post Anti-Concurrent Clauses: Development of Texas Case Law
Interpreting the Anti-Concurrent Clause
Texas law is settled regarding concurrent causes of damage: as long
as the insured can segregate the damage caused by a covered peril
from the damage caused by an excluded peril, the insured can recover.
79. Id. at 162.
80. Id.
81. Id. at 163.
82. See id. at 163.
83. Id.
84. Id.
85. Id.

210 TEXAS WESLEYAN LAW REVIEW [Vol. 16
But, Texas law is new and unsettled when it comes to the anti-concurrent
clause.
1. Wong v. Monticello Insurance Company
Choi Leng Wong obtained an insurance policy for her restaurant
located in the Moke Building in San Antonio, Texas. 86 After an explosion
occurred in an adjacent building, the city ordered the Moke
Building to be demolished. 87 Under Wong’s insurance policy, the restaurant
was covered for damages caused by explosion or high winds;
but the policy excluded damages that resulted from government-enforced
demolition of the property. 88
The policy also included an anti-concurrent clause that stated the
insurance company would not pay for damages caused by demolition
“regardless of any other cause or event that contributes concurrently
or in any sequence to the loss.” 89 Based on the language of the policy,
if the explosion damaged the restaurant and the extent of the damage
caused the restaurant to be demolished, the anti-concurrent clause
would give the insurance company the right to completely deny
coverage. 90
In 2003 the San Antonio Court of Appeals denied coverage to
Wong based on the anti-concurrent clause. 91 The court reasoned that
even though a covered peril (explosion) combined with a non-covered
peril (demolition) to damage the restaurant, the anti-concurrent
clause excluded coverage. 92
This case is an example of the problem an anti-concurrent clause
presents to the insured. Wong purchased insurance coverage for her
restaurant to include any damage caused by explosion or high wind.
As a result of explosion and high wind, the building where her restaurant
was located was ordered demolished, which was an excluded
peril. Even if Wong was able to segregate the damage and provide
evidence proving the extent of damage caused by high winds and explosion,
the insurance company could still successfully deny her claim
based on the anti-concurrent clause.
86. Wong v. Monticello Ins. Co., No. 04-02-00142-CV, 2003 WL 1522938, at *1
(Tex. App.—San Antonio Mar. 26, 2003, pet. denied).
87. Id.
88. Id.
89. Id.
90. See id.
91. Id.
92. Id.

2010] THE ANTI-CONCURRENT CLAUSE 211
2. Lexington Insurance Company v. Unity/Waterford-
Fair Oaks, Limited
Texas One insured its Oak Meadow Apartments through Lexington
Insurance Company. 93 The second floor of the apartments sustained
water damage from roof leaks after a severe rainstorm. 94 The insurance
policy contained the following anti-concurrent clause: “[t]his
agreement does not insure against loss caused directly or indirectly by
any of the following. Such loss is excluded regardless of any other
cause or event contributing concurrently or in any sequence to the
loss.” 95 The policy then listed exclusions, including property
maintenance. 96
Lexington argued that the roof leaks that caused the damage were
caused in part by inadequate maintenance. 97 Lexington’s expert concluded
that the roof leaks were caused by a “lack of proper and adequate
maintenance of the roof” and Texas One’s expert concluded
that “the roofs evidenced a lack of maintenance.” 98
Consistent with Rule 94 of the Texas Rules of Civil Procedure, 99 the
Northern District of Texas placed the burden of proof on Lexington to
prove that the damages fell within the exclusionary language contained
in the anti-concurrent clause. 100 Thus, Lexington had to prove
that inadequate maintenance was a contributing cause to the roof
leaks. 101 If Lexington could show that inadequate maintenance of the
roof contributed to the roof leaks, Lexington would be “exempt from
all liability for all damages caused directly or indirectly by the inadequate
maintenance of the roof” based on the anti-concurrent
clause. 102
Because the Lexington case was litigated in federal court, the court
conducted an Erie analysis and applied Texas state law. 103 But there
was no Texas precedent analyzing the anti-concurrent clause, the
clause’s validity, and whether damages could be segregated because
Wong was decided one year after the Lexington opinion was issued in
93. Lexington Ins. Co. v. Unity/Waterford-Fair Oaks, Ltd., No. Civ. A.
399CV1623D, 2002 WL 356756, at *4 (N.D. Tex. Mar. 5, 2002).
94. Id.
95. Id.
96. Id.
97. Id.
98. Id. at *4–5.
99. TEX. R. CIV. P. 94.
100. Lexington Ins. Co., 2002 WL 356756, at *4.
101. Id.
102. Id.
103. Id. Under the Erie doctrine, when a state claim is litigated in federal court, for
example a breach of contract claim, the federal court applies the substantive state law
by making an “Erie” guess as to how the state supreme court would resolve the issue.
See Erie R.R. v. Tompkins, 304 U.S. 64, 78–79 (1938).

212 TEXAS WESLEYAN LAW REVIEW [Vol. 16
2002. 104 Therefore, the court looked at how other jurisdictions treated
the legal effect of the anti-concurrent clause. 105 According to the
court, the weight of the authority in other jurisdictions supported the
court’s holding that the anti-concurrent clause completely barred coverage
to the insured. 106
3. Claunch v. Travelers Lloyds Insurance Company
Claunch, a 2008 case that was decided in the Northern District of
Texas, examined whether the policy’s water-exclusion clause barred
coverage to the insured. 107 The court held that the water-exclusion
clause was not ambiguous and barred the insured’s claim. 108
Although this case did not turn on whether the anti-concurrent
clause barred coverage, the court noted that “the [p]olicy’s ‘anti-concurrent
cause’ provision further supports [the] conclusion, providing
that the ‘loss or damage . . . is excluded regardless of any other cause
or event that contributes concurrently or in any sequence to the
loss.’” 109 Thus, despite the water-exclusion clause, the insured’s claim
would not have survived because of the anti-concurrent clause.
C. Conclusion of Texas Case Law Development on Concurrent
Causes and the Anti-Concurrent Clause
The previous cases demonstrate the development of Texas case law
regarding concurrent causation. Since the 1800s, Texas courts have
limited an insured’s recovery to damages that the insured could prove
was caused by a covered peril. One reason courts have taken this
stance is the parties’ intent. For example, if the parties contracted to
only pay for and provide coverage for wind damage, the insurance
company should not be responsible for water damage that also
occurred.
Additionally, courts want to limit recovery to covered perils because
the insurance companies base their premiums on those covered
perils. Insurance companies set aside a certain amount of money to
pay for covered perils based on the risk of that covered peril occurring.
For example, if the insured lives on the Gulf Coast and main-
104. See Wong v. Monticello Ins. Co., No. 04-02-00142-CV, 2003 WL 1522938, at *1
(Tex. App.—San Antonio Mar. 26, 2003, pet. denied).
105. Id. In determining that coverage was barred because of the anti-concurrent
clause, the court relied on the following cases to support its holding: State Farm Fire
& Cas. Co. v. Bongen, 925 P.2d 1042, 1045 (Alaska 1996); Pakmark Corp. v. Liberty
Mut. Ins. Co., 943 S.W.2d 256, 259–62 (Mo. App. 1997) (each holding that when a
covered peril concurrently combines with an excluded peril to create the loss, coverage
is barred because of the anti-concurrent clause).
106. Wong, 2003 WL 1522938, at *1.
107. Claunch v. Travelers Lloyds Ins. Co., No. 4:07-CV-548-A, 2008 WL 114844, at
*1 (N.D. Tex. Jan. 10, 2008).
108. Id. at *4.
109. Id. at *4 n.4.

2010] THE ANTI-CONCURRENT CLAUSE 213
tains windstorm insurance, the insurance company will set aside a
certain amount of money to pay for windstorm damage in the event of
a hurricane. The insurance companies do not set aside money for
flood damage if flood damage is excluded from the policy. Therefore,
courts are rightfully unwilling to require insurance companies to pay
for losses that the insurance companies are unable to anticipate.
Based on these reasons, it is logical for the damages to be segregated
when covered perils combine with excluded perils to create the
loss. But as the law stands in Texas, the anti-concurrent clause may
completely deny coverage for Hurricane Ike victims whose houses
were damaged by a covered peril.
IV. THE FIFTH CIRCUIT’S PERCEPTION OF THE
ANTI-CONCURRENT CLAUSE
After Hurricane Katrina destroyed much of the Louisiana/Mississippi
coast, litigation ensued when homeowners were denied coverage
partly because of the anti-concurrent clause. The following cases decided
by the Fifth Circuit are important to Texas residents in the event
Hurricane Ike litigation reaches the federal courts.
A. Leonard v. Nationwide Mutual Insurance Company
In 2005 the Leonards owned a two-story house in Mississippi. 110
The storm surge that accompanied Hurricane Katrina caused the Leonards’
house to sustain significant damage to the first floor. 111 The
second floor was virtually unscathed. 112 Wind also accompanied Hurricane
Katrina and caused the house to receive modest damage, such
as broken roof shingles; damaged garage walls; and a golf-ball-sized
hole in a window. 113
Nationwide Mutual Insurance Company insured the Leonards’
house. 114 The insurance policy insured the house for wind damage,
excluded water damage, and contained an anti-concurrent clause. 115
After an adjuster evaluated the Leonards’ house, Nationwide tendered
$1,661.71 to the Leonards for damage caused solely by wind,
but denied all other damage-based claims because of the anti-concurrent
clause. 116 As a result, the Leonards sued Nationwide.
The Southern District of Mississippi entered judgment in favor of
the Leonards in the amount of $1,228.16, which represented the dam-
110. Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 424 (5th Cir. 2007), cert.
denied, 128 S. Ct. 1873 (2008).
111. Id. at 426.
112. Id.
113. Id.
114. Id. at 424.
115. Id. at 424–25.
116. Id. at 426.

214 TEXAS WESLEYAN LAW REVIEW [Vol. 16
ages caused solely by wind. 117 But the court refused to enforce the
anti-concurrent clause because it was ambiguous. 118 The district court
further stated that “wind damage was recoverable ‘even if it occurred
concurrently or in sequence with the excluded water damage.’” 119
Under this ruling, an insured could recover for damages caused by
wind, despite situations where wind combined concurrently or sequentially
with water to create the loss. 120 The district court based this
view on Mississippi precedent that allows an insured to recover for
losses caused by a covered peril that concurrently combines with an
excluded peril. 121
On appeal, the Fifth Circuit held that the anti-concurrent clause was
not ambiguous, as determined by the district court, and that Mississippi
law does not preempt the clause. 122 Further, based on the plain
language of the anti-concurrent clause, the Fifth Circuit held that an
insured cannot recover for any wind damage that occurred concurrently
or sequentially with water. 123 Thus, an insured cannot recover
for any damage caused by wind if water combined with the wind concurrently
or sequentially to create the loss. 124 As a result, the court
affirmed the district court’s award of $1,228.16 to the Leonards for the
damages caused solely by wind. 125
To make the interpretation of the anti-concurrent clause more coherent,
the Fifth Circuit provided an example:
If, for example, a policyholder’s roof is blown off in a storm, and
rain enters through the opening, the damage is covered. Only if
storm-surge flooding—an excluded peril—then inundates the same
area that the rain damaged is the ensuing loss excluded because the
loss was caused concurrently or in sequence by the action of a covered
and an excluded peril. 126
It is this interpretation of the anti-concurrent clause that will make it
difficult for homeowners to recover for wind loss after a major hurricane
where storm surge and high winds occur. As stated earlier, windstorm
coverage will normally cover water damage to the house in the
event strong winds tear an opening in the roof and rain enters through
the opening. 127 But in the event that rain does enter the house
117. Id.
118. Id.
119. Id.
120. See Craig A. Cohen & Mark H. Rosenberg, After the Storm: Courts Grapple
with the Insurance Coverage Issues Resulting from Hurricane Katrina, TORT TRIAL &
INS. PRAC. L.J. 139, 147–48 (2008).
121. Id. at 147.
122. Leonard, 499 F.3d at 430.
123. Id.
124. See Cohen & Rosenberg, supra note 120, at 148.
125. See Leonard, 499 F.3d at 423.
126. Id. at 431.
127. See STATE FARM HOMEOWNERS POLICY, supra note 5.

2010] THE ANTI-CONCURRENT CLAUSE 215
through a tear in the roof (covered peril), and the same part of the
house is inundated with storm surge or some other form of water (excluded
peril), all damages are excluded based on the Fifth Circuit’s
interpretation of the anti-concurrent clause, regardless of the fact that
the rain damage was a covered peril.
The only way an insured may prevail against the anti-concurrent
clause in situations like the Leonards and many Hurricane Ike victims,
according to the Fifth Circuit, is to demonstrate that the anti-concurrent
clause is prohibited by “caselaw, statutory law, or public policy.”
128 The sparse Texas case law examined earlier has thus far
upheld anti-concurrent clauses. 129 Further, statutory law will most
likely not help the insureds because the policies are examined and
approved by the Texas Insurance Commissioner. 130 Therefore, according
to the Fifth Circuit, the only way insureds in Texas will prevail
is to argue that the anti-concurrent clause is against public policy. 131
B. Tuepker v. State Farm Fire & Casualty Company
While Leonard is the seminal case dealing with the anti-concurrent
clause and the legal effects the clause has on hurricane-ravaged
houses, Tuepker is a “slab case” and its ruling is important for the slab
cases that may arise in the event of Hurricane Ike litigation. 132
The Tuepkers’ house was completely destroyed by Hurricane Katrina,
which left nothing but the slab of the house. 133 The house was
insured by State Farm for loss caused by windstorm, but excluded loss
caused by water. 134 The policy also contained an anti-concurrent
clause. 135 Based on the policy, State Farm denied the Tuepkers’
claim. 136
The Southern District of Mississippi held that the anti-concurrent
clause was ambiguous because the provision purported to exclude the
covered loss of wind when the wind combined with water, an excluded
loss. 137 Because the policy purported to provide coverage for wind
and simultaneously purported to exclude coverage for wind when
128. Leonard, 499 F.3d at 431.
129. See Wong v. Monticello Ins. Co., No. 04-02-00142-CV, 2003 WL 1522938 at *1
(Tex. App.—San Antonio Mar. 26, 2003, pet. denied); Lexington Ins. Co. v. Unity/
Waterford-Fair Oaks, Ltd., No. Civ. A. 399CV1623D, 2002 WL 356756, at *4–5 (N.D.
Tex. Mar. 5, 2002).
130. TEX. INS. CODE ANN. art. 5.35 (Vernon 2009).
131. See Leonard, 499 F.3d at 431; see discussion infra Part V.A.3.
132. A “slab case” refers to the type of case where the house or building was completely
destroyed and all that remains is the concrete slab. See Sharon M. Mattox &
David G. Wall, Class Certification for Environmental and Toxic Tort Claims, 2008
A.L.I.-A.B.A. ENVTL. & TOXIC TORT LITIG. 3, 18.
133. Tuepker v. State Farm Fire & Cas. Co., 507 F.3d 346, 348 (5th Cir. 2007).
134. Id. at 349.
135. Id.
136. Id.
137. Id.

216 TEXAS WESLEYAN LAW REVIEW [Vol. 16
water is involved, the court held the anti-concurrent clause ambiguous
and ineffective. 138
Because Leonard governed the case, the Fifth Circuit held that the
anti-concurrent clause was not ambiguous and should be enforced. 139
According to the court, “indivisible damage caused by both excluded
perils and covered perils or other causes is not covered” under the
anti-concurrent clause. 140
The difference between Tuepker and Leonard is that the Tuepkers
did not have a house to evaluate the damages caused solely by wind.
At least in Leonard, the homeowners were able to recover for the loss
caused exclusively by wind, albeit a small amount. 141 In Tuepker, it
was impossible to determine the damage caused by the wind prior to
the storm surge. 142 This is the problem that Hurricane Ike litigants
may face. Without speculating how much damage was caused solely
by wind, it is impossible to ascertain the exact amount of damage and
recover the segregated amount.
Another problem that arises in slab cases is the actual cause of the
loss. Almost all hurricanes produce tornados 143 and it is not out of the
question for a house to be completely leveled by a tornado prior to a
storm surge, leaving the possibility open that a covered peril destroyed
the house rather than an excluded peril.
C. Broussard v. State Farm Fire & Casualty Company
The Broussards lost their house in 2005 to Hurricane Katrina. 144
The house was insured through State Farm and the policy covered
damage caused by windstorm. 145 The policy also contained an anticoncurrent
clause. 146 Defending on the anti-concurrent clause, State
Farm denied the Broussards’ claim. 147 Subsequently, the Broussards
filed suit arguing that their house was destroyed by “tornadic
winds.” 148
The Southern District of Mississippi found that the Broussards’
house was “destroyed during Hurricane Katrina,” that the hurricane
was a “windstorm,” and that windstorm was covered under the insur-
138. Id.
139. Id. at 354.
140. Id.
141. Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 426 (5th Cir. 2007), cert.
denied, 128 S. Ct. 1873 (2008).
142. Tuepker, 507 F.3d at 348.
143. Bill McCaul, FAQ: Hurricanes, Typhoons, & Tropical Cyclones http://www.
aoml.noaa.gov/hrd/tcfaq/L3.html (last visited Sept. 7, 2009).
144. Broussard v. State Farm Fire & Cas. Co., 523 F.3d 618, 622 (5th Cir. 2008).
145. Id. at 622–23.
146. Id. at 623.
147. See id. at 623–24.
148. Id.

2010] THE ANTI-CONCURRENT CLAUSE 217
ance policy. 149 Because the house was destroyed by a covered peril,
according to the court, State Farm had the burden to prove the loss
was the result of an excluded peril. 150 State Farm’s expert could not
distinguish between the damage caused by wind from the damage
caused by water because the house was completely destroyed. 151 As a
result, the court held that State Farm did not meet its burden of proof
that the destruction was caused by an excluded peril. 152
In reversing the district court, the Fifth Circuit held that “Hurricane
Katrina’s winds were not strong enough to cause structural damage to
the home” and remanded the case for a new trial. 153
Broussard is a good example of the battle of the experts and what
Texas courts may do in the event of Hurricane Ike litigation surrounding
slab cases. The Fifth Circuit looked at the testimony of the experts
to determine that the wind produced by Hurricane Katrina was not
strong enough to completely destroy the house. 154 Similarly, Texas
courts will likely rely on expert testimony in determining whether
Hurricane Ike’s winds were strong enough to create a total loss. Because
slab cases leave nothing on which to base an expert opinion,
these cases will likely be a battle of the experts.
The Katrina litigation that has transpired in the Fifth Circuit has
paved a road for the Texas courts to uphold anti-concurrent clauses in
future Hurricane Ike litigation. The problem the anti-concurrent
clause presents to policyholders is that it has the effect of denying coverage
for damages that are covered under the policy, especially in the
event of a hurricane. The slab cases are the most vulnerable because
of the lack of damage to examine in determining wind from water
damage.
V. PROBLEMS AND PROPOSED SOLUTIONS TO THE
ANTI-CONCURRENT CLAUSE
As discussed earlier, Texas courts have been dealing with concurrent
causes of damage since at least the late 1800s. 155 Consistently,
Texas courts will not allow an insured to recover for damages caused
by an excluded peril. 156 Rather, the courts, and later Rule 94 of the
149. Id. at 623.
150. Id.
151. Id.
152. Id.
153. Id. at 625.
154. Id.
155. Pelican Fire Ins. Co. v. Troy Co-Op. Ass’n., 77 Tex. 225, 226–27, 13 S.W. 980,
981 (1890).
156. See id at 226–27, 13 S.W. at 981; Palatine Ins. Co. v. Petrovich, 235 S.W. 929,
930 (Tex. Civ. App.—Galveston 1917, no writ); Coyle v. Palatine Ins. Co., 222 S.W.
973, 976 (Tex. Comm’n App. 1920, judgm’t adopted); Travelers Indem. Co. v. McKillip,
469 S.W.2d 160, 163 (Tex. 1971).

218 TEXAS WESLEYAN LAW REVIEW [Vol. 16
Texas Rules of Civil Procedure, require the insured to segregate the
damages caused by included and excluded perils. 157
While exclusionary clauses allow the insured to segregate and recover
damages caused by a covered peril, 158 anti-concurrent clauses
do not. 159 Essentially, the anti-concurrent clause allows coverage to
be denied for covered perils if the covered peril combines concurrently
or sequentially with an excluded peril. Thus, even if damage is
obviously the result of wind, the wind damage cannot be segregated
from the water damage if it combined with the water to create the
loss.
Although Texas courts have come across anti-concurrent clauses, 160
there is not a single case in Texas that has applied the anti-concurrent
clause to slab cases. In a situation like a slab case, it is impossible to
determine how much damage was caused solely by wind, solely by
water, and how much damage was caused by the combination of wind
and water. 161 As a result, homeowners (or former homeowners) affected
by Hurricane Ike may not recover anything for the loss of their
house. Because anti-concurrent clauses have the legal effect of denying
claims for a loss that was covered under the insurance policy,
Texas courts should not uphold the clause.
A. Courts Should Render the Clause Unenforceable
Texas courts should render the anti-concurrent clause unenforceable
as one solution. The Fifth Circuit held that the policyholders can
prevail over the anti-concurrent clause by proving that the clause is
contrary to “caselaw, statutory law, or public policy.” 162 The following
section discusses the probability of prevailing over the anti-concurrent
clause in Texas courts in the manner required by the Fifth Circuit.
1. Texas Case Law
According to the Fifth Circuit, one way to prevail over an anti-concurrent
clause is to have case law that does not allow an insurance
company to preclude recovery for concurrent causes of damage. 163
But, policyholders are unlikely to prevail over the anti-concurrent
157. Palatine Ins. Co. v. Coyle, 196 S.W. 560, 560 (Tex. Civ. App.—Galveston
1917), aff’d, 222 S.W. 973 (Tex. Comm’n App. 1920, judgm’t adopted); McKillip, 469
S.W.2d at 163; TEX. R. CIV. P. 94.
158. See Coyle, 196 S.W. at 565; McKillip, 469 S.W.2d at 163.
159. See Wong v. Monticello Ins. Co., No. 04-02-00142-CV, 2003 WL 1522938 at *1
(Tex. App.—San Antonio Mar. 26, 2003, pet. denied); Lexington Ins. Co. v. Unity/
Waterford-Fair Oaks, Ltd., No. Civ. A. 399CV1623D, 2002 WL 356756, at *4–5 (N.D.
Tex. Mar. 5, 2002).
160. See Wong, 2003 WL 1522938, at *1; Lexington Ins. Co., 2002 WL 356756, at *4.
161. See Cohen & Rosenberg, supra note 120, at 157.
162. See Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 426 (5th Cir. 2007),
cert. denied, 128 S. Ct. 1873 (2008).
163. Id.

2010] THE ANTI-CONCURRENT CLAUSE 219
clause by relying on Texas case law. Based on the decisions in Wong
and Lexington, in which Texas courts have held the anti-concurrent
clause is enforceable, 164 future Hurricane Ike litigation will likely uphold
and enforce the clause.
Further, Texas courts may seem reluctant to render the anti-concurrent
clause unenforceable because it will limit the parties’ freedom to
contract. By rendering the anti-concurrent clause unenforceable, insurance
companies may have to raise insurance premiums in the event
they have to pay for concurrent causes of damage that they would not
otherwise be required to pay. Some consumers may wish to take the
risk of having the anti-concurrent clause in the policy in exchange for
lower premiums. Rendering the clause unenforceable would limit the
consumer’s ability to take that risk and freely contract.
Although Texas courts may hesitate to limit the freedom to contract,
insurance policies are not the type of negotiable contracts that
allow consumers to freely dictate the terms of the contract. An insurance
policy is an adhesion contract and the consumer can take it or
leave it. Thus, hesitation by the courts to limit the freedom to contract
is somewhat unwarranted because the consumer never had the freedom
to negotiate the policy.
Because of the unwarranted fear of limiting the freedom to contract,
coupled with the Wong and Lexington decisions, 165 Texas courts
are unlikely to render the anti-concurrent clause unenforceable based
on Texas case law.
2. Texas Statutory Law
Another way to prevail over the anti-concurrent clause, according
to the Fifth Circuit, is to show that the clause violates statutory law. 166
But Texas statutory law requires that insurance policies be adopted by
the Texas Insurance Commissioner. 167 The commissioner may disapprove
a policy if it contains provisions that are unjust, deceptive, or
violate public policy. 168
In Leonard, the Fifth Circuit held that the anti-concurrent clause
did not violate statutory law because the clause was approved by the
state insurance commissioner. 169 Hurricane Ike litigants will most
likely not prevail over the anti-concurrent clause by arguing it violates
Texas statutory law based on the reasoning in Leonard and current
Texas statutory law.
Although the current state of Texas statutory law is stacked against
policyholders, Texas residents should urge the Texas Legislature to
164. Wong, 2003 WL 1522938, at *1; Lexington Ins. Co., 2002 WL 356756, at *4–5.
165. Wong, 2003 WL 1522938, at *1; Lexington Ins. Co., 2002 WL 356756, at *4–5.
166. Leonard, 469 F.3d at 431.
167. TEX. INS. CODE ANN. art. 5.35(a) (Vernon 2009).
168. Id. art. 5.35(g)(1)(B).
169. Leonard, 469 F.3d at 435–36.

220 TEXAS WESLEYAN LAW REVIEW [Vol. 16
change the current law. The legislature can create a law that prohibits
insurance policies from containing anti-concurrent clauses. Until the
Texas Legislature creates new law, policyholders are unlikely to prevail
by arguing the anti-concurrent clause violates Texas statutory law.
3. Texas Public Policy
A third way for courts to render the anti-concurrent clause unenforceable
is to conclude that the clause is against public policy. In
Puckett v. United States Fire Insurance Company, the insurance company
sought a determination that it was not obligated to pay damages
arising out of a deadly plane crash. 170 The insurance policy contained
a clause that allowed the insurance company to suspend coverage “if
the aircraft . . . airworthiness certificate is not in full force and effect.”
171 A certificate is issued when all maintenance requirements
are conducted through an inspection. 172 Although the certificate had
lapsed, the failure to inspect the plane did not cause the plane to
crash. 173
The estate of the insureds argued that to allow an insurance company
to escape liability when the breach of contract did not contribute
to the loss is unconscionable and against public policy. 174 The Texas
Supreme Court agreed, and held that it would be against public policy
to allow an insurance company to avoid liability on a technicality. 175
The court further stated that to hold otherwise would be to allow the
insurance company to “collect a premium but . . . have no exposure to
risk because the policy would no longer be effective.” 176
The estate of the insureds in Puckett successfully argued that the
clause at issue was against public policy. Policyholders dealing with
anti-concurrent clauses could use this argument to their advantage. It
could be argued that to allow the insurance company to avoid liability
for wind damage because of an anti-concurrent clause is against public
policy because the insurance company is collecting a premium, yet insulating
itself from risk. By insulating itself from any claim that involves
wind and water damage concurrently, the insurance company
has no exposure to risk, which according to Puckett is against public
policy in Texas. 177
If Hurricane Ike litigants are going to argue that the anti-concurrent
clause should not be enforced, Texas courts, and specifically federal
courts, may follow the Fifth Circuit holding and require litigants to
170. Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 937 (Tex. 1984).
171. Id.
172. Id.
173. Id.
174. Id. at 938.
175. Id.
176. Id.
177. Id.

2010] THE ANTI-CONCURRENT CLAUSE 221
prove that the clause violates Texas “caselaw, statutory law, or public
policy.” 178 Based on the current state law and statutory law in Texas,
litigants are unlikely to prevail over the anti-concurrent clause. A
public policy argument may be the only route available for litigants to
invalidate the anti-concurrent clause.
B. If Courts Uphold the Clause, the Clause Should be Made
Apparent to Policyholders
Another problem with the anti-concurrent clause is that it is another
clause stuck in an adhesion contract that the average layperson
is unable to decipher. Most policyholders probably do not know that
the clause is in their policy.
Although the parties to a contract are deemed to know and understand
the terms of the contract and its legal effects, 179 the Texas legislature
should require that insurance companies make the clause
apparent. This can be done by placing the clause in a larger and
bolded font. Or it could be done by requiring the policyholder to sign
an acknowledgement that he or she has read the clause and understands
its legal effect.
By making the clause apparent to the policyholder, the policyholder
is cognizant of the type of coverage that the insurance company is
providing. Some policyholders do not even realize that their homeowner’s
insurance policy excludes flood or that they must obtain flood
insurance through a separate policy backed by the National Flood Insurance
Program. 180 In fact, sixty-one percent of Texas residents affected
by Hurricane Ike did not have flood insurance. 181 By making
the clause apparent to the policyholder, the policyholder understands
the clause and its legal effects, as well as understands that a separate
policy to cover flood damage is needed.
C. Establish a New, Single Form of Insurance
Under the current system of insurance coverage, the prudent homeowner
who lives on the Texas Gulf Coast should obtain a homeowner’s
insurance policy, a flood insurance policy, and a windstorm
insurance policy (if windstorm is not covered under the homeowner’s
insurance policy). But, the current system is broken. After a major
disaster strikes, the windstorm insurance policy is pointing the finger
at the flood insurance policy. The flood insurance policy is pointing
the finger at the windstorm insurance policy. And the homeowner’s
178. Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 430 (5th Cir. 2007), cert.
denied, 128 S. Ct. 1873 (2008).
179. In re Big 8 Food Stores, Ltd., 166 S.W.3d 869, 878 (Tex. App.—El Paso 2005,
orig. proceeding).
180. See FloodSmart.gov, Resources: Flood Facts, http://www.floodsmart.gov/flood
smart/pages/flood_facts.jsp.
181. See IMPACT REPORT, supra note 17, at 2.

222 TEXAS WESLEYAN LAW REVIEW [Vol. 16
insurance policy is pointing the finger at both the windstorm and flood
insurance policy. Stuck in the middle of all of this finger pointing is
the prudent homeowner who is burdened by chasing around the different
insurance companies in the hopes that one of the companies
will “pay up.”
Therefore, another solution to the anti-concurrent clause is to create
a new form of insurance that covers any and all damage that is the
result of a hurricane, such as wind, water, tornado, etc. The Texas
Supreme Court suggested creating a new type of insurance in Hardware
Dealers Mutual Insurance Company v. Berglund. 182 One way,
according to the Court, is to lobby the insurance industry and regulatory
authorities. 183 Instead of having an “all risks” policy or a “named
peril” policy with exclusions, regulatory authorities could issue hurricane
insurance policies that cover any and all damages caused by a
hurricane, including water damage. 184 Homeowners can purchase
peace of mind by knowing that their house is protected, and insurers
will be able to charge the necessary premium to ensure it can cover
any losses caused by a hurricane.
A policy that covers all hurricane damage will (1) decrease the need
for insurance companies to set aside costs for litigation; (2) eliminate
the need for experts used to segregate damages; (3) eliminate the
need to obtain different types of insurance for different types of damage;
and (4) decrease the amount of litigation which will in turn reduce
the amount of judicial resources necessary to withstand litigation
after a major hurricane.
VI. THE INSURANCE COMPANIES’ ARGUMENT
Although this comment discusses the unfairness of the anti-concurrent
clause and why the clause should not be enforced, the insurance
companies have an interest in making a profit and protecting themselves
from claims in which the insurance companies did not set aside
money to cover. An example of such claims is concurrent causes of
damage caused by covered and non-covered perils.
The insurance companies cannot be blamed for wanting to insulate
themselves from claims they did not intend to cover. As unfair as the
consumer may believe the insurance companies are acting, the consumer
had the opportunity to educate himself or herself of the contents
and legal effects of the insurance policy.
VII. CONCLUSION
After Hurricane Katrina, the anti-concurrent clause was used by insurance
companies to deny recovery to homeowners along the Gulf
182. Hardware Dealers Mut. Ins. Co. v. Berglund, 393 S.W.2d 309, 314 (Tex. 1965).
183. See id.
184. Id.

2010] THE ANTI-CONCURRENT CLAUSE 223
Coast. 185 The clause allowed the insurance companies to deny recovery
because concurrent causes of damage, water and wind, combined
to damage or destroy the insured’s house.
The damage and destruction that Texas homeowners received after
Hurricane Ike are similar to those received by Hurricane Katrina. Because
water and wind combined currently to damage or destroy
houses, insurance companies may try to deny recovery based on an
anti-concurrent clause in the policy.
Although the San Antonio Court of Appeals and the Northern District
of Texas have upheld the anti-concurrent clause, the Texas Supreme
Court has not ruled on the issue. The Texas Supreme Court
should invalidate the anti-concurrent clause because it denies recovery
for a peril that is covered under the insurance policy. Further, upholding
the clause violates public policy because it allows the
insurance company to insulate it from exposure to risk. Instead of
validating the anti-concurrent clause and denying recovery to the insured,
the court should continue to allow the segregation of damages
in the event of concurrent causation.
By invalidating the anti-concurrent clause and requiring insurance
companies to pay for damages that are covered under the insurance
policy, Texas will send a message to insurance companies to fix the
broken system. Not only should the judiciary invalidate the anti-concurrent
clause, but the legislature should create a single form of insurance
that covers any and all damage caused by a hurricane. This way,
the prudent homeowner can realistically purchase peace of mind.
185. Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 430 (5th Cir. 2007), cert.
denied, 128 S. Ct. 1873 (2008); Tuepker v. State Farm Fire & Cas. Co., 507 F.3d 346,
349 (5th Cir. 2007).

THIRD-PARTY SPECIAL NEEDS TRUST:
DEAD OR ALIVE IN A UNIFORM
TRUST CODE WORLD
By Jennifer Brannan
I. INTRODUCTION: A LIFE CHANGED...................... 249 R
II. SPECIAL NEEDS TRUSTS ................................ 250 R
A. Self-Settled Special Needs Trusts .................... 251 R
B. Third-Party Special Needs Trust ..................... 252 R
C. Why do we need Special Needs Trusts? ............. 253 R
D. Uses of Special Needs Trust Funds .................. 255 R
III. SPECIAL NEEDS TRUST CREATION ...................... 256 R
A. Trust Language ..................................... 256 R
B. Trustee Selection .................................... 257 R
C. Trustee Duties ....................................... 258 R
IV. TEXAS TRUST LAW ..................................... 258 R
A. Texas Property Code ................................ 259 R
B. Texas Probate Code ................................. 259 R
C. Social Security Program Operations Manual
System .............................................. 260 R
V. UNIFORM TRUST CODE ................................. 261 R
A. UTC History ........................................ 261 R
B. UTC Uses ........................................... 262 R
VI. UTC AND THIRD-PARTY SPECIAL NEEDS TRUSTS ...... 263 R
A. Death of the Third-Party Special Needs Trust in a
UTC World ......................................... 263 R
1. Discretionary and Support Trust Distinction .... 263 R
2. Good Faith Requirement ....................... 265 R
3. Spendthrift Provisions .......................... 266 R
B. Third-Party Special Needs Trust Alive and Well in a
UTC World ......................................... 267 R
1. Distinction of Support Trusts and Discretionary
Trusts ........................................... 267 R
2. Spendthrift Trust Provisions .................... 269 R
VII. PROPOSAL .............................................. 270 R
I. INTRODUCTION: A LIFE CHANGED
On March 9, 2007, a crowd gathered to rejoice in the birth of a longawaited
baby girl. Josh and Leigh’s seemingly perfect pregnancy was
about to come to an end with the birth of their first daughter, Jadyn.
As Leigh gave one last push and waited to meet her new daughter, the
doctor discovered that something was wrong. The baby was not
breathing and had slight physical deformities. Jadyn was immediately
transported via life-flight to a hospital over an hour away that could
249

250 TEXAS WESLEYAN LAW REVIEW [Vol. 16
provide the necessary care for her. The next day, Josh and Leigh
awoke to a life that they could have never anticipated. Jadyn was diagnosed
with a genetic disorder called CHARGE syndrome that will
cause her to live a life plagued with health problems—delayed growth,
respiratory issues, hearing concerns, and a weak immune system causing
her to be susceptible to constant infections.
Five months of care in the Neonatal Intensive Care Unit and millions
of dollars in medical expenses later, the two-income middle-class
family was forced to apply for governmental assistance. In order to
give Jadyn the twenty-four hour care she needed, Leigh quit her job,
and Josh had to deplete his life savings so that they could qualify for
the Medicaid which was desperately needed. Immediately after
Jadyn’s birth, there was an outpour from the community to help in
someway. Donations to the family seemed to be the obvious answer,
but under the current federal Social Security Disability system these
added assets would cause Jadyn to lose the governmental assistance
that allowed her to see the best cardiologist, neurologist, and ear,
nose, and throat doctors in the state.
Is there anything that could be done to help this family? Under the
current Texas Trust Code, a third-party special needs trust could be
created to resolve this dilemma. The trust would allow a grandparent
or other third party to create a trust for Jadyn to ensure that she
would be afforded the same quality of life she would have if she did
not have special needs and still be able to retain the much needed
governmental assistance. Another benefit to this trust is that after
Jadyn’s death, instead of the remaining amount in the trust repaying
the government, the balance could be dispersed as Jadyn would like.
Under the Uniform Trust Code, however, this option may not be possible.
The purpose of this Comment is to argue that Texas should not
adopt the Uniform Trust Code because doing so could negatively impact
the ability for disabled individuals and their families to receive
assistance through third-party special needs trusts.
II. SPECIAL NEEDS TRUSTS
A special needs trust, also known as a supplemental needs trust,
allows disabled individuals to receive funds from gifts, settlements, or
any other funding while retaining eligibility to receive “means tested”
governmental benefits such as Social Security Income. 1 Special needs
trust funds are not considered to belong to the beneficiary when determining
eligibility for governmental assistance because the trust
funds can only be used to supplement the disabled person’s quality of
1. Elderlawanswers.com, Disability Planning, http://www.elderlawanswers.com/
elder_info/elder_article.asp?id=2742#10 (last visited Oct. 24, 2009); The Center for
Special Needs Trust Administration, What are Special Needs Trusts?, http://www.
sntcenter.org/index.html (last visited Aug. 25, 2009) [hereinafter Center for Special
Needs Trust Administration].

2010] THIRD-PARTY SPECIAL NEEDS TRUST 251
life. 2 The trust provides the disabled person the opportunity for luxuries
and comforts that he or she would otherwise not be able to enjoy
if forced to depend solely on governmental assistance. 3
A. Self-Settled Special Needs Trusts
Because of this double-edged sword, the federal government created
statutes that provide for special needs trusts which do not affect a
disabled beneficiary’s ability to receive public benefits. In 1993, Congress
passed federal law that allows a person with disabilities to retain
their resources in a special needs trust under exceptions to the amendments
of the OMNIBUS BUDGET AND RECONCILIATION ACT (OBRA-
93). 4 These trusts are considered self-funded trusts because the assets
used to fund the trust belong to the disabled beneficiary. 5 This type of
trust shelters the assets that were already “in the pocket” of the disabled
person, such as a homestead or other real or personal property,
from the assets that are considered when determining eligibility for
governmental assistance. 6 The funds placed in the trust are put into a
“non-countable” category and allow the individual to preserve eligibility
for governmental assistance. 7 To become a beneficiary of a special
needs trust, the individual must be considered “disabled” as
defined by 42 U.S.C. § 1382c(a)(3)(A), (C). 8 The individual “must be
unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to
last for a continuous period of not less than twelve months (or, in the
case of a child under the age of eighteen, if he suffers from any medically
determinable physical or mental impairment of comparable
severity).” 9
Federal legislatures created two types of self-funded trusts. First,
the “Payback” or “(d)(4)(A)” trust that is permitted through 42
U.S.C. § 1396p(d)(4)(A). 10 This type of trust is created for the sole
2. Elderlawansers.com, supra note 1.
3. Id.
4. JEFFREY H. MINDE, SUPPLEMENTAL NEEDS TRUSTS: SOME FREQUENTLY
ASKED QUESTIONS, http://www.nsnn.com/frequently.htm (last visited Oct. 24, 2009).
5. Bernard A. Krooks & Andrew Hook, What Attorneys Need to Know About
Special Needs Trusts, ALI-ABA EST. PLAN. COURSE MATERIALS J., Oct. 2005, at 5, 6,
available at http://files.ali-aba.org/thumbs/datastorage/lacidoirep/articles/EPCMJ_
EPCMJ0510-KROOK_thumb.pdf; Minde, supra note 4.
6. Minde, supra note 4.
7. Id.
8. HELEN B. WILS, “SPECIAL NEEDS” TRUSTS UNDER THE TEXAS PROPERTY
CODE AND THE TEXAS PROBATE CODE 2 (2003), http://www.texasguardianship.com/
Library/SpecialNeedsTrusts.pdf.
9. 42 U.S.C.A. § 1382c(a)(3)(A), (C) (West Supp. 2009); WILS, supra note 8, at
2–3.
10. 42 U.S.C.A. § 1396p(d)(4)(A) (West Supp. 2009).

252 TEXAS WESLEYAN LAW REVIEW [Vol. 16
benefit of a disabled person under the age of sixty-five. 11 The trust is
created by a parent, grandparent, legal guardian, or court with the
assets of the disabled person. 12 After the disabled individual’s death,
the funds remaining in the trust must be repaid to the state Medicaid
agency up to an amount that was provided by the agency to the disabled
person. 13 There is no obligation however to conserve funds for
the state. 14
The second type of federally permitted trust is the “Pooled” or
“(d)(4)(C)” trust which is permitted through 42 U.S.C.
§ 1396p(d)(4)(C). 15 This type of trust is created and managed by a
non-profit agency. 16 Assets are pooled from other beneficiaries for
investment and management purposes, and each beneficiary maintains
a separate sub-account. 17 The account is created for the sole
benefit of a disabled person by the individual’s parents, grandparents,
legal guardian, court, or the disabled individual themselves. 18 On the
individual’s death, the remaining amount left in the sub-account is distributed
to the other disabled individuals known by the agency. 19 A
Pooled trust would most likely be created when the family cannot
identify a suitable trustee, the bank trust fees are costly, or the family
prefers that the amount remaining in the trust after the beneficiary’s
death be passed to disabled individuals rather than be given back to
the state. 20 The main difference between the two federally created
trusts is that (d)(4)(C) pooled trust can be created by the disabled
individual and the (d)(4)(A) trust cannot. 21
B. Third-Party Special Needs Trust
The third type of special needs trusts is the third-party special needs
trust. This type of trust is created and funded by the assets of someone
other than the disabled beneficiary. 22 A third-party special needs trust
can be created by a third party through a revocable inter vivos trust,
irrevocable inter vivos trust, or will. 23 At the disabled individual’s
11. Krooks & Hook, supra note 5, at 6.
12. Id.
13. Id.
14. Law Offices of Carol Bertsch, Special Needs Trusts: Making Life Better for
Persons with Disabilities, www.assistingseniors.com/media/special_needs.ppt (last visited
Aug. 23, 2009).
15. Krooks & Hook, supra note 5, at 6.
16. Id.
17. Id.
18. Id.
19. See id.; Daniel Blauw, Advantages of a Special Needs Trust, RAINBOWVISIONS,
Fall 2007, at 7, 31, available at http://www.rainbowrehab.com/Education_&_
Publications/pdf/visions/2007/Fall07.pdf.
20. Blauw, supra note 19.
21. Krooks & Hook, supra note 5, at 6.
22. Id.
23. Id. at 7.

2010] THIRD-PARTY SPECIAL NEEDS TRUST 253
death, the property can pass as designated through a will, trust agreement,
or by exercise of power of appointment to whomever the beneficiary
designates. 24 One benefit of this type of trust is that it allows
gifts or bequests to accumulate in a trust for the disabled person which
will be dispersed before the parents of the disabled individual die. The
primary difference between the federally permitted trusts and the
third-party special needs trust is that the amount remaining in the
trust after the disabled beneficiary’s death can be used in any manner
the beneficiary desires. There is no requirement to repay the state or
donate back to a designated pool. As long as the disabled beneficiary
cannot revoke the trust or direct the use of the trust for his or her own
support, the trust is not considered when determining eligibility for
governmental assistance. 25
As a practical matter, the term supplemental needs trusts and special
needs trusts are often used interchangeably. 26 The Social Security
Administration refers to self-settled trusts or the “d(4)(A)” and
“d(4)(C)” trusts as “special needs trusts.” Practitioners usually refer
to third-party special needs trusts as “supplemental needs trusts” and
first-party self-settled trusts as “special needs trusts.” 27 In this Comment,
the terms will be used interchangeably.
C. Why do we need Special Needs Trusts?
Families who qualify for the Social Security Income (SSI) program
receive many benefits that can assist in their daily living. 28 Benefits
such as Medicaid, Section 8 housing, rehabilitative care, and transportation
assistance can help reduce the stresses caused from having a
child with special needs. 29 While the program offers various vital benefits
to a family, it requires that parents of disabled children deplete
their assets, have a low monthly income, and save very little funds for
the future. 30 Therefore, it is extremely difficult to increase the disabled
child’s quality of life without losing the much needed assistance.
31 This dilemma, which is inherent in the system, creates the
need for a special needs trust.
Because it can be extremely costly to raise a child with disabilities,
families of disabled children rely on the assistance they receive from
the SSI program to assist with their day-to-day survival. 32 Under the
24. Id.
25. Id. at 6.
26. Id. at 7.
27. Id.
28. Center for Special Needs Trust Administration, supra note 1.
29. Id.
30. Id.
31. Id.
32. Answers to Social Security Questions, http://ssa-custhelp.ssa.gov (search “Do
disabled children qualify for benefits?” hyperlink) (last visited Sept. 7, 2009) [hereinafter
Answers to Social Security Questions].

254 TEXAS WESLEYAN LAW REVIEW [Vol. 16
SSI program, a child under the age of 18 can receive benefits based on
a disability if the child has a mental or physical impairment or a combination
of impairments that seriously limits his or her activities. 33 The
condition must have lasted or be expected to last at least one year or
cause death. 34 A second requirement is that the income and resources
of the parents and child are within the allowed limits provided for by
the program. 35
The SSI program considers income broken down into several categories:
earned, unearned, in-kind, and deemed income. 36 Wages of the
child’s parents are considered earned income while social security
benefits, unemployment benefits, and pension plan benefits are considered
unearned income. 37 Food or shelter received for free or for
lower than fair market value is classified as in-kind income. 38 Income
is important to examine because it determines the amount of benefit
the disabled person receives from the program. The more income a
family has, the fewer benefits they will receive, and if too much income
is earned the family may not qualify for any assistance at all. 39
Income is reviewed to determine whether it will be considered
“countable” or whether it will be classified as “not-countable.” 40
“Countable” income includes amounts such as the value of food
stamps, needs-based assistance received that is funded by a State or
local government, small amounts of income received irregularly or infrequently,
and money someone else spends to pay expenses for items
other than food or shelter (e.g., someone else pays for telephone or
medical bills). 41 These items are subtracted from the gross income to
determine the “countable” income. 42 The “countable” income is then
subtracted from the SSI Federal Benefit Rate to determine the
amount of monthly benefits. 43
The assets owned by the parents of a disabled child are considered
“resources.” “Countable resources” include cash, bank accounts, land,
life insurance, personal property, vehicle, other assets that could be
exchanged for cash, and deemed resources. 44 The value of the family’s
33. Social Security Administration, Disability Programs: Disability Starter Kits,
http://www.socialsecurity.gov/disability/disability_starter_kits_child_factsheet.htm#di
sability (last visited Aug. 23, 2009).
34. Id.
35. Answers to Social Security Questions, supra note 32.
36. Understanding Social Security Income: SSI Income, http://www.socialsecurity.
gov/ssi/text-income-ussi.htm (last visited Oct. 24, 2009).
37. Id.
38. Id.
39. Id.
40. Id.
41. Id.
42. Id.
43. Id.
44. Understanding Social Security Income: SSI Resources, http://www.social
security.gov/ssi/text-resources-ussi.htm (last visited Oct. 24, 2009).

2010] THIRD-PARTY SPECIAL NEEDS TRUST 255
resources is important because it determines whether the child can
receive benefits. 45 Assets that are “not-countable” are things such as
the home the family lives in, household goods, and one vehicle. 46 The
limit for “countable resources” is $2,000 for an individual and $3,000
for a couple. 47
The proceeds from the trust are not considered “countable” income
or resources, and therefore these payments do not put the person at
risk of losing their governmental assistance. 48 The most commonly
used special needs trust to prevent the loss of benefits is the thirdparty
special needs trust. 49 When the third party sets up the trust, the
property goes directly into the trust which means the beneficiary technically
never owns the property. 50 The trust does not create an entitlement
by the beneficiary. 51 Payments are made to the beneficiary in
the sole discretion of the trustee. 52 Because the beneficiary has no
right to any benefit, the property is considered “not-countable” for
the purposes of receiving governmental assistance. 53
D. Uses of Special Needs Trust Funds
Once the disabled person’s medical needs are adequately provided
for through governmental assistance, the special needs trust can be
used to supply the person with an improved quality of life. 54 The main
limitation on the use of funds from a special needs trust is that it can
not be used for the basic support of the child. 55
There are many creative ways to use the trust funds to supplement
the needs of the child without being considered basic support of the
child. Funds from the trust could be used to acquire additional
caregiving services such as domestic or personal assistants to give the
primary caregiver a much needed break. The primary caregivers could
purchase a wheelchair accessible van or other customized vehicle and
pay for the repair and insurance of the vehicle from the trust. 56 The
assets from the trust could also be used to improve the family’s living
45. Id.
46. Id.
47. Id.
48. Randy Drewett, SNTs In a UTC Environment: Is Third-Party Disability Planning
at Risk?, 71 TEX. B.J. 114, 115–16 (2008).
49. The Law Reform Soapbox, http://www.lawreformsoapbox.com/2008/01/
special-needs-trusts-for-the-p.html (Jan. 18, 2008).
50. Id.
51. PLAN: Planned Living Assistance Network, Special Needs Trusts, http://www.
planctx.org/trusts.htm (last visited Aug. 31, 2009) [hereinafter PLAN].
52. Id.
53. Id.
54. Kristen Lewis Denzinger, Financial Planning: Special Needs Trusts, ABA GEN-
ERAL PRACTICE, SOLO & SMALL FIRM DIVISION, Feb. 2005, available at http://www.
abanet.org/genpractice/newsletter/lawtrends/0501/estate/financialplanning.html.
55. See id.
56. Id.

256 TEXAS WESLEYAN LAW REVIEW [Vol. 16
arrangements by renovating the home to offer better access for the
disabled person or paying for a “luxury” skilled nursing facility. 57 In
addition, the trust could pay for recreational activities, vacations, educational
and training opportunities, medical equipment, and professional
services including attorneys, accountants, and claims
processors. 58 The main requirement is that the funds are used for the
benefit of the beneficiary for supplementary needs only, not for food,
clothing, or shelter. 59
If the money is used for non-supplementary support, two things
could happen. 60 Money paid in cash to the beneficiary or paid for
food, shelter, or clothing, would be considered taxable income to the
beneficiary. 61 Also the funds would be considered “countable” in determining
governmental aid. Depending on the amount received, the
child could potentially lose all of his or her benefits. 62
III. SPECIAL NEEDS TRUST CREATION
A. Trust Language
To create a general trust there must only be intent to create a trust,
the existence of trust property, and readily ascertainable beneficiaries.
63 To create a special needs trust, however, the trust must state
that its intended purpose is to provide “supplemental and extra care”
to a beneficiary above and beyond what is received from the government.
64 It must also state that it is not intended to provide basic support
to the beneficiary. 65 The trust should refer to the specific
portions of the Social Security Operations Manual that are relevant
for trust creation. 66 The trust language should make it impossible for
the disabled child to demand distribution, give the trustee full discretion
to make distributions as he or she sees fit, and specifically state
that the trust should be administered so that the child does not lose his
or her eligibility for benefits. 67 For a self-settled trust, the language
must also contain a payback provision to Medicaid. 68 Finally, the trust
should contain language that explains the exception from the OBRA-
57. Id.
58. Id.
59. Id.; PLAN, supra note 51.
60. PLAN, supra note 51.
61. Id.
62. Id.
63. See JESSE DUKEMINIER ET AL., WILLS, TRUSTS, AND ESTATES 498–518 (7th ed.
2005).
64. Minde, supra note 4.
65. Id.
66. Id.
67. Sherrie Bennett, Special Needs Trusts, http://trusts-estates.lawyers.com/estateplanning/Special-Needs-Trusts.html
(last visited Aug. 23, 2009).
68. Minde, supra note 4.

2010] THIRD-PARTY SPECIAL NEEDS TRUST 257
93 and provisions of the United States Code that authorize the creation
of the special needs trust if applicable. 69
B. Trustee Selection
A very important decision that a settlor must make in the process of
creating a special needs trust is designating a trustee. The trustee will
be responsible for distributing the funds and will have discretion in
deciding when to distribute the funds. There are several options a settlor
could consider when designating a trustee.
The first possible trustee would be a responsible family member or
close friend. An important quality to look for in this trustee is the
willingness of the trustee to speak out against the parents and discuss
what is really in the best interest of the beneficiary. 70 The most important
factor is that the trustee cares enough about the beneficiary to
advocate for him or her in any given circumstance. 71 The family member
will not be directly responsible for the care of the beneficiary; they
will only be responsible for making purchases that will be beneficial to
the quality of life of the disabled person. 72 Also, many people consider
priests/preachers or special education teachers qualified to work
with disabled individuals as appropriate trustees. 73
Banks or financial institutions may also serve as trustees. 74 While
these institutions may be very knowledgeable and would likely manage
the funds responsibly, they often charge an annual administration
fee and many times require minimum trust fund amounts. 75 Also,
these institutions will likely not know the everyday needs of the beneficiary;
therefore, it might be useful to have a family member act as
co-trustee. 76
The settlor could also consider creating a committee that would act
as trustee. 77 The committee could consist of a financial planner and
several close family members that work together to provide for the
best interest of the beneficiary. 78 If any committee member could no
longer perform his or her duties, the other members could find a replacement
for such member while still retaining knowledge about the
beneficiary’s needs and desires. 79
69. Id.
70. Martha A. Churchill & Patricia E. Kefalas Dudek, Choosing a Trustee, THE
NAT’L FRAGILE X FOUND., http://www.nfxf.org/html/trustee.htm (last visited Sept. 6,
2009).
71. Id.
72. Id.
73. Id.
74. Id.
75. Id.
76. Id.
77. Id.
78. Id.
79. Id.

258 TEXAS WESLEYAN LAW REVIEW [Vol. 16
Ultimately, the trustee should possess the abilities to advocate for
the disabled person and responsibly manage and administer the trust
assets so that the beneficiary can retain governmental assistance. 80
C. Trustee Duties
Once the trustee has been designated and has accepted the duty,
the trustee is then responsible for a very serious undertaking. 81 The
trustee is held to a standard of performance higher than the performance
of the trustee’s own personal affairs. 82 The trustee now holds
property for another and, therefore, has a fiduciary duty. 83 Every
trustee has several fiduciary duties. 84 In general, these duties include
the duty to carry out terms of the trust agreement, the duty of loyalty
to the beneficiary, the duty to act and invest prudently, the duty to
delegate trustee responsibilities, the duty to maintain books and
records, and the duty to keep the beneficiaries reasonably informed of
trust administration. 85 Also, recently added to the Texas Trust Code is
the duty of the trustee to act in “good faith.” For a special needs trust,
one of the most important responsibilities of the trustee is to make
sure the beneficiary remains eligible for public benefits. 86 Therefore,
it is imperative to remain informed about any changes to the beneficiary’s
benefits and to be aware of all eligibility requirements for benefits.
87 If the trustee does not act with proper diligence, the beneficiary
could bring a claim against the trustee personally for any damages that
the beneficiary sustains. 88
IV. TEXAS TRUST LAW
In Texas, court-created trusts are established pursuant to either
§ 142.005 of the Texas Property Code or § 867 of the Texas Probate
Code. 89 These sections, in conjunction with 42 U.S.C.
§ 1396p(d)(4)(A), create special needs trusts. 90
80. Id.
81. TIMOTHY L. TAKACS, YOU ARE A TRUSTEE OF A SPECIAL NEEDS TRUST:
WHAT DO YOU DO NOW? 2 (2006) http://www.nawrockilaw.com/CM/SpecialNeeds
Trust/You%20are%20a%20Trustee%20of%20a%20Special%20Needs%20Trust.pdf.
82. Id.
83. Id.
84. Id.
85. Id.
86. See id.
87. Id
88. Id.
89. GLENN M. KARISCH, COURT-CREATED TRUSTS IN TEXAS (1998), http://www.
texasprobate.com/articles/courtgmk.htm.
90. WILS, supra note 8, at 3.

2010] THIRD-PARTY SPECIAL NEEDS TRUST 259
A. Texas Property Code
Section 142 trusts are created in suits where the disabled person is a
minor who has no legal guardian or is incapacitated and receives a
settlement or judgment in a personal injury suit. 91 The trust is created
by filing an application to the court where the lawsuit is pending. 92
The trust is required to provide that distributions to the beneficiary be
as the trustee determines is “reasonably necessary for the health, education,
support, and maintenance of the beneficiary.” 93 This language
alone creates a discretionary-support trust and will potentially prevent
the beneficiary from qualifying for public benefits. Section 142.005(g)
of the Texas Property Code, however, provides that the trust language
may depart from the “reasonably necessary” language to incorporate
special needs language necessary to maintain the governmental
assistance. 94
The availability of Section 142 Trusts is limited in two ways. 95 These
trusts can only be created from proceeds of litigation which makes it
extremely difficult to include other types of property. 96 Also, Section
142 Trusts can only be created if there is no legal guardian for the
minor. 97 If there is a guardianship in place or if one comes into place,
this option would not be available. 98
B. Texas Probate Code
The above frustrations with Section 142 trusts spurred the adoption
of the second type of court-created trust, 867 Trusts. In 1993, Texas
adopted provisions that permitted the creation of 867 Trusts on application
of guardian. 99 To establish this type of trust, there must be an
existing guardianship. 100 There are several other requirements that
must be met under this section, most notably is that the trust be established
in the best interest of the beneficiary. 101 For special needs
trusts, the beneficiary’s best interest is served by preserving the ability
to receive governmental assistance. 102 The disbursement language
should include that the funds will be distributed as the trustee determines
necessary for the ward’s health, education, support, and maintenance.
103 However, as in a Section 142 Trust, if this language is used
91. Id. at 4.
92. Id.
93. Id. at 5.
94. Id.
95. KARISCH, supra note 89.
96. Id.
97. Id.
98. Id.
99. Id.
100. WILS, supra note 8, at 8.
101. Id. at 2.
102. Id.
103. Id.

260 TEXAS WESLEYAN LAW REVIEW [Vol. 16
the trust will not qualify as a special needs trust; therefore, the court
can modify the required language. The trust terms should assure that
the trust agreement does not permit disbursement for the beneficiary’s
basic health, education, support, and maintenance. 104 In 1997,
the Texas legislature amended both types of trusts to allow the court
creating the trust to vary the terms of the trust from the terms required
by Texas law so that the trust can qualify as a Medicaid trust
under 42 U.S.C. § 1396p(d)(4)(A). 105 This new provision provides the
means to create a special needs trust. 106
C. Social Security Program Operations Manual System
There are no Texas Codes that govern third-party special needs
trusts. The authority for creating a third-party special needs trust is
found in the Program Operations Manual System (POMS) at Section
POMS SI 01120.200. 107 POMS is published by the Social Security Act
and contains the operating procedures for SSI. POMS defines a trust
as “a property interest whereby property is held by an individual
(trustee) subject to a fiduciary duty to use the property for the benefit
of another (the beneficiary).” 108 POMS defines “availability” of assets
by the trustee’s level of discretion. 109 A pure discretionary trust
gives the trustee full discretion on the time, purpose, and amount of
distributions. 110 If the trust is considered a discretionary trust, then
the trust assets will be considered “not-countable” for governmental
assistance purposes. 111
To determine the “availability” of funds, POMS recognizes a twopronged
test. 112 First, it looks at the beneficiary’s right to revoke, and
second, it looks at the beneficiary’s right to direct the use of the trust
assets. If the trust beneficiary has no right to revoke or compel direct
use of the trust assets for his own support and maintenance, then the
trust assets are not the beneficiary’s resources for SSI purposes. 113
The ability to revoke the trust and direct the use of the trust funds
depends on the trust agreement and/or state law. 114 Trust disbursement
is also governed by POMS. Proper trust administration is cru-
104. Id. at 3.
105. KARISCH, supra note 89.
106. Id.
107. THOMAS D. BEGLEY, JR., SSI/MEDICAID TRUSTS FOR THE ELDERLY AND DIS-
ABLED 8 (2004), available at http://www.begleylawyer.com/Documents/art5.PDF;
Social Security Administration, POMS Section SI 01120.200, http://policy.ssa.gov/
poms.nsf/links/0501120200 (last visited Aug. 31, 2009) [hereinafter POMS Section SI
01120.200].
108. BEGLEY, supra note 107, at 8; POMS Section SI 01120.200, supra note 107.
109. BEGLEY, supra note 107, at 4.
110. Id.
111. Id. at 18.
112. Id. at 8.
113. Id.
114. Id. at 9.

2010] THIRD-PARTY SPECIAL NEEDS TRUST 261
cial, and improper distributions from a proper trust can cause the loss
of public benefits. 115
If the above provisions are followed correctly, a third-party special
needs trust can be created in order to supplement the daily living of a
disabled child while maintaining the child’s ability to receive much
needed public assistance.
V. UNIFORM TRUST CODE
Another source used to create trusts in some states is the Uniform
Trust Code (UTC). The UTC is the first attempt at codifying the law
of trusts, which has its origins in common law. 116 The National Conference
of Commissioners on Uniform State Laws (NCCUSL) approved
the UTC in 2000. 117 The primary reason for drafting the UTC
was the increased use of trusts, nationally and internationally, in both
estate planning and commercial transactions. 118 With the increased
use of trusts came recognition that most states lacked substantial trust
laws. 119 Further, uniform trust acts that were already created were
disorganized. 120 The UTC is a central place to look when trust law
questions arise and provides states with a guide to trust law that is
precise, comprehensive, and easily accessible. 121 The UTC, for the
first time, provides a uniform rule when the law is unclear. 122
A. UTC History
The NCCUSL considered several states’ comprehensive trust statutes,
including Georgia, Indiana, Texas, Washington, and, most notably,
California. 123 The UTC was also drafted in cooperation with the
Restatement (Third) of Trusts, the Restatement (Third) of Property,
Wills and other Donative Transfers, and the Restatement of
Restitution. 124
The drafters completed the draft in approximately seven years, and
it was approved by the Uniform Law Commissioners on August 3,
2000. 125 The NCCUSL Style Committee reviewed the draft, and the
115. Id. at 10.
116. Robert T. Danforth, Trust Law in the 21st Century: Article Five of the UTC and
the Future of Creditors’ Rights in Trusts, 27 CARDOZO L. REV. 2551, 2553 (2006);
Mark Cohen, The Top Fourteen Things You Need to Know About the Uniform Trust
Code, 2 NAT’L ACAD. ELDER L. ATTY’S J., 259, 261 (2006).
117. Danforth, supra note 116, at 2552.
118. UNIF. TRUST CODE prefatory note, 7C U.L.A. 364 (2006).
119. Id.
120. Id.
121. Id.
122. Id.
123. Cohen, supra note 116, at 261.
124. See id.
125. Danforth, supra note 116, at 2554.

262 TEXAS WESLEYAN LAW REVIEW [Vol. 16
final text of the UTC was completed on October 9, 2000. 126 On April
25, 2001, the official comments were finished, and the UTC was approved
by the American Bar Association House of Delegates in February
2001. 127 The NCCUSL approved the technical amendments in
2001, 2003, and 2004, and further amendments were approved in 2005,
several of which concern Article Five. 128
B. UTC Uses
The UTC consists mainly of default rules that can be applied when
the trust document is silent. 129 It also includes provisions that include
mandatory rules that the settlor cannot override, rules that allow virtual
representation of unborn or unascertained beneficiaries, flexible
rules for trust modification and termination, as well as rules for revocable
trusts. 130 The UTC is mainly a default statute that permits the
terms of the trust to override the code. 131 There are several terms,
however, that the trust cannot override, including the duty of the trustee
to act in good faith, public policy exceptions to the enforcement of
spendthrift provisions, the requirements for creating a trust, and the
authority of the court to modify or terminate a trust on specified
grounds. 132
While the UTC was drafted to help states make trust creation easier,
only twenty jurisdictions had adopted the UTC as of November
2007. 133 Many states have determined that this codification harms
more than it helps and have decided not to adopt the UTC.
Texas has adopted a few portions of the UTC, but has declined to
adopt the entire code. The Real Estate, Probate, and Trust Law sections
of the State Bar of Texas performed a study that concluded that
Texas should not adopt the entire UTC. 134 Although it believed that
the Texas Trust Code was in many respects superior to the UTC, it did
recommend the adoption of parts of the UTC. 135 In 2003 and 2005,
the Texas Legislature incorporated several provisions into the Texas
Trust Code. 136 In May 2005, under House Bill 1190, changes were
made by the addition of mandatory trust terms, the expansion of trustees
duties to beneficiaries, the codification of court authority to modify
and terminate trusts, and the creation of trusts for the benefit of
126. Id.
127. Id.
128. Id.
129. Cohen, supra note 116, at 261.
130. Id.
131. UNIF. TRUST CODE prefatory note, 7C U.L.A. 364 (2006).
132. Id.
133. Drewett, supra note 48, at 116.
134. Kara Blanco, Comment, The Best of Both Worlds: Incorporating Provisions of
the Uniform Trust Code Into Texas Law, 38 TEX. TECH L. REV. 1105, 1107 (2006).
135. Id.
136. Id.

2010] THIRD-PARTY SPECIAL NEEDS TRUST 263
pets. 137 In 2007, however, due to controversy regarding requirements
of notice to trust beneficiaries, the Legislature repealed portions of
the UTC it had so recently enacted. 138
VI. UTC AND THIRD-PARTY SPECIAL NEEDS TRUSTS
A. Death of the Third-Party Special Needs Trust in a UTC World
Many critics of the UTC point to the potential effects the UTC
could have on the creation of third-party special needs trusts as a reason
not to adopt the UTC. Several issues arise from the adoption of
the UTC, including potentially eliminating the distinction between
discretionary and support trusts, the “good faith” requirement of
trustees, and the “spendthrift” trust creation. Each of these issues
could potentially prevent the creation of third-party special needs
trusts.
1. Discretionary and Support Trust Distinction
A third-party special needs trust is permitted under the Texas Trust
Code because the code makes the distinction between a purely discretionary
trust and a support trust. 139 Trusts are broken into these categories
to distinguish the rights of a beneficiary’s creditors. 140 A
discretionary trust allows the trustee the discretion to determine the
distributions made to the beneficiary based on the standards set out in
the trust. 141 Discretionary trusts are historically considered “not available”
for the purpose of determining whether an individual can receive
governmental assistance. 142 Further, a discretionary trust
generally uses permissive language such as “may” instead of the word
“shall.” 143 Along with the permissive language, discretionary trust language
is usually further qualified by granting the trustee unfettered
discretion using words like “sole and absolute discretion,” “absolute
and uncontrolled discretion,” or “unfettered discretion.” 144 Discretionary
trusts allow for the most flexible use of assets to benefit the
disabled beneficiary while maintaining the “not available” classification
for public benefits. 145 A third-party discretionary trust creates
only a “mere expectancy” of a distribution. The beneficiary has no
enforceable property rights in the trust and, therefore, will only re-
137. Id.
138. Drewett, supra note 48, at 116.
139. Id. at 116–17.
140. See DUKEMINIER ET AL, supra note 62, at 544.
141. Drewett, supra note 48, at 117.
142. Id. at 116.
143. Mark Merric & Steven J. Oshins, Effect of the UTC on the Asset Protection of
Spendthrift Trusts, EST. PLAN., Aug. 2004, at 375, 379, available at http://www.oshins.
com/images/Effect_of_the_UTC_on_the_asset_protection_of_spendthrift_trusts.pdf.
144. Id.
145. Drewett, supra note 48, at 117.

264 TEXAS WESLEYAN LAW REVIEW [Vol. 16
ceive distributions when the trustee determines that it is best. Because
of this lack of property interest, the third-party discretionary trust has
historically been considered “not available” to the beneficiary. 146
A support trust is created with trust language that requires the trustee
to distribute trust assets for the support of the beneficiary. 147 The
distributions must go toward the support of the beneficiary, including
housing, food, school tuition, etc., but the trustee cannot provide the
beneficiary with luxuries. 148 The beneficiary can request funds from
the trustee as needed, and as part of the trustee’s duty, he or she will
review the request and investigate before granting or denying it. 149
An example of language creating a support trust is: “The Trustee shall
make distributions of income or principal for the beneficiary’s health,
education, maintenance and support.” 150 The two most important aspects
of the trust language are that the trustee “shall” make distributions
and the given standard or circumstances when distributions
should be made. 151
Two types of support trusts can be created: mandatory support
trusts and discretionary-support trusts. 152 The first type, a mandatory
support trust, gives no discretion to the trustee in distributing the trust
assets. 153 The trust document specifically provides how the beneficiaries
are supposed to receive the property. 154 The level of support
the beneficiary is to receive is usually a level that the beneficiary has
become accustomed to receiving. 155 Second, a trust is considered a
discretionary-support trust if the trust language allows the trustee to
distribute funds to the beneficiary for the beneficiary’s support, but at
the trustee’s discretion. 156 In both types of support trusts, the beneficiary
is considered to have a property right in the trust assets. 157 Because
of this property interest, the beneficiary can bring a judicial
claim against the trustee if he or she believes that distributions are
being wrongfully withheld. 158 Because the beneficiary can force distribution
by the trustee, the trust assets are considered “available” to the
146. Id. at 116.
147. Id. at 116–17.
148. Quizlaw, What is a Support Trust?, http://www.quizlaw.com/trusts_and_
estates/what_is_a_support_trust.php (last visited Sept. 3, 2009) [hereinafter Quizlaw].
149. Id.
150. Merric & Oshins, supra note 143, at 378 (emphasis added).
151. Id.
152. Quizlaw, supra note 148.
153. Quizlaw, What is a Mandatory Trust?, http://www.quizlaw.com/trusts_and_
estates/what_is_a_support_trust.php (last visited Sept. 3, 2009).
154. Id.
155. Id.
156. Drewett, supra note 48, at 117.
157. Id.
158. Id.

2010] THIRD-PARTY SPECIAL NEEDS TRUST 265
beneficiary for purposes of determining assets for governmental
assistance. 159
The potential problem created by the UTC’s adoption is that it
reverses over 125 years of common law that draws a distinction between
a discretionary trust and support trust. 160 This reversal has
been noted as the “beginning of the end” for third-party special needs
trusts. 161 Section 504 of the UTC addresses the ability of a beneficiary’s
creditor to reach the beneficiary’s discretionary trust interest. 162
It eliminates the distinction between a discretionary and support trust
which combines both trusts under the same rule. 163 Section 504(d)
states that “this section does not limit the right of a beneficiary to
maintain a judicial proceeding against a trustee for an abuse of discretion
or failure to comply with the standard of the distribution.” 164
This section along with section 814(a) which requires a trustee to exercise
discretionary powers “in good faith and in accordance with the
terms and purposes of the trust and the interests of the beneficiaries,”
expands the power of beneficiaries to compel distributions. 165 This
power is beyond what is held at common law or in Texas law. Because
the beneficiary has the right to compel distribution, the beneficiary
maintains a property right. This is more than a “mere expectancy” of a
distribution which could potentially qualify the trust as an “available”
asset to the beneficiary. 166 If the trust is classified as “available,” then
the assets will be considered “countable” and used against the individual
seeking governmental assistance.
2. Good Faith Requirement
Another possible issue that could cause problems with the thirdparty
special needs trust is the duty of good faith. In section 804(a),
the UTC imposes a duty of good faith on the trustee. Until 2005,
Texas only required a duty of loyalty. 167 Because there was no duty of
good faith, if a trustee of a discretionary trust chose not to make a
distribution, the beneficiary had no right to judicial relief. 168 There
was no claim for a breach of good faith because one did not exist. In
2005, however, the Texas Trust Code adopted the good faith requirement.
169 With the adoption of this duty, beneficiaries now might be
159. Id.
160. MERRIC LAW FIRM, L.L.C., WHY THE UNIFORM TRUST CODE FAILED IN VA-
RIOUS STATES 10, http://www.internationalcounselor.com/Why%20the%20UTC%20
Failed.pdf (last visited Sept. 17, 2009).
161. Id.
162. UNIF. TRUST CODE § 504 cmt., 7C U.L.A. 530 (2006).
163. Id.
164. Id.
165. Danforth, supra note 116, at 2563–64.
166. Drewett, supra note 48, at 117.
167. Id. at 118.
168. Id.
169. Id. at 116.

266 TEXAS WESLEYAN LAW REVIEW [Vol. 16
able to bring a claim of breach of duty of good faith. 170 This creates
the potential that the beneficiary could demand distribution, changing
the discretionary trust into a support trust, and reclassifying these assets
as “available.” 171
3. Spendthrift Provisions
The final problem arises with the issue of creating a spendthrift
trust. Third-party special needs trusts include a “spendthrift clause” to
(1) prevent the beneficiary from reaching his interest in the trust
early; (2) keep the beneficiary from assigning the trust assets to a
creditor; and (3) prevent the beneficiary’s creditors from satisfying
claims against the beneficiary by accessing trust assets without the
beneficiary’s permission. 172 In a “spendthrift clause,” the beneficiary
is not considered to have a property right in the trust. Because the
beneficiary has no property right, the beneficiary’s creditors cannot
have an interest in the trust either. 173
In section 112.035 of the Texas Trust Code, a spendthrift trust can
be created by referring to the trust as a “spendthrift trust” in the trust
language. 174 The Code does not require that the trust spell out which
parts of the spendthrift definition should be included. 175 It also does
not recognize the invasion of rights of exception creditors. 176
A UTC spendthrift trust can be created through section 502. 177 In
order to create a spendthrift trust under the UTC, a settlor can simply
state that “the interest of a beneficiary is held subject to a ‘spendthrift
trust,’” or words of similar import. 178 If the trust is a valid spendthrift
trust, “a beneficiary may not transfer the interest” and “a creditor or
assignee of the beneficiary may not reach the interest or a distribution
by the trustee before its receipt by the beneficiary.” 179 It must “restrain
both voluntary and involuntary transfers of beneficiary’s interest.”
180 This general rule is subject to statutory exceptions. The
problem arises with section 503, which lists the exception creditors of
a spendthrift trust that are allowed to reach the assets of the trust to
satisfy a claim. 181 There are three categories of exception creditors: “a
beneficiary’s child, spouse, or former spouse who has a judgment or
170. Id. at 118.
171. Id.
172. Id. at 117.
173. Merric & Oshins, supra note 143.
174. Drewett, supra note 48, at 117.
175. Id.
176. Id.
177. Danforth, supra note 116, at 2570.
178. UNIF. TRUST CODE § 502(b), 7C U.L.A. 523 (2006).
179. Id. § 502(c).
180. Drewett, supra note 48, at 117.
181. UNIF. TRUST CODE § 503(b)(2), 7C U.L.A. 524 (2006); Drewett, supra note 48,
at 117.

2010] THIRD-PARTY SPECIAL NEEDS TRUST 267
court order against the beneficiary for support or maintenance, a judgment
creditor who has provided services for the protection of a beneficiary’s
interest in the trust, and a claim of this State or the United
States to the extent a statute of this State or federal law provides.” 182
For special needs trust planning purposes, this could cause problems
because one of the exception creditors that can reach the trust assets
to satisfy claims is “this State or the United States.” 183 This could
create an argument that the state Medicaid and federal SSI programs
could be classified as “exception creditors.” With this classification,
the trust assets of a third-party special needs trust could be reached by
the government. 184 Another problem exists if the complicated requirements
to create a “spendthrift provision” are not followed.
Under section 501 of the UTC, if the trust does not include a “spendthrift
provision” the court may “authorize a creditor or assignee of the
beneficiary to reach the beneficiary’s interest by attachment of present
or future distributions to or for the benefit of the beneficiary or
other means.” 185
B. Third-Party Special Needs Trust Alive and Well in a UTC World
1. Distinction of Support Trusts and Discretionary Trusts
While there have been many critics who are concerned with the ensuing
effects of the UTC, there are still others who believe that this
criticism is unwarranted. 186 Proponents of the UTC argue that in
some ways the UTC eliminates the distinction between discretionary
trusts and support trusts, but in some ways it does not. 187 The argument
is that the distinction is only eliminated for creditor’s rights purposes.
188 The official commentary to section 504 states that by
eliminating the distinction, the rights of the creditor are now the same.
“Other than for a claim by a child, spouse, or former spouse, a beneficiary’s
creditor may not reach the beneficiary’s interest. Eliminating
this distinction affects only the rights of creditors.” 189 The right of the
beneficiary to compel distribution is not affected by this provision. 190
“Whether the trustee has a duty in a given situation to make a distribution
depends on factors such as breadth of the discretion granted
and whether the terms of the trust include a support or other standard.”
191 Proponents believe that the UTC does not change the tradi-
182. § 503(b).
183. Drewett, supra note 48, at 117.
184. Id.
185. UNIF. TRUST CODE § 501, 7C U.L.A. 520 (2006).
186. Alan Newman, Spendthrift and Discretionary Trusts: Alive and Well Under the
Uniform Trust Code, 40 REAL PROP. PROB. & TR. J. 567, 569 (2005–2006).
187. Id. at 595.
188. UNIF. TRUST CODE § 504 cmt., 7C U.L.A. 530 (2006).
189. Id.
190. Id.
191. Id.

268 TEXAS WESLEYAN LAW REVIEW [Vol. 16
tional rules that have governed the trustee’s exercise of discretion to
make distributions to the beneficiary. 192
The distinction between discretionary and support trusts is also
partly rejected because most trusts include language that gives the
trustee both discretion and a support standard. 193 The Third Restatement
describes the formal distinction as “arbitrary and artificial.” 194
Also as one Iowa court explains, “the definitional distinctions between
support and discretionary trusts are limpid. Provisions of particular
trusts muddy these clear demarcations. When the provision is
equivocal or adheres to principles common to both types of trusts,
interpretative inconsistencies abound.” 195 In a similar finding, a Pennsylvania
court states, “We believe such a rigid categorization [of trusts
as support trusts or discretionary trusts] is unwarranted and ignores
the intent of a settlor who includes both support and discretionary
language in his trust instrument, by substituting mechanical rules for
individual facts.” 196
Specifically concerning the effects of the UTC on special needs
trusts, advocates of the UTC explain that the UTC does not adversely
affect the ability of beneficiaries of self-settled special needs trust to
qualify for public benefits. 197 Some believe that eliminating the distinction
of trusts does not affect asset classification as either “available”
or “not available.” 198 Proponents of the UTC argue that the
code does not change existing law on whether a beneficiary of a thirdparty
special needs trust can compel distribution and, therefore, does
not affect the classification. 199 The UTC only addresses the trustee’s
duties and rights as to the beneficiary regarding discretionary distributions.
200 The distributions by the trustee are limited by the traditional
common law requirement of good faith in accordance with the terms
of the purposes of the trust. 201 The UTC does not address distributions
in any other way, 202 nor does it address how to interpret the
terms of a trust or determine whether the intent of the settlor was to
have a discretionary or support trust. 203 Because the UTC does not
increase the ability of beneficiaries to compel distributions from a discretionary
trust, advocates believe that the UTC should not adversely
affect the ability of a third party to create a trust that will allow the
192. Newman, supra note 186, at 596.
193. Id. at 598.
194. Id. at 597.
195. Strojek ex rel. Mills v. Hardin County Bd. of Supervisors, 602 N.W.2d 566, 569
(Iowa Ct. App. 1999).
196. See Lang v. Commonwealth, 528 A.2d 1335, 1344 (Pa. 1987).
197. Newman, supra note 186, at 619.
198. Id. at 620.
199. Id.
200. Id. at 622.
201. Id.
202. Id.
203. Id. at 623.

2010] THIRD-PARTY SPECIAL NEEDS TRUST 269
assets to be classified as “not available” for the purposes of qualifying
for public benefits. 204
2. Spendthrift Trust Provisions
In response to the potential problems created by the exception
creditors in spendthrift trusts, UTC supporters point to the official
comment of section 503 which states that “distributions subject to attachment
[under this provision] include distributions required by express
terms of the trust, such as mandatory payments of income, and
distributions the trustee has otherwise decided to make, such as
through the exercise of discretion.” 205 It further explains that this section
“does not authorize [an exception creditor] to compel a distribution
from the trust.” 206 Section 503 only makes the spendthrift
provisions ineffective for certain categories of claims. The claim and
creditor still have to surmount the language in the trust, such as discretionary
language. 207 Most creditors of discretionary trusts may not
compel the trustee to exercise its discretion to make distributions that
the creditors would be able to reach. 208 Even if the claimant is able to
get past the language of the trust, section 503 provides that “the court
may limit the award to such relief as is appropriate under the circumstances.”
209 Therefore, the court can consider the specific circumstances
surrounding the beneficiary’s needs before it decides to allow
the exception creditor to reach the trust assets. 210 Another response
to this argument is that the “claims of the United States” was included
for transparency purposes. 211 Under standard preemption doctrines, if
federal law is created that allows the federal government to reach
spendthrift trusts, it will not matter whether or not a state has a statute
allowing claims of the United Sates. 212 Therefore, if that section
were deleted from the UTC, it would have no substantive effect. 213
Further, the debt that would arise as a claim by the United States or
“this State” would only occur after the death of the individual receiving
public benefits. 214 The state or federal government would then try
to recover its costs from the beneficiary’s estate. 215 Accordingly the
204. Id. at 623–24.
205. Danforth, supra note 116, at 2561; UNIF. TRUST CODE § 503 cmt., 7C U.L.A.
525 (2006).
206. Danforth, supra note 116, at 2561; § 503 cmt.
207. Danforth, supra note 116, at 2561.
208. Newman, supra note 186, at 584.
209. Danforth, supra note 116, at 2561; § 503.
210. § 503(c).
211. Newman, supra note 186, at 575.
212. Id.
213. Id.
214. Id. at 576.
215. Id. at 625.

270 TEXAS WESLEYAN LAW REVIEW [Vol. 16
state would not be considered a creditor during the life of the beneficiary
and would not be considered an exception creditor. 216
VII. PROPOSAL
Texas should not adopt the portions of the Uniform Trust Code that
could potentially eliminate third-party special needs trust. The ability
to create a mechanism for parents and other loved ones to provide a
special needs child with the opportunity to have as “normal” a life as
possible is too important to risk. With the help of a third-party special
needs trust funded by their family and community members, Josh and
Leigh could hire a teacher to work with Jadyn individually to make
sure she receives the attention she needs to help her develop, they
could pay for a vacation to take Jadyn to Disney World, they could
rework the entry to their home so that Jadyn’s walker could easily
enter the front door, or they could put money away for Jadyn’s college
education. In their current situation however, there is no potential to
save for these needs or opportunities. They must subsist on bare minimum
assets to receive assistance for Jadyn’s medical expenses. While
there is no clear indication that an adoption of the UTC will completely
eliminate this possibility, the slight changes in the language
create possible opportunities for litigation that could eliminate and
reclassify the trust assets. If we continue following the Texas Trust
Code, however, Jadyn will not only have her basic needs met, but will
also have the opportunity to enjoy an improved quality of life.
216. Id.

EMINENT DOMAIN AND PIPELINES
IN TEXAS: IT’S AS EASY AS 1, 2, 3—
COMMON CARRIERS, GAS UTILITIES,
AND GAS CORPORATIONS
By Amanda Buffington Niles
I. INTRODUCTION.......................................... 271 R
II. TEXAS’S OIL & GAS HISTORY .......................... 272 R
III. THE HISTORY OF EMINENT DOMAIN IN TEXAS ......... 274 R
IV. PRIVATE ENTITIES WITH EMINENT DOMAIN POWER .... 280 R
A. Common Carriers ................................... 280 R
B. Gas Utilities and Gas Corporations ................. 284 R
C. The Texas Railroad Commission’s Role ............. 288 R
V. THE EFFECT ON THE RESIDENTS OF THE BARNETT
SHALE .................................................. 289 R
VI. THE NEED FOR REFORM ............................... 291 R
VII. CONCLUSION ............................................ 293 R
I. INTRODUCTION
With the Barnett Shale in our backyard, dealing with oil and gas
companies is a common occurrence for Tarrant County residents, as it
has been for many Texans for years. It is well known that where there
are oil and gas wells, pipelines are needed to transport the products of
those wells. The problem arises when the pipeline is routed under
one’s driveway, front yard, or a child’s playground—which is exactly
what is happening in Fort Worth—the first major urban environment
where pipelines have been introduced on a large scale. But the landowners’
objections have not kept the pipelines out of their neighborhoods.
This is because Texas law grants the power of eminent domain
to specific entities—namely “gas utilities,” “gas corporations,” and
“common carriers”—to condemn property and lay a pipeline. Unless
a corporation falls within these categories, it does not have the power
of eminent domain and cannot take the landowners’ property. However,
the current eminent domain law as it applies to pipelines is very
broad, allowing most entities to fit within one of the categories. And
once the pipeline company is deemed an entity with condemning authority,
there are almost no checks or restrictions on the amount or
location of land to be taken for the pipeline. The only recourse for
landowners once this occurs is the court system—but they stand little
chance of gaining any ground here either, other than to recover more
money than offered by the gas company. As landowners around
North Texas are discovering, once the oil and gas companies are designated
as entities with condemnation authority, they are merely fighting
a losing battle.
271

272 TEXAS WESLEYAN LAW REVIEW [Vol. 16
Part II of this comment will provide a brief history of the oil industry
in Texas as well as the large impact it has had on Texans up to the
present day. Part III will examine the history of eminent domain jurisprudence
in Texas, and Part IV will explore how private companies
have obtained and used the power of eminent domain to lay pipelines.
Part V will demonstrate how the law has affected the residents of Tarrant
and neighboring counties living within the Barnett Shale, and
Part VI will suggest means for reform in these areas of the law.
II. TEXAS’S OIL & GAS HISTORY
California had the gold rush, and Texas had Spindletop. On January
10, 1901, Texas’s economy was forever changed from its rural and
agricultural roots to the oil-producing state that it is today. 1 The excitement
started with the Lucas No. 1 well at Spindletop, which
spewed oil over 100 feet in the air for nine days. 2 Even though this
well kick-started the Texas oil boom, it was not the first indication that
land in Texas was oil-rich—that had been known for hundreds of
years. 3
Oil discovery in Texas dates back as far as July 1543 to an expedition
led by Luis de Moscoso Alvarado. 4 The expedition was forced
ashore along the Texas coast, and it was here that Alvarado reported
oil floating on the surface of the water. 5 After the discovery, the expedition
used the oil to caulk their boats. 6 Three centuries later in
1866, the first oil-producing well in Texas was drilled by Lyne T. Barret
in Nacogdoches County. 7 Other nearby wells soon followed, making
Nacogdoches County the site of Texas’s first commercial oil field
and first pipeline. 8 Several thousand barrels of oil were produced
from these wells, but the price of oil was so low at the time that further
development was not justified, and the drilling eventually came to
a halt. 9
It was not until almost thirty years later, in 1894, that the first economically
significant discovery of oil west of the Mississippi River occurred.
10 Corsicana city crews were drilling and hoping for water but,
instead, found oil. 11 Joseph S. Cullinan, one of the founders of the
1. See Mary G. Ramos, Oil & Texas: A Cultural History, in TEXAS ALMANAC
2000–2001 at 29, available at http://www.texasalmanac.com/history/highlights/oil/.
2. Id.
3. See id.
4. Id.
5. Id.
6. Id.
7. Id.
8. Id.
9. See id.
10. Id.; see also Roger M. Olien, Oil and Gas Industry, THE HANDBOOK OF TEXAS
ONLINE, http://www.tshaonline.org/handbook/online/articles/OO/doogz.html (last visited
Aug. 31, 2009).
11. Ramos, supra note 1, at 29.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 273
Texas Company which later became Texaco, continued drilling in the
area. 12 The number of wells in Corsicana shot up from 5 in 1896 to 57
in 1897 and 287 by 1898. 13 The location became home to the first
well-equipped oil refinery in Texas. 14
Even though the wells in Corsicana were productive, Texas’s nationwide
oil fame began with Spindletop in 1901 in Beaumont. 15 Spindletop
Hill’s Lucas No. 1 well, named after the Louisiana mining
engineer and oil prospector Captain Anthony F. Lucas, produced
more than 75,000 barrels of oil a day. 16 In 1902 the well produced 17.5
million barrels, which was 94% of the State’s production. 17 After
Spindletop, the ready availability of oil encouraged its use as fuel for
transportation and manufacturing. 18 The increased availability of oil
coupled with the beginning of the automobile age made oil a hot commodity,
and as a result Texas’s oil industry began to rapidly develop.
The success of Spindletop prompted additional exploration in the
Gulf Coast region, but these fields typically flourished and declined
quickly. 19 Exxon’s predecessor, Humble Oil and Refining Co., continued
to build in this area and by 1940 it was the largest refiner in the
country with a capacity of 140,000 barrels per day. 20 All of the oil
production in Texas naturally boosted the State’s economy, especially
with the addition of taxation on oil production in 1905. 21 After the
first year of taxing oil production the State collected $101,403.25. 22
The public coffers continued to swell as a result of the oil tax: the
State collected over $1 million in 1919 and almost $6 million in 1929. 23
Texas operators produced almost 70 million barrels of oil in the first
quarter of 1929 as exploration throughout Texas continued. 24
But the beginning of World War II disrupted the demand for oil and
American exports fell by nearly a quarter. 25 By 1942, Texas’s oil output
was less than 60% of its potential. 26 This changed postwar, when
the market for oil and gas expanded, though demand fell again in the
late 1950s and early 1960s. 27 By the late 1970s the oil industry was on
12. Id.
13. Christopher Long, Corsicana, Texas, THE HANDBOOK OF TEXAS ONLINE,
http://www.tshaonline.org/handbook/online/articles/CC/hec5.html (last visited Sept.
21, 2009).
14. Olien, supra note 10.
15. See Ramos, supra note 1, at 29.
16. Id. at 31.
17. Id.
18. Id. at 32.
19. Olien, supra note 10.
20. Id.
21. See id.
22. Id.
23. Id.
24. Id.
25. Id.
26. Id.
27. Id.

274 TEXAS WESLEYAN LAW REVIEW [Vol. 16
the upswing again as a result of an international shortage of oil—and
the Texas oilmen were back in business. 28 Rig counts in Texas jumped
from a yearly average of 770 in 1979 to 1,318 in 1981. 29 But, as it had
done in the past, oil prices leveled off with fuel substitutions, conservation,
and reduced demand. 30 It has been said that the boom in the
late 70s and early 80s might have been Texas’s last. This was disproved
with the discovery of the Barnett Shale at the end of the twentieth
century.
Today, residents of Tarrant County are very aware of the Barnett
Shale. Some residents have awakened to the roar of uninvited bulldozers
on their land, clearing the way for high-pressure natural-gas
pipelines in their backyards. 31 Tarrant County families do not want
the pipelines in their yards or around their homes, but they cannot
stop the gas companies from condemning their land. Landowners in
Tarrant and surrounding counties feel helpless when faced with this
situation because gas companies have eminent domain power with
very few checks and restrictions.
III. THE HISTORY OF EMINENT DOMAIN IN TEXAS
Eminent domain is defined as “[t]he inherent power of a governmental
entity to take privately owned property, especially land, and
convert it to public use, subject to reasonable compensation for the
taking.” 32 These proceedings are also commonly known as condemnation
proceedings, which date back in Texas before the Constitution
of 1876. 33
The Constitution of the Republic of Texas in 1836 stated that “[n]o
person’s property (shall be) taken or applied to public use, unless by
consent of himself without just compensation.” 34 In 1839 the Texas
Congress created a commission to “purchase” or “condemn” a site for
the permanent location of the state’s government “at some point between
the rivers Trinidad (Trinity) and Colorado and above the old
San Antonio Road.” 35 Under the Laws of the Republic, approximately
one and a half leagues were to be surveyed, divided into lots,
and sold to the highest bidder. 36 But before the sale, the agents of the
Republic were to set aside the most eligible lots for a “capital, Arse-
28. See id.
29. Id.
30. Id.
31. See Jay Parsons, Gas Pipelines Have Few Rules, Property Owners Discover,
THE DALLAS MORNING NEWS, Jan. 29, 2008, http://www.dallasnews.com/shared
content/dws/dn/latestnews/stories/013008dnmetgaslines.39b077b.html.
32. BLACK’S LAW DICTIONARY 239 (3d pocket ed. 2006).
33. See Davis v. City of Lubbock, 160 Tex. 38, 46, 326 S.W.2d 699, 704–05 (1959).
34. Id. at 46–47, 326 S.W.2d at 705.
35. Id. at 46, 326 S.W.2d at 704–05.
36. Id. at 46, 326 S.W.2d at 705.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 275
nal, Magazine, and University.” 37 The area that was “set aside” is, of
course, now part of the city of Austin. 38 Just as the Republic of Texas
was not shy about condemnation proceedings, neither was the State of
Texas.
The “takings” clause, as it is well known, was only slightly modified
from its original form in the Constitution of the Republic of Texas to
the first Constitution of the State of Texas in 1845. 39 The State’s first
Constitution stated that “[n]o person’s property [shall be] taken, or
applied to public use, without adequate compensation being made,
unless by the consent of [such person].” 40 The clause went unchanged
in the Constitutions of 1861, 1866, and 1869. 41 The Constitution of
1876, the current version of Texas’s “takings” clause, states that “[n]o
person’s property shall be taken, damaged or destroyed for or applied
to public use without adequate compensation being made, unless by
the consent of such person; and, when taken, except for the use of the
State, such compensation shall be first made, or secured by a deposit
of money . . . .” 42
One of the first major eminent domain issues that Texas faced concerned
the development of railroads. The development of railroads
brought with it improved transportation as well as increased economic
growth, and the State readily recognized the need for greater rights
afforded to the railroad companies. Thus, from the middle of the
nineteenth century and on, Texas was ready and willing to give the
railroad companies the land they needed for their expansion. The
Texas Supreme Court stated in 1863 that:
[w]e suppose it is now an admitted proposition that under the usual
grants of power contained in charters of railway companies, such
companies have the right to condemn or take in the manner provided
by their charters or other laws of the State, such land as may
be necessary for their road-ways; and that such appropriation of private
property is an application of it to public use, as contemplated
by section 14 article 1 of the constitution of this State. 43
The appropriation of such land was already so engrained in the State
that the high Court stated that “[i]t cannot be questioned that a railroad
for general travel, or the transportation of produce for the country
at large, is a ‘public use,’ for the construction of which the private
property may be taken or applied upon adequate compensation for it
being made.” 44 The Court went on to explain that even though the
railroad company is a private corporation that will benefit from the
37. Id. at 46, 326 S.W.2d at 704–05.
38. Id. at 46, 326 S.W.2d at 704–05.
39. Id. at 46, 326 S.W.2d at 705.
40. Id. at 46, 326 S.W.2d at 705.
41. Id. at 46, 326 S.W.2d at 705.
42. TEX. CONST. art. I, § 17.
43. Buffalo Bayou, Brazos & Colo. R.R. v. Ferris, 26 Tex. 588, 592 (1863).
44. Id. at 598.

276 TEXAS WESLEYAN LAW REVIEW [Vol. 16
profits of the road, that reason alone is not a valid objection to the
taking of the private property. 45 It stated that “[o]ne of the chief occasions
for the exercise of this right of eminent domain by the state is,
[to create] the necessary facilities for intercommunication for purposes
of travel and commerce.” 46 It noted that the purpose of eminent
domain is the “public benefit derived from the contemplated
improvement, whether such improvement is to be effected directly by
agents of the government or through the medium of corporate bodies,
or of individual enterprise.” 47
Landowners continued to lose the battle over their land to the railway
companies well into the next century. In 1922, the Kinney &
Uvalde Railway Company chartered itself under a statute that declared
it a common carrier and gave it the right of eminent domain. 48
In attempting to build a railroad, the company had to cross the defendants’
land, but the landowners refused. 49 The landowners claimed
that the purpose of the railroad was only to run across an undeveloped
part of the land, solely for the purpose of transporting products
from an asphalt mine, which was not for public use. 50 The court found
for the railway company and, in explaining its decision, evidenced its
broad view on public use. It stated that:
[d]evelopment of the country has invariably followed the construction
of such roads, industry is encouraged, natural resources are uncovered
and rendered available, fields of employment and activity
enlarged, and the products of this development are transported, by
the very agency which made them available, to other parts of the
country to add to the welfare, comfort, and convenience of the general
public, and thus are created the public benefits and uses which
warrant the exercise of the power of eminent domain. 51
The court emphasized the importance of the natural resources by stating
that the land in dispute would be used to transport “the products
of an asphalt mine, which has become an important, if not essential,
industry in this state.” 52 It noted that the public would likely explore
and develop the area for minerals and the products of the development
would “become[ ] a public use to which individual property
rights must yield when compensated for under the law.” 53
The early takings jurisprudence in Texas makes it clear that the
State recognized how valuable railroads were to the citizens of the
45. Id.
46. Id.
47. Id. at 598–99.
48. West v. Whitehead, 238 S.W. 976, 976 (Tex. Civ. App.—San Antonio 1922, writ
ref’d).
49. Id at 976–77.
50. Id. at 977.
51. Id. at 979.
52. Id.
53. Id.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 277
State as well as to the economy of the State. The idea of private corporations
and companies using the eminent domain power was also
nothing new to the Texas courts in the nineteenth and early twentieth
centuries. The courts justified the takings as long as there was a public
benefit derived from the activity, regardless of what entity effectuated
the taking. But the activities that used the eminent domain power
were not restricted to railroads; the courts recognized other activities
that were crucial to the State as well.
For example, landowners brought suit against an irrigation company
for acquiring a right of way over their land for an irrigation canal. 54
The Texas Supreme Court upheld the Act of 1895 that authorized:
all corporations and associations formed for the purpose of irrigation,
mining, milling, the construction of waterworks for cities and
towns, and stockraising as provided in this act, shall have right of
way over public lands, and that such corporation or association of
persons, as well as cities and towns, may obtain the right of way
over private property and water belonging to riparian owners by
condemnation as provided in the case of railroads. 55
The plaintiffs in the case argued that the Act of 1895 was unconstitutional
because it was not a taking for a “public” purpose. 56 They argued
that the law authorized the creation of “purely private
corporations” for the carrying on of wholly private businesses and did
not secure any such use to the public. 57 The Court disagreed and
found that the corporation was transferring water to the public and,
further, that “the courts cannot inquire into the wisdom or expediency
of the regulations adopted by the Legislature for the protection of the
public.” 58
After the oil boom of 1901, which resulted in thousands of wells
across Texas in the following years, the need for transportation of the
products of the wells increased dramatically. It was readily apparent
that an extensive pipeline system in Texas was in order. In 1915 the
Legislature passed the first of the pipeline statutes and provided for
the incorporation of pipeline companies, making them public-service
corporations charged with a public use and subject to public regulation.
59 In 1917 the Legislature declared pipeline companies to be
common carriers authorized to operate pipelines between different
points in the State. 60 They were authorized to transport crude petroleum
by pipelines from any oil field or place of production to any
54. Borden v. Trespalacios Rice & Irrigation Co., 98 Tex. 494, 504, 86 S.W. 11, 11
(1905), aff’d, 204 U.S. 667 (1907).
55. Id. at 505–06, 86 S.W. at 12.
56. Id. at 509, 86 S.W. at 14.
57. Id. at 509, 86 S.W. at 14.
58. Id. at 509–10, 86 S.W. at 14.
59. Humble Pipe Line Co. v. State, 2 S.W.2d 1018, 1019 (Tex. Civ. App.—Austin
1928, writ ref’d).
60. Id.

278 TEXAS WESLEYAN LAW REVIEW [Vol. 16
distributing, refining, marketing, or reshipping point within Texas. 61
Two years later, in 1919, the Legislature gave them the right of eminent
domain. 62
Throughout Texas’s history, the Legislature has continually enacted
statutes that furthered the development of the State’s natural resources
at the expense of landowners. This is evidenced by the early
statutes granting private companies the right of eminent domain for
such activities as “irrigation, mining, milling, the construction of waterworks
for cities and towns, and stockraising.” 63 With the addition of
pipelines to this list, the oil and gas industry was also a significant
beneficiary of the Legislature’s statutes granting the powers of eminent
domain. With the creation of these statutes and the Court’s desire
to further the state’s natural resource development, Texas
landowners have been losing the battle over their land for the last
century.
Landowners continue to face the same issues today and are still
without many avenues of relief. A few decades after West, in 1958, the
Texas Supreme Court continued its alliance with the oil and gas companies.
The plaintiff in the case, Coastal States Gas Producing Company,
held an oil and gas lease covering approximately 85 acres in the
bed of the Rio Grande River. 64 The Pates, defendants in the condemnation
proceeding, owned land adjacent to the 85 acres. 65 Coastal
sought to condemn 1.84 acres of the defendant’s land to erect power
machinery, storage tanks, and slush pits on, as well as drill a directional
well from, their land into the river bed. 66 The statute granted a
leaseholder (Coastal) the right of eminent domain for the erection of
“power machinery,” construction of storage tanks and slush pits on
the adjoining land to prevent or lessen the dangers of pollution involved
in drilling a well in the river bed. 67 The issue for the Texas
Supreme Court was whether the term “power machinery” granted
Coastal the right to condemn the Pates’ property to drill a directional
well into the river bed. 68 The Court of Civil Appeals held for the defendants,
concluding that the statute did not grant Coastal the right to
drill the directional well. 69
In analyzing the issue, the Texas Supreme Court noted a few principles.
The Court stated that the power of eminent domain must be
conferred by the Legislature and will not be gathered from doubtful
61. Id.
62. Id.
63. Borden, 98 Tex. at 505, 86 S.W. at 12.
64. Coastal States Gas Producing Co. v. Pate, 158 Tex. 171, 174, 309 S.W.2d 828,
830 (1958).
65. Id. at 174, 309 S.W.2d at 830.
66. Id. at 174, 309 S.W.2d at 830.
67. Id. at 174, 309 S.W.2d at 830.
68. Id. at 175, 309 S.W.2d at 831.
69. Id. at 174, 309 S.W.2d at 830.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 279
inferences. 70 It also pointed out that statutes granting the power of
eminent domain are strictly construed in favor of the landowner and
against the corporations and arms of the State. 71 Admitting these
principles, the Court went on to say that strict construction is not the
converse of liberal construction and looked to Webster’s Dictionary to
find the meaning of the words “power” and “machinery.” 72 The
Court concluded that danger would be minimized and the statute
“fully effectuated” with the drilling of the directional well into the
river bed, on the landowner’s property. 73 Once again, the Court acknowledged
that the statutes granting eminent domain should be
strictly construed in favor of the landowner, though the courts continually
fail to do so.
When Texas courts have addressed the definition of “public use,”
the courts admittedly have adopted a “rather liberal view as to what is
or is not a public use.” 74 The Texas Supreme Court stated that the test
for determining public use is to see if there “results to the public some
definite right or use in the business or undertaking to which the property
is devoted.” 75 The courts have also determined that it is “the
character of the right which inures to the public, not the extent to
which the right is exercised,” that is important in evaluating public
use. 76 The fact that the use is limited to citizens of a local neighborhood,
or that a small number of citizens will likely avail themselves of
it, is immaterial so long as it is open to all who choose to avail themselves
of it. 77 The mere fact that the use is advantageous to a particular
group or individual will not, in and of itself, deprive it of its public
character. 78
Texas courts have also made clear that if the Legislature declares
that a use is public, such a declaration “is binding on the court unless
it is manifestly wrong or unreasonable, or the purpose for which the
declaration is enacted is ‘clearly and probably private.’” 79 With the
scales so heavily tilted toward the Legislature’s discretion in choosing
entities with eminent domain power, coupled with the Texas courts’
liberal view of “public use,” it is no wonder the landowners almost
certainly end up the losing party.
The Texas Supreme Court has reiterated the need for the State’s
power of eminent domain throughout the last century. It has stated
70. Id. at 175, 309 S.W.2d at 831.
71. Id. at 175, 309 S.W.2d at 831.
72. Id. at 176, 309 S.W.2d at 831–32.
73. Id. at 177, 309 S.W.2d at 832.
74. Id. at 178, 309 S.W.2d at 833.
75. Id. at 178–79, 309 S.W.2d at 833.
76. Tenngasco Gas Gathering Co. v. Fischer, 653 S.W.2d 469, 475 (Tex. App.—
Corpus Christi 1983, writ ref’d n.r.e.).
77. Id.
78. Id.
79. Id.

280 TEXAS WESLEYAN LAW REVIEW [Vol. 16
that the right “grows out of necessity,” and without it, “society and
governments could not exist.” 80 The Court further stated that “the
Legislature has the power to exercise the right of eminent domain
confided to it by the people and forever reserved by it by implication.”
81 The Court also noted that “[w]hether the power of eminent
domain shall be put in motion for any particular purpose, and whether
the exigencies of the occasion and the public welfare require or justify
its exercise, are questions which rest entirely with the Legislature.” 82
These statements, dating back to the early 1900s, indicate the great
authority that the Legislature has in dictating which entities have the
power of eminent domain.
IV. PRIVATE ENTITIES WITH EMINENT DOMAIN POWER
The broad authority given to private corporations has been the way
of the State since the early twentieth century when the Legislature
realized the need for an extensive pipeline system to handle the oil
output. The Texas Constitution gives the right of eminent domain to
the State and the Legislature exercises this right by enacting statutes
granting private corporations eminent domain power. Private oil and
gas companies have had great influence on the Legislature over the
years and, as a result, have been able to condemn land for their pipelines
over the last century with almost no resistance at all.
There are three statutory avenues that private oil and gas companies
can employ to acquire the right of eminent domain. Unfortunately,
the process is not very complicated for the oil and gas
companies to obtain the right of eminent domain through any of these
vehicles. And, once it has been declared one of these entities, the rest
of the game is relatively simple—the company knocks on the landowner’s
door and tells him that a pipeline will be laid on his property.
At that point, the landowner has relatively few choices. The landowner
can attempt to challenge the company’s status as a “common
carrier,” “gas utility,” or “gas corporation” using the court system, but
the likelihood of the courts overturning the company’s designation is
very slim. And, as mentioned earlier, the courts have almost no say if
they disagree with the Legislature’s designation as to whom has the
power of eminent domain. In the end, once the Legislature designates
the oil and gas company as one of the entities, it is a losing battle for
the landowner.
A. Common Carriers
The Texas Natural Resources Code contains one of the statutory
designations that authorizes entities termed “common carriers” to ex-
80. Imperial Irrigation Co. v. Jayne, 104 Tex. 395, 417, 138 S.W. 575, 587 (1911).
81. Id. at 416, 138 S.W. at 587.
82. Id. at 417, 138 S.W. at 587.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 281
ercise the right of eminent domain. 83 The statute states that “[i]n the
exercise of the power of eminent domain . . . a common carrier may
enter on and condemn the land, rights-of-way, easements, and property
of any person or corporation necessary for the construction,
maintenance, or operation of the common carrier pipeline.” 84 Knowing
that common carriers have the very invasive power of eminent
domain, the next task is to figure out what exactly a common carrier
is. The Texas Natural Resources Code gives seven possibilities for the
common carrier designation. 85 These include: (1) owning, operating,
or managing a pipeline for the transportation of crude petroleum to or
for the public for hire, or engaging in the business of transporting
crude petroleum by pipeline; (2) owning, operating, or managing a
pipeline for the transportation of crude petroleum to or for the public
for hire when the pipeline is constructed on, over, or under a public
road or highway; (3) owning, operating, or managing a pipeline for the
transportation of crude petroleum to or for the public for hire, which
is or may be constructed, operated, or maintained across a right-ofway
of a railroad, corporation, or other common carrier; (4) under
agreement owning, operating, managing, or participating in ownership,
operation, or management of a pipeline for the transportation of
crude petroleum from an oil field or place of production to any distributing,
refining, or marketing center or reshipping point; (5) owning,
operating, or managing pipelines for the transportation of coal in
any form; (6) owning, operating, or managing pipelines for the transportation
of carbon dioxide or hydrogen in whatever form; or (7)
owning, operating, or managing a pipeline for the transportation of
feedstock for carbon gasification. 86
Texas’s jurisprudence determining common-carrier status is not particularly
helpful in deciphering the definitions set out in the Natural
Resources Code and, although rare in the last few decades, there are
older cases where courts have denied one common-carrier status. 87 In
Thedford v. County of Jackson, Mr. Thedford attempted to negotiate
and sell his gas to Texas Eastern Transmission Corporation. 88 To effectuate
the sale, Thedford requested permission from the county to
lay a pipeline connecting his gas well to the Texas Eastern pipeline. 89
The County refused the request and the suit followed. 90 The statute in
effect at the time stated that “[a]ny person . . . engaged in the business
of transporting or distributing gas for public consumption shall have
83. TEX. NAT. RES. CODE ANN. § 111.019(a) (Vernon 2001).
84. Id. § 111.019(b).
85. See TEX. NAT. RES. CODE ANN. § 111.002 (Vernon 2001 & Supp. 2008).
86. Id.
87. See Thedford v. County of Jackson, 502 S.W.2d 899, 901 (Tex. Civ. App.—
Corpus Christi 1973, writ ref’d n.r.e.).
88. Id. at 900.
89. Id.
90. Id.

282 TEXAS WESLEYAN LAW REVIEW [Vol. 16
the power to lay and maintain pipes . . . .” 91 But when the court reviewed
the evidence, it was clear that “there would be no retail customers
or consumers between the well and the Texas Eastern line.” 92
The court concluded that Thedford was “in the business of producing
gas for sale to Texas Eastern and that his line would only be a private
line to carry his gas from his private well to Texas Eastern.” 93
Thedford also argued that he was a common carrier pipeline within
the statutory definition and thus granted the right of eminent domain.
94 The court stated that gas pipeline companies that transport
gas “from their own wells to distant markets and [are] not engaged in
the business of transporting gas for hire or purchasing gas from other
producers are not common carriers . . . .” 95 Therefore, the court concluded
that because Thedford did not transport gas for hire or
purchase gas from others, he was not a common carrier and did not
have the right of eminent domain. 96
The problem that Mr. Thedford ran into was that he was not
chartered or incorporated as one of the entities. He waited until he
got to court to claim that he was a common carrier, which was too
late. These situations rarely happen in modern day landowner vs.
pipeline disputes because all of the oil and gas companies have gone
through the simple process of being designated a common carrier.
The courts do not go through the same line of questioning that they
did in Thedford because they do not question the Texas Railroad
Commission’s (TRC) authority in granting common carrier status.
And, once the court verifies that the company is a common carrier,
the landowner quickly becomes the losing party left in the dark.
In Thedford, the court specifically stated that “[g]as pipeline companies
transporting gas produced from their own wells to distant markets
and not engaged in the business of transporting gas for hire or of
purchasing gas from other producers are not common carriers.” 97 The
court obviously found that simply transporting gas from a private well
to an oil and gas company, if one is not in the business of transporting
gas for hire or purchasing gas from other producers, is not enough to
obtain common carrier status. But today, courts generally do not get
the opportunity to make this determination—common carrier status is
acquired long before the pipeline company steps foot in the courtroom.
The pipeline companies are able to side-step the courthouse’s
determination of a common carrier by “filing with the [Texas Rail-
91. Id. (quoting Act of June 21, 1951, 52nd Leg., R.S. ch. 470, 1951 Tex. Gen.
Laws 829, 830, repealed by Act of May 21, 1997, 75th Leg., ch. 166, § 9, 1997 Tex. Gen.
Laws 1018).
92. Id. at 901.
93. Id.
94. Id.
95. Id.
96. Id.
97. Id.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 283
road] commission a written acceptance of the provisions of this chapter
expressly agreeing that, in consideration of the rights acquired, it
becomes a common carrier subject to the duties and obligations conferred
or imposed by this chapter.” 98 Therefore, once the entity fills
out the paperwork and the TRC declares the entity a common carrier,
courts merely do a cursory check to establish that it is designated a
common carrier. 99
In Vardeman v. Mustang Pipeline Company, Mustang Pipeline
Company sought to run a pipeline through seven Texas counties, including
across the defendant’s land. 100 The two parties could not
reach an agreement and Mustang initiated the condemnation proceeding.
101 Vardeman claimed that Mustang was not a common carrier
and thus did not have the right of eminent domain to condemn his
land. 102 The court found that Mustang was incorporated as a common
carrier in Texas as defined in the Texas Natural Resources Code. 103
The court noted that the Texas Legislature delegated the authority to
regulate common carriers to the TRC. 104 The court further stated that
in determining whether Mustang is in fact a common carrier as defined
by the code, it was instructed by the Texas Supreme Court to
“give great weight to the TRC’s determination of that issue.” 105
In attempting to define common carrier status and explain that the
plaintiff met the two requirements, the court stated that “[f]irst, Mustang
has subjected itself to the jurisdiction of the Commission by declaring
on its T-4 application . . . that it is a common carrier. Second,
Mustang has held itself out to the public for hire as evidenced by its
Texas Local Tariff No. M-3 on file with the Commission.” 106 Because
these two requirements were satisfied, the court determined that Mustang
was a common carrier. 107 The court actually stated that the company
met the first requirement of a common carrier by declaring on a
form that it was a common carrier. Instead of going through the elements
of a common carrier as stated in the Texas Natural Resources
Code, the court reverted to circular reasoning and essentially used the
term it was attempting to define in the definition. This seems to be
the court’s way of stepping aside and not questioning the determination
of the Legislature and the TRC as to whom they have designated
as common carriers.
98. TEX. NAT. RES. CODE ANN. § 111.020(d) (Vernon 2005); see also 56 TEX. JUR.
3d Oil and Gas § 486 (2004).
99. See Vardeman v. Mustang Pipeline Co., 51 S.W.3d 308, 312–13 (Tex. App.—
Tyler 2001, pet. denied).
100. Id. at 310.
101. Id.
102. Id.
103. Id. at 313.
104. Id. at 312; TEX. NAT. RES. CODE ANN. § 81.051 (Vernon 2001).
105. Vardeman, 51 S.W.3d at 312.
106. Id. at 313 (quoting a letter from the Texas Railroad Commission).
107. Id.

284 TEXAS WESLEYAN LAW REVIEW [Vol. 16
Vardeman also claimed that Mustang’s purpose for constructing the
pipeline was not a public use as required by the Texas Constitution for
a taking. 108 The court addressed this issue by stating that the public
use requirement is satisfied when a company uses its pipeline in a
manner determined by the legislature to be a public use, and the legislature
has determined that “moving a petroleum product . . . from the
producing areas to areas where it can be used is a public use.” 109 It
additionally noted that the fact that the requirements of a common
carrier designation were met also established that the use of the pipeline
was for a public purpose. 110
In sum, once the pipeline company subjects itself to the TRC as a
common carrier, the pipeline company has essentially unreviewable
authority to condemn land. As seen in Vardeman, if the landowner
loses on the claim challenging the common carrier status of the company,
then he will inevitably lose on the claim that the taking was not
for a public purpose. 111 This is because once the legislature established
that common carriers had eminent domain power, this determined
that the common carriers’ purpose was a public purpose
consistent with the Constitution. 112 And just as in Vardeman, the public
use claim frequently receives little attention from the court after
the company establishes itself as a common carrier. 113
The legislature has determined that common carriers have eminent
domain power. 114 They have further delegated to the TRC the determination
of which companies are common carriers. 115 But the TRC
has such a low barrier to becoming a common carrier—the mere written
acceptance of the common carrier provisions 116 —it is no surprise
that few landowners want to fight the uphill battle. When one pairs
that with the courts’ great deference given to the TRC’s determination
of who is a common carrier, 117 landowners stop bringing the
claims inside the courtroom.
B. Gas Utilities and Gas Corporations
The other avenue that private oil and gas companies can take to
obtain eminent domain power is the designation of a gas utility or a
gas corporation. 118 The Legislature has defined a gas utility to include
108. Id. at 313–14.
109. Id. at 314.
110. Id.
111. See id.
112. See id.
113. See id.
114. TEX. NAT. RES. CODE ANN. § 111.019(a) (Vernon 2001).
115. See TEX. NAT. RES. CODE ANN. § 111.020(d) (Vernon 2001).
116. See id.
117. Vardeman, 51 S.W.3d at 312.
118. See TEX. UTIL. CODE ANN. § 121.001 (Vernon 2007); see also TEX. UTIL.
CODE ANN. § 181.004 (Vernon 2007).

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 285
a few different entities, but the provision pertaining to private corporations
and pipelines states that a gas utility is an “individual, company,
limited liability company, or private corporation” that:
owns, manages, operates, leases, or controls in this state property or
equipment or a pipeline, plant, facility, franchise, license, or permit
for a business that . . . owns, operates, or manages a pipeline: (A)
that is for transporting or carrying natural gas, whether for public
hire or not; and (B) for which the right-of-way has been or is hereafter
acquired by exercising the right of eminent domain. 119
Though the definition of a gas utility is relatively clear, that of a gas
corporation is not. Courts have continually noted that while there are
clearly “statutes [that] grant the power of eminent domain to gas corporations,
they offer no definition of the term ‘gas corporations.’” 120
In the Texas Utilities Code, § 181.001 offers the definition of a “corporation”
as well as an “electric corporation” but no definition of a gas
corporation. 121 Gas corporations are given the power of eminent domain
in § 181.004, which states that “[a] gas or electric corporation has
the right and power to enter on, condemn, and appropriate the land,
right-of-way, easement, or other property of any person or corporation.”
122 Texas courts have therefore looked to the definition of a gas
utility in order to decipher what a gas corporation is. 123 After analyzing
the statutes together, courts have determined that a gas corporation
is “a corporation operating a gas pipeline[, and it] has the power
of eminent domain if it devotes its private property and resources to
public service and allows itself to be publicly regulated.” 124
In Loesch v. Oasis Pipeline Company, Oasis Pipe Line Company
sought to acquire an easement across Loesch’s property for a 16-inch
pipeline to transport natural gas. 125 Loesch claimed that Oasis was
not a gas utility or a gas corporation with the power of eminent domain
and, therefore, could not acquire an easement across her land. 126
The court disagreed and concluded that, according to the statute, Oasis
was a “gas utility” because it sought to acquire by eminent domain
an easement across Loesch’s property for the purpose of transporting
natural gas through its own pipeline. 127 The court defended its reasoning
stating that “[o]ur reasoning is not circular; rather we simply
119. § 121.001(a).
120. See Anderson v. Teco Pipeline Co., 985 S.W.2d 559, 564 (Tex. App.—San
Antonio 1998, pet denied).
121. TEX. UTIL. CODE ANN. § 181.001 (Vernon 2007).
122. Id. § 181.004.
123. Anderson, 985 S.W.2d at 564.
124. Id.
125. Loesch v. Oasis Pipe Line Co., 665 S.W.2d 595, 596 (Tex. App.—Austin 1984,
writ ref’d n.r.e.).
126. Id.
127. Id. at 598.

286 TEXAS WESLEYAN LAW REVIEW [Vol. 16
give effect to the foregoing statute.” 128 Similar to the circular requisites
of a common carrier, a corporation is a gas utility if “acting
within its corporate powers, [it] acquires land for a pipeline to be
owned by it for the transport of natural gas, through an exercise of the
power of eminent domain.” 129 Therefore, in order to be designated as
a gas utility, it must acquire land through eminent domain. 130 It
hardly seems correct that acquiring land through eminent domain
should be one of the two requirements for a private corporation to
have gas utility designation. The court itself was able to see this but
defended its actions as simply giving effect to the statute. 131 Though
the current definition of a gas utility is worded slightly differently, it
still retains “exercising the right of eminent domain” as one of the
requirements. 132
Loesch also argued that the purpose for the pipeline was not a public
one and, therefore, was in violation of the Constitution. 133 The
court reasoned that by using the power of eminent domain given to it
under the statute, Oasis submitted to the State’s regulations and became
charged with numerous duties to the public. 134 Therefore, its
use of the pipeline was “by legislative declaration” a public use within
the meaning of the Constitution. 135 But the court’s reasoning here
seems to work backward because the pipeline company must use the
power of eminent domain first as a requirement to get “gas utility”
status. 136 The court recognized this and stated that “through an exercise
of the power of eminent domain . . . it thereby submits to the
regulatory provisions . . . so that its ownership of the pipeline, under
such regulations, is a ‘public use’ by legislative declaration, irrespective
of whether the pipeline is available for public use.” 137 Prior to
exercising any eminent domain power, the entity does not have gas
utility status; thus, it does not fit within the carved-out exception. But
after exercising the power of eminent domain, the pipeline company is
subjected to regulations that make the prior condemnation a public
use and not a violation of the Constitution. It seems that prior to
exercising the power of eminent domain, the company is not a gas
utility and, therefore, would not have the authority to effectuate the
taking. It would be more logical to require the company to qualify as
a gas utility first—because the taking is for a “public use”—and then,
128. Id.
129. Id.
130. See id.
131. See id.
132. TEX. UTIL. CODE ANN. § 121.001(a)(2)(B) (Vernon 2007).
133. See Loesch, 665 S.W.2d at 596.
134. Id. at 599.
135. Id.
136. See id. at 598.
137. Id.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 287
subsequently, for the Legislature to allow it to exercise the power of
eminent domain.
A more recent case analyzing the power of gas utilities and gas corporations
suggests that the courts continue to look at the gas utility
statutes to define a gas corporation. 138 In Anderson v. Teco Pipeline
Company, Teco Pipeline Company wanted to build a natural gas pipeline
to transport gas to Katy, Texas, from West Texas and New Mexico.
139 The proposed pipeline route would run across the Andersons’
land. 140 When Teco and the Andersons failed to reach an agreement,
Teco filed a condemnation proceeding. 141 The Andersons asserted
that Teco did not have the power of eminent domain. 142 Teco claimed
it did because it was a gas corporation for which the Legislature has
granted the right of eminent domain. 143 To determine whether Teco
actually was a gas corporation, the San Antonio Court of Appeals
once again looked to the definition of a “gas utility” because there is
no definition of a gas corporation. 144 The court applied the broad definition
of a “gas utility” which requires: that the corporation (1) own,
operate, or manage a pipeline to transport natural gas, whether for
public hire or not; and (2) that the right-of-way for the pipeline is or
will be acquired by the exercise of the right of eminent domain. 145
The court concluded that Teco met the requirements of a gas utility
and, thus, had the power of eminent domain to condemn the Andersons’
land. 146
As in previous cases, once the landowners lose on the claim that
designates the gas pipeline company as an entity with eminent domain
power, they claim that the taking was not for a public purpose. 147
When analyzing these claims, the courts readily recognize that the taking
must be for a public purpose as stated in the Constitution. 148 They
also recognize that the question of whether a use is public or private is
normally one for the court to decide. 149 But the courts “must give
great weight to the legislature’s declaration that a use is public and its
delegation of the power of eminent domain.” 150 The court in Anderson
further stated that “if a statute delegating the power of eminent
138. See Anderson v. Teco Pipeline Co., 985 S.W.2d 559, 564 (Tex. App.—San
Antonio 1998, pet denied).
139. Id. at 561.
140. Id.
141. Id.
142. Id. at 564.
143. Id.
144. Id.
145. Id.; TEX. UTIL. CODE ANN. § 121.001(a)(2) (Vernon 2005).
146. Anderson, 985 S.W.2d at 565.
147. See Vardeman v. Mustang Pipeline Co., 51 S.W.3d 308, 313–14 (Tex. App.—
Tyler 2001, pet. denied).
148. See Anderson, 985 S.W.2d at 565.
149. Id.
150. Id.

288 TEXAS WESLEYAN LAW REVIEW [Vol. 16
domain does not require proof of necessity, the condemnor need only
show that its board of directors determined that the taking was necessary.”
151 The board of directors’ determination of necessity is conclusive
absent fraud, bad faith, abuse of discretion, or arbitrary or
capricious action. 152 The court concluded that the gas corporation
statutes did not require proof of necessity; therefore, “a court should
approve the taking unless the landowner demonstrates fraud, bad
faith, abuse of discretion, or arbitrary or capricious action.” 153 The
court held that Teco was a gas corporation or a gas utility as defined in
the statute and had eminent domain power whose use was for a public
purpose as determined by the legislature. 154
C. The Texas Railroad Commission’s Role
Once oil and gas companies are designated as a gas utility, gas corporation,
or common carrier, they become subject to the Texas Railroad
Commission (TRC). The Texas Natural Resources Code
§ 81.051 states that the TRC has jurisdiction over all common carrier
pipelines as well as anyone owning and operating a pipeline in
Texas. 155
The TRC requires anyone who wants to lay a pipeline in Texas to
file a “T-4” permit to operate the pipeline. 156 The T-4 is a one-page
form that asks questions such as who the owner and operator of the
pipeline is, what kind of fluid will be transported, the classification of
the pipeline (such as common carrier, gas utility, or private line), and
the purpose of the pipeline. 157 But after this, the TRC does not go
much further. The TRC merely acts as a “safety inspector and [a]
records repository.” 158 A spokeswoman for the TRC stated that “the
commission has never denied a [T-4] permit” and that the agency
grants them for “administrative purposes.” 159 The TRC ensures that
the pipelines follow precautionary and safety regulations as well as file
the T-4 permit. But it does not regulate the location or the amount of
land condemned for the easement, nor does it approve the route cho-
151. Id.
152. Id.
153. Id. at 565–66.
154. Id. at 566.
155. TEX. NAT. RES. CODE ANN. § 81.051 (Vernon 2001).
156. Railroad Commission of Texas, Pipeline Eminent Domain and Condemnation
Frequently Asked Questions, http://www.rrc.state.tx.us/about/faqs/eminentdomain.
php (last visited Oct. 1, 2009).
157. RAILROAD COMMISSION OF TEXAS, APPLICATION OF PERMIT TO OPERATE A
PIPELINE IN TEXAS, http://www.rrc.state.tx.us/forms/forms/gs/T-4_8_06_b.pdf (last visited
Oct. 1, 2009).
158. Parsons, supra note 31.
159. Mike Lee, Pipeline Builders May Face Quandary, FORT WORTH STAR-TELE-
GRAM, June 22, 2008, at 1B, available at http://startelegram.typepad.com/files/
pipeline-builders-may-face-quandary.htm.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 289
sen by the pipeline—this is left solely up to the pipeline company. 160
One Texas court noted the “public policy” regarding restrictions on
corporations to condemn land. It stated that “public policy in Texas
. . . places no express restrictions upon the power of the corporation
. . . to condemn land for the prosecution of the business it has been
chartered to carry out.” 161 It further noted that the “legislature has
therein delegated to such a corporation the right to fix the location—
as well as the quantity—of the property it in good faith determines to
be needed for the construction, maintenance, and servicing of its
lines.” 162
When one combines the facts that: (1) the legislature determines
which entities (such as common carriers, gas utilities, and gas corporations)
are delegated the power of eminent domain, which is essentially
unreviewable by the courts; 163 (2) the definitions of the entities given
eminent domain power are broad, encompassing most oil and gas
companies; 164 (3) the TRC decides which pipeline companies have
common carrier status with a T-4 permit, which it has never denied
anyone; 165 and (4) the courts are to give “great weight” to the TRC’s
determination of the designation 166 —landowners are simply fighting a
losing battle in court. Those factors paired with the fact that the statutes
granting eminent domain power to the entities do not require
proof of necessity, leaving the companies’ own boards of directors to
approve the taking—which the court must approve unless the landowner
demonstrates fraud, bad faith, abuse of discretion, or arbitrary
or capricious action by the company 167 —landowners might as well
give up the fight when they get the first knock on the door from the oil
and gas company.
V. THE EFFECT ON THE RESIDENTS OF THE BARNETT SHALE
Texas has more than 43,000 miles of intrastate pipelines, the most of
any state in the country. 168 But the pipeline network around Tarrant
and the surrounding counties in the Barnett Shale is becoming much
more extensive. The only problem is many landowners are seeing this
160. See RAILROAD COMMISSION OF TEXAS, supra note 157.
161. Arcola Sugar Mills Co. v. Houston Lighting & Power Co., 153 S.W.2d 628, 633
(Tex. Civ. App.—Galveston 1941, writ ref’d w.o.m.).
162. Id.
163. See Imperial Irrigation Co. v. Jayne, 104 Tex. 395, 417, 138 S.W. 575, 587
(1911); see also Tenngasco Gas Gathering Co. v. Fischer, 653 S.W.2d 469, 475 (Tex.
App.—Corpus Christi 1983, writ ref’d n.r.e.).
164. See TEX. NAT. RES. CODE ANN. § 111.002 (Vernon 2001 & Supp. 2008); see
also TEX. UTIL. CODE ANN. § 121.001(a)(2) (Vernon 2007).
165. Lee, supra note 160.
166. See Vardeman v. Mustang Pipeline Co., 51 S.W.3d 308, 312 (Tex. App.—Tyler
2001, pet. denied).
167. See Anderson v. Teco Pipeline Co., 985 S.W.2d 559, 565 (Tex. App.—San
Antonio 1998, pet. denied).
168. Parsons, supra note 31.

290 TEXAS WESLEYAN LAW REVIEW [Vol. 16
pipeline network go right through their property and are unhappy
about it.
A family in Grayson County watched out their window as bulldozers
cleared hundreds of trees on their property to make way for a 36inch
wide, high pressure, natural-gas line that will pass 290 feet from
their house. 169 They are not the only family that is upset about it—at
least twenty-nine other landowners are joining them seeking legal recourse
about the 140-mile pipeline. 170 Families living in downtown
Fort Worth on Carter Avenue are also affected, along with thousands
of others. 171 On Carter Avenue, Chesapeake Energy’s pipeline division,
Texas Midstream Gas Services, is trying to get an easement for a
16-inch gas line. 172 The company needs easements from 44 homes and
vacant lots. 173 Residents are concerned about the safety of the highpressure
line, as well as the effect on trees and other structures above
the line. Landowners are quickly learning that it does not matter if
you live in the city or in the country, wells for the Barnett Shale are
popping up everywhere and pipelines are necessary to transport the
gas.
Landowners in Tarrant County have likely heard the terms “common
carrier” and “gas utility” more than they would have ever liked
to. After the initial knock on the door from a pipeline company, the
representative usually has a letter from the TRC stating that the company
has been designated as a common carrier or gas utility and,
therefore, has the right of eminent domain. 174 Two of the major pipeline
companies in the Barnett Shale region are merely pipeline divisions
of major oil and gas companies: Chesapeake Energy’s pipeline
division is Texas Midstream Gas Services, and XTO Energy’s pipeline
division is Barnett Gathering. 175 Tarrant County landowners are realizing
that the oil and gas companies, through their pipeline divisions,
have eminent domain power. One Fort Worth resident expressed his
frustration, stating that “[i]f it were Texas Electric or Atmos, it would
be different . . . those companies provide service to everyone . . . but
the Chesapeake pipeline would benefit one company.” 176 Even
though the pipelines typically serve only one company, once the company
is designated as a common carrier or a gas utility and obtains a
T-4 permit for its pipeline, which the commission has never denied, it
can take the land it needs to lay the pipeline—over the objection of
169. Id.
170. Id.
171. See Mike Lee, East-side Neighbors Oppose Natural Gas Pipeline, FORT
WORTH STAR-TELEGRAM, June 6, 2008 at B5, available at http://startelegram.typepad.
com/barnett_shale/files/eastside_neighbors_oppose_natural_gas_pipeline.htm.
172. Id.
173. Id.
174. See Lee, supra note 160.
175. See id.
176. Lee, supra note 172.

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 291
the landowner. 177 A spokeswoman for the TRC stated that “[a] pipeline
is a common carrier or gas utility by virtue of their business organization,
business activities, and the [sic] way they hold themselves
out as conducting their business under Texas statutes.” 178 TRC officials
say that the TRC is not responsible for deciding who gets the
power to condemn land, 179 but this is not exactly the case. Even
though the legislature decides which kinds of entities have the power
of eminent domain, 180 such as common carriers and gas utilities, the
TRC determines which companies actually are common carriers. 181
Landowners know they are facing an uphill, losing battle against the
pipeline companies. One Fort Worth resident stated, “This is a battle
I’ll lose in the end . . . but I thought at least I could educate myself and
make other residents aware this is happening, and it’s coming to
them.” 182 The residents have looked to their city governments for
help, though there is not much hope from them either. 183 Some cities
above the Barnett Shale have required the pipeline companies to get a
city permit prior to laying the pipeline. 184 This is controversial because
the cities cannot keep the pipeline companies from condemning
land, which is the reason not all cities have adopted the ordinances. 185
An advocate for landowner rights stated it correctly when he said that
there “has to be a legislative fix.” 186
VI. THE NEED FOR REFORM
With the scales so heavily tilted toward the private oil and gas companies,
landowners have almost no options. Problems for landowners
stem from the broad statutes granting almost any oil and gas company
the power of eminent domain. Thus, a starting point for reform is the
Legislature, which should enact stricter requirements for designation
as a common carrier, gas utility, or gas corporation. The TRC could
also enact stricter regulations in order to oversee the amount of land
taken or the best, most efficient route for the pipeline to take. The
Legislature could also require proof of necessity in the statutes granting
eminent domain which would require someone other than the
pipeline companies’ own board of directors to determine whether the
177. Lee, supra note 160.
178. Id.
179. Id.
180. See Imperial Irrigation Co. v. Jayne, 104 Tex. 395, 417, 138 S.W. 575, 587
(1911).
181. See TEX. NAT. RES. CODE ANN. § 111.020(d) (Vernon 2001).
182. John-Laurent Tronche, Pipelines Latest Dispute Between Residents, Industry,
FORT WORTH BUS. PRESS, Aug. 18–24, 2008, at 16, available at http://www.fwbusiness
press.com/display.php?id=8226.
183. See id.
184. Lee, supra note 160.
185. See id.
186. Id.

292 TEXAS WESLEYAN LAW REVIEW [Vol. 16
taking was for a public purpose and a necessity. Finally, the standard
for the courts to overturn the companies’ designation as either a common
carrier, gas utility, or gas corporation should not be so high as to
be almost insurmountable and essentially unreviewable by the courts.
Because landowners’ rights have been chiseled down to almost
none when it comes to takings law in Texas for pipelines, and many of
them realize they have essentially no options, they have turned to the
media to get their stories heard—and they were. On January 5, 2009,
Representative Rob Orr authored House Bill 4 to try and regulate the
takings that have occurred, and continue to occur, in Texas. 187 House
Bill 4 applies to any government agency or private company that condemns
land, and it requires them to provide the landowner with a
“good faith” offer before filing a condemnation suit. 188 The condemning
entity would be required to provide the prices of nearby properties
and take them into consideration when making the “good faith” offer.
189 And if the court determines that the entity negotiated in bad
faith, the landowner could recover court costs and attorneys’ fees. 190
In response to the bill, the Texas Pipeline Association began circulating
a bill of its own that would give the TRC control over most of the
pipeline issues. 191 However, House Bill 4 did not pass in the 81st regular
legislative session. 192
In the meantime, the city of Fort Worth has been hard at work attempting
to give its residents more rights when battling with the pipeline
companies. The City passed Ordinance No. 18449-02-2009 that
regulates pipelines much more heavily and gives the landowners some
much needed relief. 193 The ordinance requires that the pipeline company
submit a proposed pipeline route to the City, as well as the
names and addresses of all the affected property owners when pipeline
records are submitted to the TRC. 194 For city-regulated pipelines,
the ordinance requires that a pipeline permit be submitted before the
pipeline operator makes any offers or negotiations to the landowners.
195 The ordinance also mandates that the pipelines comply with
noise regulations and numerous safety provisions. 196
Although the ordinance does not do precisely everything the Barnett
Shale landowners might like, it is a step in the right direction—
187. See Tex. H.B. 4, 81st Leg., R.S. (2009).
188. Id.
189. Id.
190. Id.
191. See Bill Proposal by Texas Pipeline Association, http://startelegram.typepad.
com/files/tpa-proposal-1.pdf (last visited Sept. 14, 2008).
192. H.J. of Tex., 81st Leg., 1st C.S. 8 (2009).
193. FORT WORTH, TEX., REV. ORDINANCES Ch. 15, Art. II (2009), available at
http://www.municode.com/resources/gateway.asp?pid=10096&sid=43.
194. Id. § 15-46(A)(6).
195. Id. § 15-46(B)(4).
196. See id. § 15-46 (A)(2), (8), (9), (B)(6).

2010] EMINENT DOMAIN AND PIPELINES IN TEXAS 293
giving them a little more bargaining power than what they currently
have—and at this point, the residents living above the Barnett Shale
will take anything.
VII. CONCLUSION
The oil and gas industry is very important to Texas’s economy and
to its citizens; it has been for the last century. But as the eminent
domain law currently stands for pipeline companies, Texas landowners
have almost no bargaining power at all. Landowners do not have any
bargaining power on their front door step, when the companies first
threaten condemnation, and they do not have any power in a Texas
courtroom either. Virtually any pipeline company is able to uproot
one’s front yard, playground, or driveway in order to transport natural
gas or oil products from one point to another. The scales have become
so heavily tilted in favor of pipeline companies that the landowners
have essentially no options left—except to cross their fingers
and hope for reform coming out of Austin—while they watch their
yards being torn up and pipelines laid down.

DISMISSAL OF A BANKRUPTCY CHAPTER 13
FILING: A DEBTOR’S UNCONDITIONAL
RIGHT OR SUBJECT TO THE COURT’S
DISCRETION BASED ON
BAD FAITH?
By Gabriel C. Gonzalez
I.
TABLE OF CONTENTS
TO DISMISS OR NOT TO DISMISS: THE LATEST
INTERPRETATIONAL CONFLICT FACING BANKRUPTCY
COURTS IN ADMINISTERING CHAPTER 13 CASES........ 296 R
II. BACKGROUND OF CHAPTER 13 “WAGE EARNER
REORGANIZATION” OF THE UNITED STATES
BANKRUPTCY CODE .................................... 297 R
A. Brief History of Chapter 13 ......................... 297 R
B. Advantages of Chapter 13 ........................... 299 R
III. TWO RECENT CASES ILLUSTRATING THE SPLIT IN
AUTHORITY: REVEALING THE ARGUMENTS IN FAVOR
OF AND IN OPPOSITION TO THE POSITION THAT THE
DEBTOR’S RIGHT TO DISMISS UNDER § 1307(b) IS
UNCONDITIONAL, EVEN IN THE FACE OF A MOTION TO
CONVERT ............................................... 301 R
A. The Majority Rule: In re Polly ...................... 302 R
B. The Minority Rule: In Re Rosson ................... 303 R
C. Weaknesses of the Minority Rule .................... 304 R
IV. THE PLAIN MEANING OF CODE § 1307(b): UPON
REQUEST OF THE DEBTOR AT ANY TIME, THE COURT
SHALL DISMISS ......................................... 305 R
A. The Plain Meaning Doctrine ........................ 305 R
B. Judicial Interpretation of the Word “Shall” as
Opposed to the Word “May” ........................ 306 R
C. Plain Meaning of the Word “Shall” Applied to Code
§1307(b) ............................................ 307 R
V. LEGISLATIVE INTENT AND THE VOLUNTARY NATURE
OF CHAPTER 13: A STRONG INDICATION THAT THE
DEBTOR SHOULD HAVE AN UNCONDITIONAL RIGHT TO
DISMISS HIS CHAPTER 13 CASE ......................... 309 R
A. Legislative Intent That Chapter 13 be Completely
Voluntary ........................................... 310 R
B. The Completely Voluntary Nature of Chapter 13 as
an Indication of Congressional Intent that the Debtor
Have an Unconditional Right to Dismiss Under
Code § 1307(b) ..................................... 311 R
295

296 TEXAS WESLEYAN LAW REVIEW [Vol. 16
VI. CONSEQUENCES OF VOLUNTARY DISMISSAL AND
REMEDIES AVAILABLE TO THE COURT ARE SUFFICIENT
TO PREVENT ABUSE OF THE BANKRUPTCY SYSTEM
WITHOUT DENYING THE DEBTOR HIS UNCONDITIONAL
RIGHT TO DISMISS ...................................... 313 R
A. Loss of Protection of the Automatic Stay as Well as
the Possibility of a Discharge in the Present Case,
Debtor Remedies Limited to State Court, and the
Heightened Burden for Protection of the Automatic
Stay Placed Upon the Serial Filer as Negative
Consequences of Voluntary Dismissal ............... 313 R
B. The Bankruptcy Court’s Ability to Dismiss the
Debtor’s Case With Prejudice, Exercise Continuing
Control Over the Property of the Estate, Impose
Sanctions, and Initiate Criminal Prosecution as
Sufficient Remedies to Prevent Bankruptcy Abuse... 316 R
VII. COURTS SHOULD INTERPRET CODE § 1307(b) AS
MANDATORY BECAUSE, AS CHAPTER 13 FILINGS HAVE
INCREASED SINCE THE 2005 BAPCPA AMENDMENTS,
UNIFORMITY IN INTERPRETATION THAT COMPORTS
WITH THE PLAIN MEANING OF THE STATUTE IS
CRUCIAL ................................................ 319 R
A. Since the 2005 BAPCPA Amendments, and Most
Noticeably in the Year 2008, Chapter 13 Filings Have
Substantially Increased .............................. 319 R
B. Interpreting Code § 1307(b) as Discretionary When
There is a Motion to Convert Pending Will Increase
Bankruptcy Litigation, and Possibly Deter Some
Otherwise Willing Debtors .......................... 320 R
VIII. CONCLUSION ............................................ 321 R
I. TO DISMISS OR NOT TO DISMISS: THE LATEST
INTERPRETATIONAL CONFLICT FACING BANKRUPTCY
COURTS IN ADMINISTERING CHAPTER 13 CASES
Section 1307(b) of the United States Bankruptcy Code (the
“Code”) commands courts to dismiss chapter 13 cases upon request of
the debtor. This provision currently conflicts with Code § 1307(c),
which gives the court the discretion to convert a debtor’s chapter 13
case to a chapter 7 bankruptcy case for specifically enumerated debtor
misdeeds. Specifically, must the court dismiss a chapter 13 case upon
the debtor’s request even when there is a pending motion to convert
the same? Bankruptcy courts are noticeably split on this question,
with a slight majority holding that the court must dismiss even if a
motion to convert is pending. The minority approach to this issue,
holding that the court does not have to grant a debtor’s motion to
dismiss when there is a pending motion to convert, arouses the need

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 297
to investigate how courts should resolve this issue. The plain meaning
doctrine and its application to the wording of Code § 1307(b) and (c),
Congress’s stated intent that chapter 13 be completely voluntary, and
the existence of other remedies to cure the debtor’s abuse of the
bankruptcy process point to a sensible resolution to the problem.
When courts are faced with a debtor’s motion to dismiss pursuant to
Code § 1307(b), they must grant the motion even if there is a pending
motion to convert under Code § 1307(c).
II. BACKGROUND OF CHAPTER 13 “WAGE EARNER
REORGANIZATION” OF THE UNITED STATES
BANKRUPTCY CODE
Chapter 13 is a unique chapter of the Code in that it is, and has
been since the time of its inception, primarily limited to consumers
and purely voluntary. 1 Certain problems with chapter 13 arose during
its history, and large-scale changes were made to it in 1978 and in
2005. 2 Chapter 13 has several distinct advantages over chapter 7 liquidation,
which can be voluntary or involuntary. Chapter 13 allows the
debtor to keep all of his property, 3 including certain property encumbered
by a lien; 4 chapter 13 affords protection to non-bankrupt codebtors
as well as the principal debtor; 5 and chapter 13 gives the
debtor an unconditional right to opt out of his case at any time unless
he has converted to chapter 13 from another chapter. 6
A. Brief History of Chapter 13
The amendments included in the Chandler Act of 1938 added chapter
XIII7 “Wage Earner Reorganization” to the Bankruptcy Act of
1898 (the “Bankruptcy Act”). 8 In addition to being completely voluntary,
no provision of chapter XIII of the Bankruptcy Act would disqualify
a debtor for “straight” bankruptcy relief (the equivalent to
today’s chapter 7 liquidation). 9 Basically, at chapter XIII’s enactment
1. Samuel L. Bufford & Erwin Chemerinsky, Constitutional Problems in the 2005
Bankruptcy Amendments, 82 AM. BANKR. L.J. 1, 30 (2008).
2. See 8 COLLIER ON BANKRUPTCY 1300.03 (Alan N. Resnick & Henry J. Sommer
eds., 15th rev. ed. 2009) [hereinafter COLLIER]; Ed Flynn & Phil Crewson, Data
Show Trends in Post-BAPCPA Filings, AM. BANKR. INST. J., July–Aug. 2008, at 14.
3. See 11 U.S.C.A. § 1325(a) (West 2004 & Supp. 2009).
4. 11 U.S.C. § 1322(c)(1) (2006).
5. 11 U.S.C. § 1301 (2006).
6. 11 U.S.C. § 1307(b) (2006).
7. “Chapter XIII” refers to the former Chapter 13 prior to the 1978 amendments
to the Bankruptcy Act. Bufford & Chemerinsky, supra note 1, at 31.
8. Id. at 30.
9. Id. (explaining that Chapter XIII of the Bankruptcy Act, as introduced in
1938, would not disqualify consumers for relief in the form of liquidation proceedings.
In 1960, Congress attempted to amend the Bankruptcy Act by denying bankruptcy
relief in the form of liquidation proceedings to any debtor that qualified for a Chapter
XIII relief. Id. This proposal would potentially exacerbate existing problems with

298 TEXAS WESLEYAN LAW REVIEW [Vol. 16
in 1898, it was a completely voluntary alternative for individual debtors
who could otherwise choose bankruptcy relief in the form of asset
liquidation. 10 Chapter XIII facilitated adjustments of individual debts
for the debtor with a regular income through an extension of payment
plans of pre-petition debt. 11 The debtor would generally be able to
repay under such plans with future income under the protection of the
court. 12 Protection of the creditors was promoted through the application
of ratable recoveries that would otherwise not be available in a
liquidation bankruptcy proceeding. 13
In 1978, Congress enacted the Bankruptcy Reform Act, which included
chapter 13 amended from the previous chapter XIII. 14 In the
amended chapter 13, Congress made substantial revisions. 15 A principal
feature of the amended chapter 13 is the debtor’s right to dismiss
the case “at any time, if the case has not been converted under sections
706, 1112, or 1208 of this title.” 16 Congress added 17 this provision
because, as House and Senate reports indicate, there would be
involuntary servitude implications in chapter 13 if the debtor could
not freely opt out. 18
Congress’s most recent large-scale change to the Bankruptcy Reform
Act came in 2005 when it passed the Bankruptcy Abuse Prevention
Consumer Protection Act (“BAPCPA”). 19 BAPCPA purports to
prevent abuse of the bankruptcy process by steering away from chapter
7 liquidation proceedings those debtors that have the ability to pay
at least a portion of their debts. Specifically, Congress imposed the
“means test” in Code § 707(b). 20 Based on a complex formula, if a
debtor’s income is above the median for his state, he may be ineligible
21 to seek relief under chapter 7 of the Bankruptcy Code. 22 The
Chapter XIII because it forced an individual to work for his creditors, possibly violating
the Thirteenth Amendment prohibition against involuntary servitude. Id.).
10. See id.
11. COLLIER, supra note 2, 1300.02.
12. Id.
13. Id.
14. Id. 1300.03.
15. Bufford & Chemerinsky, supra note 1, at 31.
16. 11 U.S.C.A. § 1307(b) (2006); see also Bufford & Chemerinsky, supra note 1,
at 31.
17. See Bankruptcy Amendments and the Federal Judgeship Act of 1984, Pub. L.
98-353, § 527, 98 Stat. 389 (1984). In 1984, Congress amended the provision allowing
the debtor to dismiss voluntarily at any point, it inserted a comma after “time” so the
provision would read, “On request of the debtor at any time, . . . the court shall
dismiss a case under this chapter.” Id.
18. See H.R. REP. NO. 95-595, at 120 (1978), reprinted in 1978 U.S.C.C.A.N. 5963,
6080.
19. Flynn & Crewson, supra note 2, at 14.
20. Robert M. Lawless et al., Did Bankruptcy Reform Fail? An Empirical Study of
Consumer Debtors, 82 AM. BANKR. L.J. 349, 352 & n.17 (2008).
21. See 11 U.S.C.A. § 707(b)(2)(A)(i) (West Supp. 2009). If the debtor’s income is
above the median for his state, a presumption of abuse arises which the debtor must
overcome in order to seek relief under chapter 7.

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 299
idea behind the “means test” is that if the debtor’s income is above an
amount calculated on a state-by-state basis, he is presumed to be able
to pay his debts under a chapter 13 plan or outside of the bankruptcy
system. 23 Congress intended to increase the proportion of chapter 13
filings to chapter 7 filings. 24 Despite BAPCPA’s aims on preventing
abuse of the bankruptcy process, it did not alter the voluntary nature
of chapter 13. 25 Specifically, BAPCPA did not do away with or alter
the debtor’s right to dismiss his case voluntarily whenever he desires. 26
B. Advantages of Chapter 13
Even though the 2005 BAPCPA legislation eliminated several advantages
of a chapter 13 filing as compared to a chapter 7, there remain
several reasons why a consumer debtor would want to file under
chapter 13 rather than under chapter 7. The first and most obvious
reason is that the debtor in a chapter 13 case retains possession of his
property whereas in a chapter 7 case, “property of the estate” 27 is distributed
to the creditors. 28 The debtor in chapter 13 may even keep
certain property encumbered by a lien or other secured interest. 29 If a
secured creditor has a lien on the debtor’s property that is not his
residence30 or personal use vehicle incurred more than one year
before the bankruptcy filing, and the lien is not a purchase money
loan incurred within 910 days of filing, the court may force a repayment
plan over the creditor’s objection, so long as the plan promises
the creditor the present value of the property. 31 A chapter 13 debtor
cannot strip the value of a lien on his residence, but he can force a
plan on his creditor that will allow him to cure his pre-petition default
over a “reasonable time.” 32 If, for example, the debtor missed three
mortgage payments of $700 before he filed his chapter 13 petition and
the terms of the mortgage provide that such a default will make the
entire loan balance due immediately, the court may force, through a
plan, the mortgage creditor to allow the debtor to cure the $2,100 de-
22. Id.; but see 11 U.S.C.A. § 707(b)(2)(D) (enumerating the exceptions to section
707 means testing).
23. See 11 U.S.C.A. § 707(b)(2)(A)(i).
24. Lawless, supra note 20, at 352.
25. Bufford & Chemerinksy, supra note 1, at 32.
26. Id.
27. 11 U.S.C.A. § 541 (West 2004 & Supp. 2009) (providing that interests in property
held prior to the filing of the (chapter 7) bankruptcy petition, whether held solely
by the debtor or jointly, excluding interests enumerated section 541(b), become property
of the estate).
28. 11 U.S.C.A. § 726(a) (West 2004 & Supp. 2009).
29. 11 U.S.C. § 1322(b) (2006).
30. Id. § 1322(b)(2). 11 U.S.C. § 1322(b) only excepts interests in real property
that is the debtor’s principal residence from the “cram-down” plan modification of
§ 1325. Interests in real property not the debtor’s principal residence are subject to
cram-down plan modification by the debtor. Id.
31. 11 U.S.C.A. § 1325(a)(9) (West Supp. 2009).
32. 11 U.S.C. § 1322(b)(5).

300 TEXAS WESLEYAN LAW REVIEW [Vol. 16
fault and maintain the mortgage by continuing usual monthly payments.
33 If the debtor chooses to continue making usual payments on
his home mortgage and cure the default over a reasonable time, he
may remain in his home. 34 In a chapter 7 bankruptcy, all of the
debtor’s non-exempt assets are transferred to the estate and distributed
by the trustee to the creditors as “property of the estate.” 35
Most, if not all states as well as the federal government provide for a
homestead exemption to a certain amount ranging from about $2,500
to unlimited. 36 Generally, exempt homestead property cannot be
made property of the estate. 37 BAPCPA, however, limited this exemption
by carving out the amount of allowed exempt property according
to the debtor’s disposition of non-exempt property and placed
a $125,000 cap on value added to the homestead or a new homestead
purchased within 1,215 days before filing. 38
Another reason that the consumer debtor would want to file under
chapter 13 as opposed to chapter 7 is that chapter 13 applies protection
through an automatic stay for both the debtor and the non-bankrupt
co-debtors. 39 While Code § 362 restrains creditors from
attempting to collect from the actual debtor, Code § 1301 restrains
creditors from attempting to collect from a co-debtor. 40 Code § 1301
affords protection for co-debtors if the debt is a consumer debt and
the co-debtor is not in the credit business. 41 Chapter 7 has no analogue
to Code § 1301, meaning only Code § 362 is available to provide
protection from collection attempts to the debtor, while creditors are
free to attempt to collect from any non-bankrupt co-debtors. 42
The most important reason, for the purposes of this comment, that a
debtor would want to file under chapter 13 as opposed to chapter 7, is
in chapter 13, the court “shall dismiss on request of the debtor at any
time,” whereas in chapter 7, the debtor may dismiss his case only “for
cause.” 43 The court has much discretion in determining whether to
allow the debtor to dismiss his chapter 7 case, 44 whereas any such discretion,
arguably does not exist for the court when the chapter 13
33. See DAVID G. EPSTEIN, BANKRUPTCY AND RELATED LAW IN A NUTSHELL 386
(7th ed. 2005).
34. Id.
35. 11 U.S.C. §1307(b) (2006).
36. US Legal Forms, Homestead Exemptions and Forms: State Laws, http://www.
uslegalforms.com/realestate/homestead/ (last visited Sept. 14, 2009).
37. EPSTEIN, supra note 33, at 178.
38. Id.
39. 11 U.S.C. §§ 362(a)(1), 1301(a) (2006).
40. EPSTEIN, supra note 33, at 369.
41. 11 U.S.C. § 1301(a).
42. EPSTEIN, supra note 33, at 393.
43. 11 U.S.C.A. §§ 1307(b), 707 (West 2004 & Supp. 2009).
44. See 11 U.S.C. § 707(a) (enumerating the reasons for which a court may dismiss
a chapter 7 case).

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 301
debtor has made a motion to dismiss under Code § 1307(b). 45 The
debtor’s ability to dismiss his case at any time and for any reason gives
him much more flexibility and liberty once he has actually filed his
bankruptcy petition. 46 Most notably, the chapter 13 debtor can avoid
having his case converted to a chapter 7 liquidation proceeding if he is
ever unwilling to have his assets liquidated, whereas a debtor under
chapter 7 can only avoid liquidation of his assets if the court dismisses
“for cause.” 47 Currently, courts struggle with the force of § 1307(b);
specifically whether or not it confers an unconditional right for the
chapter 13 debtor so long as his case had not previously been converted
under Code §§ 706, 1112, or 1208. 48 The slight majority of
courts hold that the debtor’s right to dismiss his case under Code
§ 1307(b) is absolute short of a prior conversion, even in the face of a
creditor or U.S. Trustee’s motion to convert under Code § 1307(c). 49
A substantial minority of courts have held that when there is a pending
motion to convert under Code § 1307(c) and the debtor makes a
subsequent motion to dismiss under Code § 1307(b), the court has the
discretion to weigh the debtor’s motion under Code § 1307(b) with
the Code § 1307(c) motion and choose whether to convert or dismiss
the case. 50
III. TWO RECENT CASES ILLUSTRATING THE SPLIT IN AUTHORITY:
REVEALING THE ARGUMENTS IN FAVOR OF AND IN OPPOSITION TO
THE POSITION THAT THE DEBTOR’S RIGHT TO DISMISS UNDER
CODE § 1307(b) IS UNCONDITIONAL, EVEN IN THE
FACE OF A MOTION TO CONVERT
Courts are divided over whether, under Code § 1307(b), they are
obligated to dismiss the debtor’s case upon his request when a motion
to convert the case under Code § 1307(c) has been filed. 51 Code
§ 1307(b) provides, “On request of the debtor at any time, if the case
has not been converted under sections 706, 1112, or 1208 of this title,
the court shall dismiss a case under this chapter.” 52 Code § 1307(c)
provides:
On request of a party in interest or the United States trustee and
after notice and a hearing, the court may convert a case under chapter
7 of this title . . . for cause, including:
45. Barbieri v. Raj Acquisition Corp. (In re Barbieri), 199 F.3d 616, 619 (2d Cir.
1999).
46. See Bufford & Chemerinsky, supra note 1, at 31 (discussing how an unwilling
debtor can avoid conversion to a liquidation proceeding by being able to opt out
whenever he desires).
47. See 11 U.S.C. § 707(b).
48. Barbieri, 199 F.3d at 619.
49. Id. at 620.
50. See id.
51. Id.
52. 11 U.S.C. § 1307(b) (2006).

302 TEXAS WESLEYAN LAW REVIEW [Vol. 16
(1) unreasonable delay by the debtor that is prejudicial to creditors;
(2) nonpayment of any fees and charges required under chapter 123
of title 28;
(3) failure to file a plan timely under section 1321 of this title;
(4) failure to commence making timely payments under section
1326 of this title;
(5) denial of confirmation of a plan under section 1325 of this title
and denial of a request made for additional time for filing another
plan or modification of a plan;
(6) material default by the debtor with respect to a term of a confirmed
plan;
(7) revocation of the order of confirmation under section 1330 of
this title, and denial of confirmation of a modified plan under section
1329 of this title;
(8) termination of a confirmed plan by reason of the occurrence of
a condition specified in the plan other than completion of payments
under the plan;
(9) only on request of the United States trustee, failure of the
debtor to file, within fifteen days, or such additional time as the
court may allow, after the filing of the petition commencing such
case, the information required by paragraph (1) of section 521;
(10) only on request of the United States trustee, failure to timely
file the information required by paragraph (2) of section 521; or
(11) failure of the debtor to pay any domestic support obligation
that first becomes payable after the date of the filing of the
petition. 53
Currently, the slight majority of courts have held that they are obligated
to dismiss pursuant to the debtor’s motion under Code
§ 1307(b) despite a pending motion by the creditor or United States
Trustee under Code § 1307(c) generally because of the statute’s
mandatory language. A substantial minority of courts essentially have
attempted to justify their position by explaining that when there is a
pending motion made by an interested party under Code § 1307(c),
they have the discretion to consider the Code § 1307(c) motion in conjunction
with the debtor’s motion under Code § 1307(b), and if the
case is converted to one under chapter 7, the debtor’s motion is no
longer applicable. 54
A. The Majority Rule: In re Polly
The slight majority of courts have, when faced with conflicting motions
under Code § 1307(b) and Code § 1307(c), adopted the position
espoused by the court in In re Polly. 55 In Polly, a creditor, RealPage
Inc., (“RealPage”) filed a motion to convert the debtor’s chapter 13
case to one under chapter 7 pursuant to Code § 1307(c) due to alleged
53. Id. § 1307(c).
54. In re Jacobsen, 378 B.R. 805, 809 (Bankr. E.D. Tex. 2007).
55. In re Polly, 392 B.R. 236, 239 (Bankr. N.D. Tex. 2008).

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 303
acts of bad faith and for failure to file tax returns as required by Code
§ 1308. 56 In response the debtor filed a motion to continue
RealPage’s motion to convert, to which RealPage objected. 57 The
court held a hearing on RealPage’s motion to convert, and the
debtor’s motion to continue was denied. 58 Upon denial of the motion
to continue and after commencement of the hearing on the motion to
convert, the debtor orally moved to dismiss his case under Code
§ 1307(b), and the motion was granted. 59 RealPage filed a motion to
reconsider, claiming that the debtor did not have an absolute right to
dismiss under Code § 1307(b) because RealPage had previously made
a motion to convert under Code § 1307(c). 60 The court resolved the
issue by examining the plain language of Code § 1307(b), the voluntary
nature and legislative intent behind chapter 13, and the availability
of methods to prevent abuse of the bankruptcy system other than
denying the debtor’s motion to dismiss under Code § 1307(b). 61 Specifically,
the court found that the word “shall” in Code § 1307(b) creates
an obligation for the court to dismiss upon request by the debtor,
which is impervious to judicial discretion. 62 Also, the court reasoned
that the plain meaning of Code § 1307(b) was not “demonstrably at
odds” with congressional intent because chapter 13 was intended by
Congress to be purely voluntary. 63 Finally, the court reasoned that
denying the debtor relief under § 1307(b) when there was a conflicting
motion to convert under Code § 1307(c) was not the only possible
protection against the ill-motivated debtor. 64 Therefore, prevention
of abuse of the bankruptcy system did not require that Code § 1307(c)
be held to trump the plain meaning of Code § 1307(b). 65
B. The Minority Rule: In Re Rosson
A substantial minority of courts faced with conflicting motions
under Code §§ 1307(b) and (c) by the debtor and creditor respectively,
have rejected the position adopted in Polly in favor of considering
both motions and, if necessary, granting the motion to convert
over the debtor’s motion to dismiss. 66 In Rosson, the debtor admittedly
failed to deliver funds as directed by the court and the court
56. Id. at 238.
57. Id.
58. Id.
59. Id. (permitting an oral motion pursuant to the exception in Fed. R. Bankr. P.
9013, which requires motions to dismiss to be stated in writing except when made
during a hearing).
60. Id.
61. See id. at 243–46.
62. Id. at 239.
63. Id.
64. Id. at 245.
65. Id. at 246.
66. See, e.g., Rosson v. Fitzgerald (In re Rosson), 545 F.3d 764, 768–69 (9th Cir.
2008).

304 TEXAS WESLEYAN LAW REVIEW [Vol. 16
threatened to convert the case to chapter 7 on its own motion. 67 The
docket reflects that the court converted the case to one under chapter
7, even though no formal order was entered or filed. 68 On the same
day, the debtor filed a “Notice of Dismissal” notifying the court that
he was voluntarily dismissing his case under Code § 1307(b). 69 The
court subsequently entered an order formally converting the case to
one under chapter 7, from which the debtor appealed to the district
court. 70 The order of the bankruptcy court was affirmed, and the
debtor appealed to the Ninth Circuit Court of Appeals. 71 The Ninth
Circuit held that the debtor’s right to dismiss his chapter 13 case is not
absolute, but rather was qualified by the court’s power to convert a
case based on the debtor’s bad-faith conduct or abuse of the bankruptcy
process. 72 Specifically, the court held that it had the discretion
to determine whether to grant the debtor’s motion to dismiss in the
face of a motion to convert based on bad-faith conduct. 73 The court
relied on the recent U.S. Supreme Court decision in Marrama v. Citizens
Bank of Massachusetts, 74 holding, “even language that seems to
be mandatory upon the court is subject to the court’s power to police
bad-faith and abuse of process.” 75
C. Apparent Weaknesses of the Minority Rule
In essence, the slight majority of courts have held that the debtor’s
right to dismiss is absolute if it has not been converted from another
chapter of the code because of the plain meaning of the word “shall,”
as well as the legislative intent and voluntary nature of chapter 13. 76
The main reasoning of the minority position on this issue is that the
debtor’s right to dismiss is always subject to the court’s power to prevent
bad-faith conduct and abuse of the bankruptcy process. 77 However,
courts applying the majority position have dealt with the
prospect of bad-faith conduct that the minority of courts claim will
follow if the debtor is able to dismiss his case when there is a pending
motion to convert. 78 Majority-positioned courts have identified other
methods to prevent bad-faith conduct and abuse of the bankruptcy
process such as lifting the debtor’s protection of the automatic stay in
bankruptcy court, dismissing pursuant to Code § 1307(b) with
67. Id. at 768.
68. Id.
69. Id.
70. Id. at 768–69.
71. Id.
72. Id. at 774.
73. Id. at 775.
74. Marrama v. Citizens Bank of Mass., 549 U.S. 365, 127 S.Ct. 1105 (2007).
75. Rosson, 543 F.3d at 773 n.12.
76. See In re Polly, 392 B.R. 236, 239–46 (Bankr. N.D. Tex. 2008).
77. Id. at 242.
78. Id. at 244–45; see also In re Harper-Elder, 184 B.R. 403, 404 (Bankr. D.D.C.
1995).

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 305
prejudice to refiling, exercising continuing control of the debtor’s
property of the estate pursuant to Code § 349(b)(3), imposing sanctions
for misconduct pursuant to Federal Rule of Bankruptcy Procedure
9011, and referring the debtor for criminal prosecution for
bankruptcy fraud. 79 These methods are discussed at greater length in
this article.
Finally, courts espousing the minority position now rely heavily on
the recent Supreme Court decision in Marrama. 80 Their reliance is
misplaced because Marrama deals with Code § 706(a), which provides
that a debtor “may convert a case under [chapter 7] to a case under
chapter 13,” and the decision only gives the court the power to shortcircuit
the two-step process of converting a case to chapter 13 under
Code § 706(a) and reconverting the case under Code § 1307(c). 81
Marrama only allows the court to deny the Code § 706(a) request
based on bad-faith conduct because the court could re-convert the
case back to chapter 7 pursuant to Code § 1307(c). 82 The court does
not have such discretion with a motion to dismiss under Code
§ 1307(b). 83
The majority position is more in line with the plain language of the
statute, legislative intent, and the structure of chapter 13. The majority
position is also more viable given the availability to courts of remedies
for bad-faith conduct and abuse of the bankruptcy process. In
short, the court should have no discretion in this matter.
IV. THE PLAIN MEANING OF CODE § 1307(b): “UPON REQUEST
OF THE DEBTOR AT ANY TIME, THE
COURT SHALL DISMISS.”
A. The Plain Meaning Doctrine
In United States v. Ron Pair Enterprises, Inc., the Supreme Court
held “the plain meaning of legislation should be conclusive except in
rare cases in which the literal application of the statute will produce a
result demonstrably at odds with the intentions of its drafters.” 84 The
Court in Ron Pair reasoned that, over the course of a decade, Congress
substantially overhauled the bankruptcy system, and it would be
unrealistic to expect Congress to explain with particularity, each step
it took. 85 Therefore, as long as the statutory scheme is coherent and
consistent, it is generally unnecessary to inquire beyond the plain lan-
79. Polly, 392 B.R. 245–46.
80. Id. at 246.
81. Marrama v. Citizens Bank of Mass., 549 U.S. 365, 371, 127 S. Ct 1105, 1109–10
(2007).
82. Id. at 1010–11.
83. Polly, 392 B.R. at 246.
84. United States v. Ron Pair Enters., Inc., 489 U.S. 235, 242 (1989) (quoting Griffin
v. Oceanic Contractors, Inc., 458 U.S. 564, 571 (1982)).
85. Id. at 240.

306 TEXAS WESLEYAN LAW REVIEW [Vol. 16
guage of the statute. 86 In resolving a dispute over the meaning of a
provision in the Code, the inquiry should begin with the language of
the statute itself and unless the meaning is ambiguous or clearly at
odds with congressional intent, the inquiry should end with such
language. 87
The Supreme Court further articulated its commitment to the plain
meaning of the Code in Lamie v. United States Trustee. 88 The Court
reasoned that courts can avoid the pitfall of inquiring into the controversial
realm of legislative history by adhering to the plain meaning of
a statute. 89 In Lamie, the Court set a high standard for claims of ambiguities
in statutes by holding that even if a phrase is awkward or
ungrammatical, it must be applied as written so long as the meaning is
straightforward and does not lead to an absurd result. 90
B. Judicial Interpretation of the Word “Shall” as
Opposed to the Word “May”
The Supreme Court held in Lexecon v. Milberg, Weiss, Bershad,
Hynes & Lerach that the word “shall” in statutory language normally
creates “an obligation impervious to judicial discretion.” 91 Unless
there is contrary legislative intent clearly expressed, the word “may”
ordinarily is construed as permissive or directory while the words
“must” and “shall” are deemed to be imperative or mandatory, leaving
no option for the court, other than to apply the command of the
statute. 92 Additionally, the presence of the words “may” and “shall”
in close proximity to one another indicates that Congress understood
the distinction between the two words and intended each to mean
what it says. 93 Finally, the Supreme Court will apply “shall” as
mandatory even if there is a long-standing practice of applying the
rule or statute permissively. 94
The only recognized exceptions to applying “shall” as mandatory
are either when doing so clearly goes against legislative intent and no
public benefit requires it to be given an imperative meaning, 95 or applying
“shall” as mandatory will render the statute or rule unconstitutional.
96 In both of these scenarios, a number of state courts have held
86. Id. at 240–41.
87. Id. at 241.
88. Lamie v. U.S. Trustee, 540 U.S. 526, 536 (2004).
89. Id.
90. See id. at 534–35.
91. Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35
(1998).
92. 82 C.J.S. Statutes: Construction of May and Shall § 368 n.79 (1999 & Supp.
2009).
93. Id. § 368.
94. Lexecon, 523 U.S. at 35.
95. C.J.S. Statutes: Construction of May and Shall, supra note 91.
96. 82 C.J.S. Determination of Legislative Intent § 369 n.4 (1999).

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 307
the word “shall” to be permissive. 97 A mandatory application of the
word “shall” goes against legislative intent if a permissive application
is necessary to accomplish an intended legislative purpose. 98 Courts
will apply a permissive interpretation of the word “shall” if a
mandatory interpretation will render the statute or rule unconstitutional
and a permissive interpretation will not. 99 Absent these rare
situations, statutory language providing that the court “shall” take
some action is to be interpreted to mean that the court has no discretion
to refrain once the party seeking relief has fulfilled the statutory
requirements. 100
C. Plain Meaning of the Word “Shall” Applied to § 1307(b)
In Code § 1307(b), the language provides that the court “shall” dismiss
upon request by the debtor. 101 Several courts adopting the majority
position start and end their inquiry with the plain meaning of
the statute. 102 All courts adopting the majority position have held that
the plain meaning of “shall” was at least prominent in determining
that Code § 1307(b) gives the chapter 13 debtor an absolute right to
dismiss his case. 103 In Code § 1307(b), Congress unambiguously instructs
courts to dismiss the debtor’s chapter 13 case upon request by
the debtor, unless the case has previously been converted from another
chapter. 104 Congress made its directive clear by qualifying an
exception to Code § 1307(b), being the limitation of a previous conversion
from another chapter. 105 This is clear evidence that Congress
intended certain limitations, and if those limitations were not expressly
stated, dismissal would be mandatory for the court. 106 Arguably,
if Congress intended to limit a debtor’s right to dismiss his case
under Code § 1307(b) when a motion to convert has been filed, it
would have expressly provided for such limitation in the statute. 107
Further indication that Congress intended “shall” to be mandatory
in Code § 1307(b) is its use of the word “may” in Code sections
97. Id.
98. 97 N.Y. JUR. 2D Statutes § 17 (2009), 17 NYJUR STATUTES § 17 (Westlaw).
99. C.J.S. Statutes: Construction of May and Shall, supra note 91, § 368 n.4.
100. N.Y. JUR. 2D Statutes, supra note 97, § 17 n.9.
101. 11 U.S.C. § 1307(b) (2006).
102. See In re Sickel, No. 08-00309, 2008 WL 5076981, at *1 (Bankr. D.D.C. Sept.
26, 2008); Barbieri v. Raj Acquisition Corp. (In re Barbieri), 199 F.3d 616, 619–20 (2d
Cir. 1999) (holding that the plain meaning of “shall” in 1307(b) was controlling and
was a reflection of legislative intent).
103. See In re Polly, 392 B.R. 236, 239 (Bankr. N.D. Tex. 2008); In re Patton, 209
B.R. 98, 101 (E.D. Tenn. 1997); In re Harper-Elder, 184 B.R. 403, 404 (Bankr. D.D.C.
1995).
104. Polly, 392 B.R. at 240 & n.6.
105. Patton, 209 B.R. at 101.
106. Id.
107. See id. (stating that based on the plain language of subsection (b), the court
concludes that Congress intended a debtor’s dismissal motion to prevail over a creditor’s
competing motion to convert).

308 TEXAS WESLEYAN LAW REVIEW [Vol. 16
1307(a) and (c). 108 Code sections 1307(a) and (c) are in the same statute
as Code § 1307(b), which is a close proximity. 109 This distinction
indicates that Congress intended subsection (b) to be a mandatory directive
while subsections (a) and (c) were to be permissive.
Construing the word “shall” in Code § 1307(b) to be mandatory,
even in the face of a Code § 1307(c) motion to convert, will not render
Code § 1307(b) unconstitutional. 110 In fact, both House and Senate
reports indicate that in amending the Bankruptcy Act in 1978, Congress
was concerned with the involuntary servitude implications of requiring
a debtor to work for the benefit of his creditors if the debtor
could not opt out whenever he so desired. 111 Courts have articulated
that the right of the debtor to opt out should operate to avoid involuntary
servitude. 112 From the congressional history as well as several
bankruptcy courts, it appears more likely that construing “shall” in
Code § 1307(b) to be permissive rather than mandatory for a court
will have constitutional implications.
Some courts espousing the minority position disagree, concluding
that 1307(b) is merely a statutory shield against involuntary servitude,
not against a liquidation proceeding. 113 These courts contend that liquidation
does not involve involuntary servitude, so refusing to dismiss
upon the debtor’s request when there is a competing motion to convert
the chapter 13 case to one under chapter 7 will not have involuntary
servitude implications. 114 Either the case will be converted to a
chapter 7 liquidation of assets or the court will dismiss the case. 115 It
is quite possible that § 1307(b) provides more protection against involuntary
servitude than is necessary in that not every circumstance in
which the court could refuse the debtor’s motion to dismiss would result
in involuntary servitude prohibited by the Thirteenth Amendment.
At a minimum, interpreting “shall” in Code § 1307(b) as
mandatory will not render the statute unconstitutional.
A court adopting the minority position has used a similar plain-language
argument, asserting that the plain language of Code § 1307(c)
could not be applied if the court had to grant the debtor’s Code
§ 1307(b) motion to dismiss in the face of a motion to convert under
1307(c). 116 Specifically, the Bankruptcy Court for the Eastern District
of Texas opined in Jacobsen that Code § 1307(c) has effect “except as
108. 11 U.S.C.A. § 1307(a), (c) (West 2004 & Supp. 2009).
109. Id.
110. Bufford & Chemerinksy, supra note 1, at 31.
111. Id.
112. FitzSimmons v. Walsh (In re FitzSimmons), 20 B.R. 237, 240 (B.A.P. 9th Cir.
1982); In re Spencer, 137 B.R. 506, 513 (Bankr. N.D. Okla. 1992); In re Noonan, 17
B.R. 793, 799–800 (Bankr. S.D.N.Y 1982).
113. In re Jacobsen, 378 B.R. 805, 810 (Bankr. E.D. Tex. 2007).
114. Id.
115. Id. at 111.
116. Id.

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 309
provided in subsection (e) of Code § 1307.” 117 Code § 1307(c) does
not expressly carve out a separate exception for (b) of Code § 1307,
and to not give effect to a motion made under Code § 1307(c) because
of a subsequent motion under Code § 1307(b) would be reading in an
exception not expressed in the statutory language. 118 This argument,
however, does not take into account the changes made to Code § 1307
by the 2005 BAPCPA amendments. 119 Prior to the 2005 BAPCPA
amendments, Code § 1307(e) provided that the court could not convert
a case under a chapter in which the debtor was not eligible. 120 In
2005, Congress inserted a new subsection between the previous subsection
(e) and subsection (d), which is now the new subsection (e)
and provides that the court shall dismiss or convert the chapter 13
case to a chapter 7 upon the debtor’s failure to file a tax return under
Code § 1308. 121 Upon adding the new subsection (e) in 2005, Congress
did not amend subsection (c). 122 Whereas before it was clear
that Congress intended to limit the court’s power to convert a chapter
13 case depending on the debtor’s eligibility under other chapters, it is
inconsistent to assume the new subsection (e) is an intended limitation.
123 The new subsection (e) is a command to the court to dismiss
or convert a case, and the language of subsection (c) in relevant part
makes an exception to the court’s power to convert a case. For this
reason, at least one court adopting the majority position found the
language of Code § 1307(e) to be irrelevant in construing the interaction
of subsections (b) and (c). 124
V. LEGISLATIVE INTENT AND THE VOLUNTARY NATURE OF
CHAPTER 13: A STRONG INDICATION THAT THE DEBTOR
SHOULD HAVE AN UNCONDITIONAL RIGHT TO
DISMISS HIS CHAPTER 13 CASE
In 1978, Congress expressly affirmed its intent that chapter 13 be
purely voluntary for the debtor. 125 The committee report, as well as
the laws codified manifested Congress’s intent. 126 Congress expressly
rejected an involuntary chapter 13 proceeding as well as a provision
that would deny “straight” bankruptcy relief to debtors qualifying for
117. Id.
118. Id.
119. In re Polly, 329 B.R. 236, 242 (Bankr. N.D. Tex. 2008).
120. Id.
121. Id.
122. Id.
123. See id. (noting that subsection (e) is a qualitatively different sort of limitation
than that under subsection (f)).
124. Id. (citing In re Jacobsen, 378 B.R. 805, 810 (Bankr. E.D. Tex. 2007).
125. H.R. Rep. No. 95-595, at 120 (1978), reprinted in 1978 U.S.C.C.A.N. 5963,
6080.
126. COLLIER, supra note 2, 1300.41 & n.5.

310 TEXAS WESLEYAN LAW REVIEW [Vol. 16
chapter 13 relief. 127 Specific provisions in the Code also indicate Congress’s
intent that chapter 13 be completely voluntary. 128 The Code
specifically provides that involuntary cases may be commenced under
chapters 7 and 11 only, and in a chapter 13 proceeding, only the
debtor may propose a plan. 129 Courts adopting the majority position
have found that because Congress intended chapter 13 to be completely
voluntary, the debtor’s right to dismiss under Code § 1307(b)
is unconditional, even when there is a pending motion to convert
under Code § 1307(c). 130 Specifically, if the court could grant a motion
to convert under Code § 1307(c) and deny a competing motion
under Code § 1307(b), courts would seriously infringe on the debtor’s
right to choose between liquidation and debt adjustment, and courts
would give creditors a method of circumventing the statutory requirements
of initiating an involuntary proceeding against the unwilling
debtor. 131
A. Legislative Intent That Chapter 13 be Completely Voluntary
In reforming the Bankruptcy Act in 1978, the House Judiciary Committee
of the 90th Congress firmly rejected the idea of mandatory or
involuntary chapter 13. 132 Congress rejected an involuntary form of
chapter 13 because it feared that “forcing an individual to work for his
creditors would violate the Thirteenth Amendment prohibition
against involuntary servitude.” 133 Congress also rejected an involuntary
chapter 13 by reasoning that an unwilling debtor is less likely to
retain his job or to cooperate in the repayment plan, which would result
in bad public policy. 134 Congress even rejected the idea of denying
“straight” (chapter 7) bankruptcy relief to individual debtors who
qualified for relief under chapter 13. 135 Opponents of denying straight
bankruptcy relief to debtors qualifying for chapter 13 relief argued
that “fulfillment of a debtor’s commitment made pursuant to a chapter
13 plan requires not merely a debtor’s consent . . . but a positive
determination by him and his family to live within the constraints imposed
by the plan during its entire term and a will to persevere with
the plan to the end.” 136 Congress intended for debtors to file for relief
under chapter 13 not just because it was the only type of bankruptcy
127. H.R. REP. NO. 95-595, at 120.
128. COLLIER, supra note 2, 1300.41 & n.7.
129. 11 U.S.C. §§ 303(a), 1321 (2006).
130. See Barbieri v. Raj Acquisition Corp. (In re Barbieri), 199 F.3d 616, 620 (2d
Cir. 1999) (citing several other decisions in discussing congressional intent being furthered
by holding that Code § 1307(b) conferred an unconditional right).
131. See, e.g., In re Patton, 209 B.R. 98, 102 (Bankr. E.D. Tenn. 1997).
132. Id.
133. Id.
134. Id.
135. Id.
136. Id.

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 311
relief available to them, but because they were willing to live within
the constraints of the proposed plan in order to keep their assets and
at the same time repay their creditors with future earnings. 137
Congressional intent that chapter 13 be completely voluntary materialized
into several provisions in the Code. 138 Specifically, Code
§ 303(a) provides that an involuntary case may be commenced under
chapters 7 and 11, but not chapter 13. 139 Code § 1321(a) provides, in
relevant part, that only a debtor may propose a chapter 13 plan, not
the creditors or the court. 140 In contrast, under chapter 11, somebody
other than the debtor may file a plan after the debtor’s exclusivity
period has run. 141 Finally, Congress provided for a method under
chapter 11 in which an involuntary case may be commenced against an
individual with regular income that is eligible for chapter 13 relief, but
no such method is available under chapter 13. 142 The statutory construction
of the former Bankruptcy Act of 1978 is a further indication
that Congress intended chapter 13 to be completely voluntary. 143
B. The Completely Voluntary Nature of Chapter 13 as an Indication
of Legislative Intent that the Debtor Have an Unconditional Right to
Dismiss Under Code § 1307(b)
Many courts adopting the majority position have reasoned that
Congress intended for Code § 1307(b) to give a chapter 13 debtor an
unconditional right to dismiss because Congress expressed its intent
that chapter 13 proceedings be entirely voluntary. 144 Specifically,
courts assert that to restrict a debtor’s unqualified right of dismissal
under chapter 13 would significantly depart from chapter 13 legislative
history. 145 Involuntary conversion to a case under a different chapter
would largely compromise the voluntary nature of chapter 13. An example
of how Congress has traditionally dealt with the possibility of
involuntary conversion was under former § 666 of the Bankruptcy Act
and Rule 13-112(a)(2), which provided that the court could not convert
a case from chapter XIII to chapter VII146 without the debtor’s
written consent. 147 This former provision illustrates Congress’s intent
137. Id. at 121.
138. COLLIER, supra note 2, 1300.41 & n.7.
139. 11 U.S.C. § 303(a) (2006).
140. 11 U.S.C. § 1321 (2006); S. Rep. No. 95-989, at 138 (1978), reprinted in 1978
U.S.C.C.A.N. 5787, 5924.
141. 11 U.S.C. § 1121(c) (2006).
142. See COLLIER, supra note 2, 1300.41 & n.5.
143. See Barbieri v. Raj Acquisition Corp. (In re Barbieri), 199 F.3d 616, 620 (2d
Cir. 1999).
144. Tidewater Fin. Co. v. Williams, 498 F.3d 249, 252 (4th Cir. 2007); see also In re
Patton, 209 B.R. 98, 102 (Bankr. E.D. Tenn. 1997); Barbieri, 199 F.3d at 619–20.
145. Patton, 209 B.R. at 102.
146. See Bufford & Chemerinsky, supra note 1, at 30. “Chapter VII” is the Bankruptcy
Act (pre-1978) predecessor of the current Chapter 7. Id.
147. Patton, 209 B.R. at 102.

312 TEXAS WESLEYAN LAW REVIEW [Vol. 16
that the debtor, and only the debtor, could choose between debt adjustment
under chapter XIII and liquidation under chapter VII. 148
Even though written consent is no longer needed for conversion, Congressional
intent that the debtor be able to choose between a chapter
13 and chapter 7 by having a guaranteed right of dismissal is still present.
149 Also, under the former Bankruptcy Act, Congress saw the
forced sale of a wage-earner’s property in a liquidation proceeding to
be too severe to impose involuntarily. 150 Congress could only have
preserved the debtor’s freedom to choose between debt adjustment
and liquidation by giving the debtor a guaranteed right of dismissal. 151
Another major argument asserted by courts adopting the majority
position is that considering a Code § 1307(c) motion to convert notwithstanding
a Code § 1307(b) motion to dismiss would effectively allow
creditors to circumvent the statutory requirements of Code
§ 303(b) for an involuntary filing. 152 An involuntary filing can be
made against an individual under chapters 7 and 11. 153 Such filing,
however, must be made by three or more entities each of which “is
either a holder of a claim against [the debtor] that is not contingent to
liability . . .” and “if such claims aggregate at least $12,300 more than
the value of any lien on property of the debtor securing such claims
held by the holders of such claims.” 154 Basically, there must be at
least three unsecured creditors with claims in the aggregate of $13,475
or more that join in the involuntary petition. 155 Also, if the debtor has
less than twelve unsecured creditors, a single creditor with a claim of
$13,475 or more can file an involuntary petition. 156 A creditor that
can proceed in transferring a chapter 13 case to one under chapter 7
against a debtor that has made a motion to dismiss is effectively filing
an involuntary chapter 7 petition without having to conform to the
requirements specified in Code § 303(b). 157 Congress codified a procedure
for creditors to force an unwilling debtor into a chapter 7 case,
and set forth specific requirements that creditors must fulfill in order
to do so. 158 With the specific procedure and requirements for the filing
of an involuntary chapter 7 codified in Code § 303(b), it is unlikely
that Congress intended for creditors to be able to force an unwilling
debtor into a chapter 7 case by any other method.
148. Id.
149. See id. (citing In re Hearn, 18 B.R. 605, 606 (Bankr. D. Neb. 1982)).
150. Hearn, 18 B.R. at 606.
151. Id.
152. Patton, 209 B.R. at 102.
153. 11 U.S.C. § 303(b) (2006).
154. Id.
155. EPSTEIN, supra note 33, at 140.
156. Id.
157. Patton, 209 B.R. at 102.
158. Id.

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 313
VI. CONSEQUENCES OF VOLUNTARY DISMISSAL AND REMEDIES
AVAILABLE TO THE COURT AS SUFFICIENT TO PREVENT ABUSE OF
THE BANKRUPTCY SYSTEM WITHOUT DENYING THE DEBTOR
HIS UNCONDITIONAL RIGHT TO DISMISS
The primary concern for courts adopting the minority position is
that courts will be unable to prevent bankruptcy abuse if dismissal
upon request is an unconditional right. 159 Specifically, these courts
have expressed concern that if the debtor’s right to dismiss is unconditional,
he will be able to evade the consequences of abuses of the
bankruptcy process enumerated under Code § 1307(c). 160 However,
there are several undesirable consequences of dismissing a chapter 13
case. In the present case, dismissal will result in the debtor’s loss of
protection of the automatic stay and the possibility of receiving a discharge.
161 Additionally, the debtor’s remedies will be limited to those
available in state court, and he stands to lose protection of the automatic
stay if he refiles within a year after dismissal of his original
case. 162 The Code gives the court other methods of preventing abuse
by allowing it to dismiss the debtor’s case with prejudice to refiling
and exercise continuing control over the debtor’s property. 163 The
court can also impose sanctions, and refer ill-motivated debtors that
abuse the bankruptcy process to the United States Attorney for criminal
prosecution. 164
A. Loss of Protection of the Automatic Stay as Well as the
Possibility of a Discharge in the Present Case, Debtor Remedies
Limited to State Court, and the Heightened Burden for Protection of
the Automatic Stay Placed Upon the Serial Filer as Negative
Consequences of Voluntary Dismissal
Upon filing a bankruptcy petition, a stay is immediately and automatically
imposed that effectively stays commencement or continuation
of judicial, administrative, or other collection actions against the
debtor including the recovery for any claim arising before the petition
was filed. 165 Even though the stay does not prevent criminal, domes-
159. In re Polly, 392 B.R. 236, 244 (Bankr. N.D. Tex. 2008).
160. Kirshenbaum Inv. Co. v. Gaudet (In re Gaudet), 132 B.R. 670, 674 (D.R.I.
1991).
161. In re Harper-Elder, 184 B.R. 403, 407 (Bankr. D.D.C. 1995).
162. Id.
163. Polly, 392 B.R. at 245.
164. Harper-Elder, 184 B.R. at 406–07.
165. 11 U.S.C. § 362(a) reads:
Except as provided in subsection (b) of this section, a petition filed under
section 301, 302, or 303 of this title, or an application filed under section
5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay,
applicable to all entities, of—
(1) the commencement or continuation, including the issuance or employment
of process, of a judicial, administrative, or other action or pro-

314 TEXAS WESLEYAN LAW REVIEW [Vol. 16
tic support, certain medical, tax, or civil proceedings involving domestic
violence, 166 its protection is extremely broad. 167 Congress intended
the automatic stay to be very protective of the debtor’s estate because
it is an important element of the individual debtor’s fresh start, and in
liquidation proceedings, it prevents certain creditors from obtaining
preferential treatment by quick action. 168 The debtor’s protection by
the automatic stay under Code § 362 terminates at the earliest point
that certain property ceases to be property of the estate, the case is
closed, discharge is granted or denied, or the case is dismissed. 169
When the debtor voluntarily dismisses his chapter 13 case under Code
§ 1307(b), he loses protection from the stay under Code § 362. 170 Voluntary
dismissal under Code § 1307(b) effectively subjects the debtor
to the collection proceedings and attempts previously prevented by
the stay. 171 Additionally, Code § 108(c) protects creditors against the
possibility that a debtor can file a chapter 13 petition and voluntarily
dismiss right after the statute of limitations has run on the collection
action. 172 Code § 108(c) tolls the statute of limitations on a civil cause
of action viable on the date of filing until 30 days after the creditor has
been notified that the stay has been terminated by dismissal. 173
ceeding against the debtor that was or could have been commenced
before the commencement of the case under this title, or to recover a
claim against the debtor that arose before the commencement of the
case under this title;
(2) the enforcement, against the debtor or against property of the estate,
of a judgment obtained before the commencement of the case under
this title;
(3) any act to obtain possession of property of the estate or of property
from the estate or to exercise control over property of the estate;
(4) any act to create, perfect, or enforce any lien against property of the
estate;
(5) any act to collect, asses, or recover a claim against the debtor that
arose before the commencement of the case under this title;
(6) any act to collect, assess, or recover a claim against the debtor that
arose before the commencement of the case under this title;
(7) the setoff of any debt owing to the debtor that arose before the commencement
of the case under this title against any claim against the
debtor; and
(8) the commencement or continuation of a proceeding before the United
States Tax Court concerning a corporate debtor’s tax liability for a
taxable period the bankruptcy court may determine or concerning the
tax liability of a debtor who is an individual for a taxable period ending
before the date of the order for relief under this title.
11 U.S.C. § 362(a) (2006).
166. Id. § 362(b).
167. H.R. Rep. No. 95-595, at 174 (1978), reprinted in 1978 U.S.C.C.A.N. 5963,
6135.
168. Id.
169. 11 U.S.C. § 362(c)(1)–(2).
170. In re Harper-Elder, 184 B.R. 403, 407 (Bankr. D.D.C. 1995).
171. Id.
172. Id.
173. Id.

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 315
Therefore, collection actions available at the time of the petition can
be used against the debtor upon his voluntary dismissal under Code
§ 1307(b).
The debtor’s calculated current monthly income and his current
monthly expenses will typically determine the length of the plan he
proposes. Completion of the approved chapter 13 plan or a hardship
under Code § 1328(b) will amount to a discharge of most, if not all
debts. 174 So long as the plan involves a commitment of all of the
debtor’s disposable income to repayment of debts and the unsecured
creditors receive the value of the amount they stood to receive in a
chapter 7 liquidation, the debtor is discharged usually by only having
to pay a ratable amount of the total owed to his creditors. 175 In most
chapter 13 cases, the requirement in Code § 1325(a)(4), that the creditors
receive the value they would receive in a chapter 7 liquidation, is
easy to satisfy because in the typical liquidation, unsecured creditors
receive little, if anything. 176 Therefore, most chapter 13 debtors are in
a position to be discharged without having to pay the exact amount
owed upon commencement of the case. If, however, the chapter 13
case is dismissed before completion of the approved plan, the amounts
owed by the debtor to his creditors are restored to those existing at
the commencement of the case. 177 Basically, everything that has transpired
during the bankruptcy process is undone. 178
As compared to state courts, federal courts with exclusive jurisdiction
to apply the Code have much more power to protect the debtor
from collection efforts of creditors. 179 The only viable state court alternatives
to federal bankruptcy are either an assignment for the benefit
of creditors (ABC) 180 or a receivership, which, like an ABC, is a
turnover of property. 181 In an ABC or receivership, the debtor makes
a voluntary transfer of all of his assets in trust for liquidation and pro
rata distribution to the creditors. 182 ABCs originated from common
law, but are now governed by statute in most states. 183 ABCs are
state law equitable remedies, and accordingly, may not provide for a
discharge of debts because such provisions in ABCs are preempted by
federal law as conflicting with the federal purpose of enacting uniform
174. See 11 U.S.C.A. § 1328 (West 2004 & Supp. 2009). But see 11 U.S.C. § 523
(2006).
175. 11 U.S.C.A. § 1325(a)(4), (b) (West 2004 & Supp. 2009).
176. EPSTEIN, supra note 33, at 379.
177. Harper-Elder, 184 B.R. at 407.
178. Id.
179. See In re Hearn, 18 B.R. 605, 606 (Bankr. D. Neb. 1982) (explaining that if the
debtor has chosen to dismiss his Chapter 13 case, he must be prepared to limit his
rights and remedies to those available in state court).
180. 17 TEX. JUR. 3D Creditors Rights & Remedies § 69 (2009).
181. See, e.g., TEX. CIV. PRAC. & REM. CODE ANN. § 64.001 (Vernon 2008).
182. See TEX. JUR. 3D Creditors Rights & Remedies, supra note 179.
183. Id.

316 TEXAS WESLEYAN LAW REVIEW [Vol. 16
bankruptcy proceedings. 184 The key differences between ABCs and
receiverships, and chapter 13 of the Code are the impossibility of the
debtor to receive a discharge, and that ABCs and receiverships are
purely liquidation proceedings, whereas chapter 13 does not require
liquidation of the debtor’s assets. 185 The debtor has, for the time being,
effectively limited “his rights and remedies to those available in
state court” if he voluntarily dismisses his chapter 13 case. 186
The 2005 BAPCPA changes to the Code brought a specific amendment
to curb the desirability of serial filing of bankruptcy cases and
limit the “revolving door” approach to bankruptcy. 187 Specifically,
Code § 362(c)(3) terminates protection of the automatic stay on the
30th day after filing for a debtor that had, in the preceding year, a case
pending that was subsequently dismissed. 188 In this situation, an interested
party must make a motion to extend the stay and the court must
find that the debtor filed the case in good faith as to the creditors to
be stayed in order for the stay to last beyond the 30 days after filing of
the subsequent petition. 189 A case filed by a debtor less than one year
after his previous case was dismissed will presumptively be viewed as
filed in bad faith. This presumption may only be rebutted by clear and
convincing evidence found in the criteria enumerated under
§ 362(c)(3)(C)(i)(II). 190 If the debtor has two or more cases pending
within the previous year that were dismissed, then no stay goes into
effect. 191 Therefore, a debtor who voluntarily dismisses his case will
experience a heightened burden to receive protection from the stay if
he chooses to re-file his case within the same year. 192 The repeat
debtor, however, will immediately or shortly after filing lose protection
from the stay unless he can come forward with clear and convincing
evidence to show why the stay should be imposed. 193
B. The Bankruptcy Court’s Ability to Dismiss the Debtor’s Case
With Prejudice, Exercise Continuing Control Over Property of the
Estate, Impose Sanctions, and Initiate Criminal Prosecution as
Sufficient Remedies to Prevent Bankruptcy Abuse
Many courts adopting the minority position express concern that if
the debtor has an unconditional right to his case in the face of a pend-
184. MSR Exploration, Ltd. v. Meridian Oil, Inc., 74 F.3d 910, 915 (9th Cir. 1996).
185. See 11 U.S.C.A. §§ 1328, 1306 (West 2004 & Supp. 2009).
186. In re Harper-Elder, 184 B.R. 403, 407 (Bankr. D.D.C. 1995).
187. Robin Miller, Annotation, Validity, Construction, and Application of Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005, 2005 A.L.R. FED. 2D 3
§ 11 (2005).
188. 11 U.S.C.A. § 362(c)(3) (West Supp. 2009).
189. Id. § 362(c)(3)(B).
190. Miller, supra note 186, § 11.
191. Id.
192. See id.
193. Id.

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 317
ing motion to convert, the court will be unable to remedy bankruptcy
abuse. 194 There are, however, several provisions in the Code that give
the court wide discretion to remedy this misconduct. 195 Thus, denying
a debtor’s motion to dismiss under Code § 1307(b) when a motion to
convert under Code § 1307(c) is pending is not the only possible remedy
the court has in protecting creditors against abuse of the bankruptcy
process. 196 Most importantly, the court may dismiss the
chapter 13 case with prejudice to refiling pursuant to Code § 349(a). 197
Code § 349(a) provides, in relevant part, that “unless the court orders
otherwise, the dismissal of a case under this title does not bar the discharge,
in a later case under this title, of debts that were dischargeable
in the case dismissed.” 198 Courts have acknowledged that the “unless
the court orders otherwise” language under Code § 349(a) gives them
considerable latitude in conditioning dismissal under Code § 1307(b)
as well. 199 Conditioning dismissal by using Code § 349(a) is a way in
which courts can prevent the “revolving door to bankruptcy” abuse. 200
Similar to the court’s ability to dismiss the debtor’s case under Code
§ 1307(b) with prejudice, the court also has the express power to exercise
continuing control over property of an estate after the case has
been dismissed. 201 Code § 349(b) provides, in relevant part, that “unless
the court, for cause, orders otherwise, a dismissal of a case . . . (3)
re-vests the property of the estate in the entity in which such property
was vested immediately before commencement of the case under this
title.” 202 Code § 349(b) gives the court the considerable discretion to
exercise continuing control over property of the estate after dismissal
if such control is necessary to protect creditors against the debtor’s
post-dismissal conduct. 203
Dismissal under Code § 1307(b) does not relieve the debtor from
the consequences of his misconduct. 204 Even if the debtor voluntarily
dismisses, the court retains the power to impose sanctions under Federal
Rule of Bankruptcy Procedure Rule 9011. 205 Rule 9011 gives the
court the authority to impose sanctions on motion by an interested
party, or sua sponte if the debtor or debtor’s attorney files a paper to
194. Kirshenbaum Inv. Co. v. Gaudet (In re Gaudet), 132 B.R. 670, 674 (D.R.I.
1991).
195. See In re Polly, 392 B.R. 236, 245 (Bankr. N.D. Tex. 2008) (explaining that
§1307(c) is not the only possible protection against the ill-motivated debtor).
196. Id.
197. Id.
198. 11 U.S.C.A. § 349(a) (2006).
199. Polly, 392 B.R. at 245; In re Greenberg, 200 B.R. 763, 770 (Bankr. S.D.N.Y.
1996).
200. Polly, 392 B.R. at 245.
201. Id.
202. 11 U.S.C. § 349(b).
203. Polly, 392 B.R. at 245.
204. Id. at 246.
205. Id.

318 TEXAS WESLEYAN LAW REVIEW [Vol. 16
the court that is for “any improper purpose, such as to harass or cause
unnecessary delay or needlessly increase the cost of litigation.” 206
This remedy is available to the court if the debtor uses chapter 13
solely to delay or prevent his creditors from proceeding against
him. 207 The court’s imposition of sanctions is an exercise of the
court’s inherent police power to prevent the proscribed conduct described
in rule 9011. 208 The imposition of sanctions after the debtor
has voluntarily dismissed does not impinge on the debtor’s unconditional
right to dismiss under Code § 1307(b). 209 Therefore, the debtor
is not in a position to evade the imposition of sanctions by invoking
his right to dismiss under Code § 1307(b). 210
In addition to the imposition of sanctions under rule 9011, the court
or an interested party may refer the debtor’s conduct to the United
States Attorney’s Office for investigation and potential criminal prosecution.
211 Sections 151–57 of Title 18 provide for criminal prosecution
when a debtor commits bankruptcy fraud. 212 Specifically § 157
provides:
A person who, having devised or intending to devise a scheme or
artifice to defraud and for the purpose of executing or concealing
such scheme or artifice or attempting to do so . . . files a petition
under Title 11 [the Code] . . . shall be fined under this title, imprisoned
not more than 5 years, or both. 213
Section 158 gives bankruptcy courts the duty to establish procedures
for referring cases containing violations under § 157. 214 Title 18
provides a serious tool at the disposal of the bankruptcy court in
preventing debtors from using the bankruptcy process to defraud their
creditors. 215 Like the imposition of sanctions, the court can use the
procedure granted under Title 18 and refer a case of possible bankruptcy
fraud even after the debtor has voluntarily dismissed his
case. 216
206. FED. R. BANKR. P. 9011.
207. See In re Dilley, 125 B.R. 189, 194 (Bankr. N.D. Ohio 1991).
208. In re Harper-Elder, 184 B.R. 403, 406–07 (Bankr. D.D.C. 1995).
209. Id. at 407.
210. Id. But see In re Gaudet, 132 B.R. 670, 676 (D.R.I. 1991).
211. Barbieri v. Raj Acquisition Corp. (In re Barbieri), 199 F.3d 616, 621–22 (2d
Cir. 1999).
212. Id.
213. 18 U.S.C.A. § 157 (West Supp. 2009).
214. 18 U.S.C.A. § 158(d) (West Supp. 2009).
215. See Barbieri, 199 F.3d at 621–22.
216. See id.

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 319
VII. COURTS SHOULD INTERPRET CODE § 1307(b) AS
MANDATORY BECAUSE AS CHAPTER 13 FILINGS HAVE INCREASED
SINCE THE 2005 BAPCPA AMENDMENTS, UNIFORMITY IN
INTERPRETATION THAT COMPORTS WITH THE PLAIN
MEANING OF THE STATUTE IS CRUCIAL
The 2005 BAPCPA addition of the means test operated to push
many debtors from chapter 7 to chapter 13, or out of the bankruptcy
system all together. 217 The idea was that debtors with an income
above the median had some ability to repay their creditors, and
should at least pursue a court-approved plan to do so. 218 The result
would be a drop in “can-pay abusers” of the bankruptcy system and a
greater return to creditors. 219 The proportion of chapter 13 filings in
fact increased along with the total number of bankruptcy filings. 220 In
2008, bankruptcy filings increased 29 percent from the previous year,
up to nearly 1 million and are expected to exceed that number this
year. 221 With bankruptcy filings to be at an expected 1.2 million, 222 it
is crucial that courts interpret Code § 1307(b) as an unconditional
right, even in the event of a pending motion to convert, because doing
so will produce certainty in this right and encourage willing debtors to
repay their creditors under a chapter 13 plan.
A. Since the 2005 BAPCPA Amendments, and Most Noticeably in
2008, Chapter 13 Filings Have Substantially Increased
The means test, ushered in by BAPCPA, effectively forced debtors
with above-median incomes out of chapter 7 and in to chapter 13, or
out of the bankruptcy system. 223 Congress intended for the means test
to push the debtors that could pay out of chapter 7 and into chapter
13. 224 As intended, application of the means test in fact caused a pronounced
change in the distribution of chapter 7 and chapter 13
cases. 225 Pre-BAPCPA chapter 7 filings made up 71 percent of all
consumer bankruptcy filings, decreasing to only 57 percent in the first
year after the BAPCPA amendments became effective. 226 In the same
period, chapter 13 filings increased from 29 percent to 42 percent of
all filings. 227
217. See Lawless, supra note 20, at 352–53.
218. Id. at 352.
219. Id.
220. See Flynn & Crewson, supra note 2, at 65; Ben Rooney, Bankruptcy Filings
Surge to 1 Million- Up 29%, CNN Money.com, Aug. 27, 2008, http://www.money.cnn.
com/2008/08/27/news/economy/bankruptcy.
221. Rooney, supra note 219.
222. Id.
223. Lawless, supra note 20, at 356.
224. Id. at 357.
225. Flynn & Crewson, supra note 2, at 65.
226. Id.
227. Id.

320 TEXAS WESLEYAN LAW REVIEW [Vol. 16
All throughout the 2000s, American families have experienced increasing
economic pressure as median incomes have declined and basic
expenses have risen. 228 Defaults on credit cards and car loans, as
well as mortgage foreclosures, have soared since 2000. 229 These facts
have resulted in bankruptcy filings surging to nearly one million in the
past year ending June 30, 2008. 230 During this period, total bankruptcy
filings increased by 29 percent, while chapter 13 filings alone
increased by 17 percent. 231 With the economy spiraling downward,
particularly due to the subprime mortgage crisis, scholars at the
American Bankruptcy Institute expect filings to reach 1.2 million in
2009. 232
B. Interpreting Code § 1307(b) as Discretionary When There is a
Code § 1307(c) Motion Pending Will Increase Bankruptcy Litigation,
and Possibly Deter Otherwise Willing Debtors
With consumer bankruptcies expected to exceed 1 million in 2009, it
is especially important for courts to give effect to the plain meaning of
statutes when possible. This practice will make the bankruptcy process
more predictable and efficient for the debtor. If Code § 1307(b)
is given mandatory effect, even in a situation where there is a pending
motion under Code § 1307(c), there will be no uncertainty for the
debtor about his right to opt out, and less possible litigation. The
debtor will not have to worry about being forced into a chapter 7 liquidation
in the course of his voluntary chapter 13 proceeding if he
knows he can voluntarily dismiss his case at any point. If the debtor
knows he is free to opt out at any point, he is more likely to file a
chapter 13 petition and work to pay his creditors over time, which is a
preferable solution to the creditors as well. 233 Because chapter 13 allows
a debtor with some form of income to retain his assets, including
those encumbered by a lien, 234 it is usually the best option for the
insolvent debtor. Also, if courts uniformly adopt the majority position,
litigation will not be necessary to resolve competing motions
under Code sections 1307(b) and (c). With fewer issues proceeding to
litigation, the perspective cost of chapter 13 bankruptcy is less likely to
discourage the willing debtor. 235 In the interest of curbing home fore-
228. Lawless, supra note 20, at 349.
229. Id. at 350.
230. Rooney, supra note 219.
231. Id.
232. Id.
233. S. REP. No. 5-989, at 12 (1978), reprinted in 1978 U.S.C.C.A.N. 787, 5798.
234. 11 U.S.C.A. §§ 1322, 1325 (West 2004 & Supp. 2009).
235. See generally William F. Stone, Jr., & Bryan A. Stark, The Treatment of Attorneys’
Fee Retainers in Chapter 7 Bankruptcy and the Problem of Denying Compensation
to Debtors’ Attorneys for Post-Petition Legal Services They Are Obliged to
Render, 82 AM. BANKR. L.J. 551, 581–82 (2008) (discussing consumer debtors’ attorneys’
ability to bill for post-petition legal services; namely, litigating contested
matters).

2010] DISMISSAL OF A BANKRUPTCY CH. 13 FILING 321
closures, repossessions, and loss of valuable assets and at the same
time maximizing the return to creditors through the bankruptcy process,
courts should interpret Code § 1307(b) as an unconditional right
for the debtor so as to encourage chapter 13 filings over chapter 7
filings, and decrease the amount of litigation.
VIII. CONCLUSION
The plain meaning doctrine and Supreme Court interpretation of
the word “shall” is a strong indication to courts that Code § 1307(b)
leaves no room for discretion, even when there is a pending motion to
convert under § 1307(c). The interpretation of Code § 1307(b), that
the debtor is free to opt out whenever he chooses, is consistent with
Congress’s intent that chapter 13 be completely voluntary. The concern
expressed by some courts that an unconditional right to dismiss
will deprive the court of its inherent power and lead to abuse is misplaced.
The debtor does not necessarily put himself in a more preferable
position by voluntarily dismissing his chapter 13 case.
Additionally, bankruptcy courts have codified remedies to punish
abuses by the ill-motivated debtor other than denying the debtor’s
motion to dismiss. Finally, as bankruptcy filings increase to unprecedented
numbers, it is vitally important to minimize the increasing rate
at which homes are foreclosed upon, property is repossessed, and assets
are seized, and at the same time, put creditors in a position at
which their recovery is maximized through the bankruptcy process. In
light of these factors, courts should strongly consider adopting the majority
position articulated in Polly, that “upon request by the debtor at
any time, the court shall dismiss,” even if there is a pending motion to
convert the case to one under chapter 7.

ARTICLES
HANDLING CAPITAL CASES
DEALING WITH THE MEDIA
By:
Judge Sharen Wilson
Judge Cynthia Stevens Kent
I. INTRODUCTION
Perhaps all that needs to be said on the issue of media and trials is
People v. O.J. Simpson. The lessons of that trial are obvious. The trial
judge is directly and personally responsible for maintaining the dignity
and decorum of the courtroom proceedings. The media’s interests do
not involve issues of fair trial and due process. Rather, the media’s
interests involve issues of public information, ratings, and financial
benefits from coverage of a particular trial. Further, when dealing
with media coverage, the attorney should determine how media coverage
might affect the resolution of the client’s case and how he or she
can appropriately deal with a capital case so as to protect the client
and the integrity of our system of justice. Also, the trial judge must be
aggressively involved in media management to ensure the defendant’s
Constitutional right to a fair trial and the societal right to justice in a
properly conducted trial.
A review of some of the issues that often arise when dealing with a
capital case will help prepare the judiciary for a capital case with intense
media focus:
1. What are the legal guidelines in the area of free press and fair
trial interests?
2. What are some of the pitfalls of the capital trial and what planning
should the justice system take to appropriately address
those concerns?
The trial judge is in charge of the courtroom and determines the
extent of courtroom access to cameras and recording devices. However,
the law dictates public trials. Whether or not a judge decides to
allow media the opportunity to have cameras and recording devices in
the courtroom is the individual decision of the trial judge in most jurisdictions.
In a capital case, the media’s demands for access may be
intense and the trial judge should understand the options, benefits,
and pitfalls of media and capital case management.
Much of the legal focus on the First Amendment v. Sixth Amendment
battle has been in the criminal law field. Judges can begin their
preparation for the capital trial by studying not only the case law, but
also the guidelines from their state court rules for practice regarding
media coverage of trial proceedings. Judges should review the state
159

160 TEXAS WESLEYAN LAW REVIEW [Vol. 16
constitution and case law for guidance on pretrial and trial management
issues for the capital case. Development of a trial-court checklist
for media-intense cases can assist the trial judge. Judges should
also consider security and press management issues.
II. THE LAW/LEGAL ISSUES IN CAPITAL CASES
The first question a trial judge must answer is what does the law
require, prohibit, and leave to the trial judge’s decision in media management
of a case. Each state has some provision of law or rule that
gives some guidelines for media management.
A. Cameras in the Courtroom
In his article Mass Media’s Impact on Litigation: A Judge’s Perspective,
Judge John F. Onion related a trial (Hauptmann) in which the
Judge allowed still photography in the courtroom. 1 There were about
700 reporters and 132 photographers in the courtroom during the trial.
The media had agreed to not show newsreels until after the trial, but
during the trial they published and showed newsreels. Following this
trial, the American Bar Association adopted Canon 35 of the Code of
Judicial Conduct which made it unethical for a judge to allow broadcasting
or still photography of courtroom proceedings.
1. Case Law
The trial of Estes v. Texas 2 demonstrated the problems that could
occur with television coverage of a trial. During this trial, the television
crews constructed a television booth in the courtroom, requiring
cables to be snaked throughout the courtroom. 3 As a result, the defendant
appealed his conviction claiming a denial of due process. 4
The Supreme Court reversed the conviction stating that the defendant’s
due process rights were violated and that the defendant did not
have to show actual prejudice in order to obtain a reversal. 5 Essentially,
the Supreme Court banned cameras in the courtroom except for
ceremonial purposes. 6 This was the first Supreme Court decision addressing
the issue of in-court broadcasting, but the numerous concurring
and dissenting opinions in the plurality decision left the
guidelines and full impact of this decision unclear. 7
1. See Hon. John F. Onion, Jr., Former Presiding Judge, Texas Court of Criminal
Appeals, Address at The Review of Litigation Symposium: Mass Media’s Impact on
Litigation, Lawyers, and Judges (Feb. 24, 1995), in 14 REV. LITIG. 585, 589 (1995).
2. See Estes v. Texas, 381 U.S. 532 (1965).
3. See id. at 536, 551.
4. See id. at 534–35.
5. Id. at 542, 552.
6. See id. at 550.
7. See id. at 552, 587, 596, 601, 615, 617.

2010] CAPITAL CASES AND THE MEDIA 161
In the Court’s opinion, Justice Clark listed several ways in which
broadcasting trial proceedings could influence jurors:
1. Pretrial announcements of the intention to televise the trial
could affect potential jurors;
2. Awareness of the camera’s presence could distract the jury from
the evidence;
3. Non-sequestered juries could be affected by the interpretation of
the trial by the media coverage; and
4. Any retrial could be in jeopardy due to jurors’ exposure to clips
from the first trial. 8
Further, Justice Clark expressed concern about the effect of the
cameras on the witnesses and their discomfort at testifying not only
before the judge and jury, but also before the entire viewing television
audience. 9 He also expressed concern over the effect of broadcasting
on invocation of the rule of witnesses, as well as a fear that individuals
with evidence would not come forward for fear of becoming famous
overnight. 10 The burdening of the trial judge with the additional responsibility
of supervising the cameras and the conduct of the reporters,
as well as concerns about the judge and lawyers “playing” to the
cameras, were also raised as problems with televised trials. 11
And finally, Justice Clark was concerned about the harm to the defendant
in the form of mental harassment in having a trial televised
and the possible creation of community bias. 12 Justice Clark directly
held the trial judge responsible for the protection of the individual’s
rights to a fair trial by an independent court system under the rule of
law. 13
The trial of Sheppard v. Maxwell 14 was another case where the trial
judge permitted cameras in the courtroom. 15 The situation was described
as “bedlam reigned at the courthouse.” 16 One observer went
so far as to say, “People were standing on the counsel table taking
photographs, defense counsel could not confer with his client without
being overheard, exhibits were picked up and taken out—it was
unbelievable.” 17
Although the United States Supreme Court maintains its prohibition
of any broadcasting from its proceedings, in Chandler v. Florida 18
the court unanimously held that permitting radio, television, and pho-
8. See id. at 545–46.
9. See id. at 547.
10. See id.
11. See id. at 548.
12. See id. at 549
13. See id. at 548.
14. Sheppard v. Maxwell, 384 U.S. 333 (1966).
15. See id. at 343, 347.
16. Id. at 355.
17. Onion, supra note 1, at 592.
18. Chandler v. Florida, 449 U.S. 560 (1981).

162 TEXAS WESLEYAN LAW REVIEW [Vol. 16
tographic coverage of criminal proceedings over the defendant’s objections
was constitutional absent a showing of abuse or actual
prejudice. 19 The Court did not find it necessary to overrule Estes, explaining
that the prior decision was not a majority opinion and did not
establish a per se rule against televising criminal trials. 20
Justice Clark also clarified the court’s holding in Estes stating:
It is said . . . that the freedoms granted in the First Amendment
extend a right to the news media to televise from the courtroom,
and that to refuse to honor this privilege is to discriminate between
the newspapers and television. This is a misconception of the rights
of the press. 21
Thus, clearly the press does not have a First Amendment right of access
to broadcast court proceedings. This decision has been challenged
repeatedly but the Court has consistently held that the First
Amendment protection of a free press does not require unlimited access
to televise from the courtroom. 22
In the Chandler decision, the Court held that broadcasting is not
inherently prejudicial; rather, due to technological improvements, it is
rarely prejudicial. 23 In fact, the Court found that camera coverage of
a trial, when properly structured, does not create a significant adverse
effect on the participants in the trial. 24 The Court stated that to show
a legally sufficient claim of denial of due process caused by broadcast
coverage of a trial, the complaining party must meet a high standard
by demonstrating either: (1) that the coverage compromised the ability
of the jury to judge fairly, or (2) the coverage had an adverse impact
on the trial participants sufficient to constitute a denial of due
process. 25
Thus, the Chandler court not only held that broadcast coverage was
not presumptively unconstitutional or inherently prejudicial; it also reiterated
the holding that a media organization does not have a First
Amendment right to broadcast court proceedings. 26 Further, the
court held that a defendant does not have a Sixth Amendment right to
a publicly broadcasted trial. 27 Rather, the Court decided that the trial
court had the discretion as to whether or not to allow in-court broad-
19. See id.
20. See id. at 570–73.
21. Estes v. Texas, 381 U.S. 532, 539 (1965).
22. See Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 610 (1978) (stating that
“there is no constitutional right to have . . . testimony recorded and broadcast”) (citing
Estes, 381 U.S. at 539–42).
23. See Chandler, 449 U.S. at 576.
24. See id. at 577.
25. Id. at 581.
26. See id. at 569.
27. See id.

2010] CAPITAL CASES AND THE MEDIA 163
casting after balancing the procedure for such broadcasting and the
fundamental right to a fair trial. 28
Most state courts now allow for the broadcast of court proceedings
under the discretion of the trial court with a total of forty-seven states
now permitting broadcast coverage and only three states prohibiting
broadcast coverage altogether. 29
2. Rules
The Mississippi Supreme Court’s Rules for Electronic and Photographic
Coverage of Judicial Proceedings (MREPC) allows electronic
media coverage of public proceedings in appellate and trial courts
subject to certain conditions. 30 The presiding judge has discretion to
limit or terminate coverage at any time to control the proceedings and
protect the interests of justice by protecting the rights of parties and
witnesses and preserving the dignity of the court. 31 Media coverage is
expressly prohibited in matters such as divorce, child custody, adoption,
domestic abuse, motions to suppress evidence, proceedings involving
trade secrets, and other specified matters. 32 In contrast to the
Mississippi Rules that allow recording except under certain circumstances,
the California Rules of Court permit media coverage only by
written order of the judge. 33 Photographing, recording, and broadcasting
are prohibited unless the conditions of the rules are met and
the judge, in his discretion, permits such coverage. 34
Canon 3 of the Louisiana Code of Judicial Conduct requires a judge
to “prohibit broadcasting, televising, recording, or taking photographs
in the courtroom and areas immediately adjacent thereto at least during
sessions of court or recesses between sessions.” 35
Canon 3 further states:
A trial judge may authorize:
(a) the use of electronic or photographic means for the presentation
of evidence, for the perpetuation of a record for the
court or for counsel, or for other purposes of judicial
administration;
28. See id. at 566.
29. Todd Piccus, Demystifying the Least Understood Branch: Opening the Supreme
Court to Broadcast Media, 71 TEX. L. REV. 1053, 1064 (1993).
30. MISS. R. FOR ELEC. & PHOTOGRAPHIC COVERAGE OF JUDICIAL PROCEEDINGS
1, available at http://www.mssc.state.ms.us/rules/msrulesofcourt/rules_electronicphotographic_coverage.pdf
(last visited Oct. 23, 2009).
31. Id. R. 3.
32. Id. R. 3(c).
33. CAL. R. OF CT. 1.150(e), available at http://www.courtinfo.ca.gov/rules/documents/pdfFiles/title_1.pdf
(Oct. 23, 2009).
34. Id.
35. LA. CODE OF JUDICIAL CONDUCT Canon 3(A)(9) (2009), available at http://
www.lasc.org/rules/supreme/cjc.asp (last visited Oct. 23, 2009).

164 TEXAS WESLEYAN LAW REVIEW [Vol. 16
(b) the broadcasting, televising, recording or photographing of
investitive or ceremonial proceedings;
(c) the photographic or electronic recording and reproduction of
appropriate court proceedings under the following conditions:
(i) the means of recording will not distract participants or
impair the dignity of the proceedings;
(ii) the parties have consented, and the consent to being
depicted or recorded has been obtained from each witness
appearing in the recording and reproduction;
(iii) the reproduction will not be exhibited until after the
proceeding has been concluded and all direct appeals
have been exhausted; and
(iv) the reproduction will be exhibited only for instructional
purposes in educational institutions.
An appellate court may permit broadcasting, televising, recording,
and taking photographs of public judicial proceedings in the courtrooms
of appellate courts in accordance with the guidelines set forth
in an appendix to this Canon, subject, however, to the authority of
each court and the presiding judge of each court or panel to (a)
control the conduct of proceedings before the court, (b) ensure decorum
and prevent distractions, and (c) ensure the fair administration
of justice in the pending cause. 36
However, the Louisiana Revised Statutes Title 13 § 4164 seems to
broaden the Canon to allow televising of proceedings when all parties
agree and the judge approves:
Unless otherwise provided by rule promulgated by the supreme
court to allow a pilot project in a city court, a proceeding in court
may be televised or recorded by television equipment in accordance
with the terms of a motion and stipulation agreed to by all parties to
the proceeding and approved by the judge hearing the matter. 37
The seeming contradiction of the statute and the canon was resolved
when the Supreme Court of Louisiana held that “[t]here is not
necessarily a conflict between the statute . . . and the Canons of Judicial
Ethics . . . as long as the trial judge in exercising his authority
under the statute complies with the requirement of the Canons.” 38
In an Arkansas court a judge may authorize broadcasting, recording,
or photographing in the courtroom and areas immediately adjacent
thereto—during sessions of court, recesses between sessions, and
on other occasions—provided that the participants will not be distracted,
nor will the dignity of the proceedings be impaired. The rule
sets out the following exceptions:
36. Id. Canon 3(A)(9)(a)–(c).
37. LA. REV. STAT. ANN. § 31:4164(C) (2006).
38. Fitzmorris v. Lambert, 377 So. 2d 65, 66 (La. 1979).

2010] CAPITAL CASES AND THE MEDIA 165
(1) An objection timely made by a party or an attorney shall preclude
broadcasting, recording, or photographing of the
proceedings;
(2) The court shall inform witnesses of their right to refuse to be
broadcast, recorded, or photographed, and an objection timely
made by a witness shall preclude broadcasting, recording or
photographing of that witness;
(3) All juvenile matters in circuit court as well as hearings in probate
and domestic relations matters in circuit court, e.g., adoptions,
guardianships, divorce, custody, support, and paternity,
shall not be subject to broadcasting, recording, or
photographing;
(4) In camera proceedings shall not be broadcast, recorded, or photographed
except with consent of the court;
(5) Jurors, minors without parental or guardian consent, victims in
cases involving sexual offenses, and undercover police agents or
informants shall not be broadcast, recorded, or photographed. 39
In Georgia, the statute reads as follows:
Unless otherwise provided by rule of the Supreme Court or otherwise
ordered by the assigned judge after appropriate hearing (conducted
after notice to all parties and counsel of record) and
findings, representatives of the print and electronic public media
may be present at and unobtrusively make written notes and
sketches pertaining to any judicial proceedings in the superior
courts. However, due to the distractive nature of electronic or photographic
equipment, representatives of the public media utilizing
such equipment are subject to the following restrictions and
conditions:
(A) Persons desiring to broadcast/record/photograph official
court proceedings must file a timely written request . . . with
the judge involved prior to the hearing or trial, specifying the
particular calendar/case or proceedings for which such coverage
is intended; the type equipment to be used in the courtroom;
the trial, hearing or proceeding to be covered; and the
person responsible for installation and operation of such
equipment.
(B) Approval of the judge to broadcast/record/photograph a proceeding,
if granted, shall be granted without partiality or
preference to any person, news agency, or type of electronic
or photographic coverage, who agrees to abide by and conform
to these rules, up to the capacity of the space designated
therefor in the courtroom. Violation of these rules will
be grounds for a reporter/technician to be removed or excluded
from the courtroom and held in contempt.
(C) The judge may exercise discretion and require pooled coverage
which would allow only one still photographer, one television
camera and attendant, and one radio or tape recorder
39. ARK. SUP. CT. ADMIN. ORDER NO. 6(c).

166 TEXAS WESLEYAN LAW REVIEW [Vol. 16
outlet and attendant. Photographers, electronic reporters
and technicians shall be expected to arrange among themselves
pooled coverage if so directed by the judge and to present
the judge with a schedule and description of the pooled
coverage. If the covering persons cannot agree on such a
schedule or arrangement, the schedule and arrangements for
pooled coverage may be designated at the judge’s discretion.
(D) The positioning and removal of cameras and electronic devices
shall be done quietly and, if possible, before or after
the court session or during recesses; in no event shall such
disturb the proceedings of the court. In every such case,
equipment should be in place and ready to operate before
the time court is scheduled to be called to order.
(E) Overhead lights in the courtroom shall be switched on and
off only by court personnel. No other lights, flashbulbs,
flashes or sudden light changes may be used unless the judge
approves beforehand.
(F) No adjustment of central audio system shall be made except
by persons authorized by the judge. Audio recordings of the
court proceedings will be from one source, normally by connection
to the court’s central audio system. Upon prior approval
of the court, other microphones may be added in an
unobtrusive manner to the court’s public address system.
(G) All television cameras, still cameras and tape recorders shall
be assigned to a specific portion of the public area of the
courtroom or specially designed access areas, and such
equipment will not be permitted to be removed or relocated
during the court proceedings.
(H) Still cameras must have quiet functioning shutters and advancers.
Movie and television cameras and broadcasting and
recording devices must be quiet running. If any equipment is
determined by the judge to be of such noise as to be distractive
to the court proceedings, then such equipment can be
excluded from the courtroom by the judge.
(I) Pictures of the jury, whether by still, movie, or television
cameras, shall not be taken except where the jury happens to
be in the background of other topics being photographed.
Audio recordings of the jury foreperson’s announcement of
the verdict, statements or questions to the judge may be
made. Photographs and televising of the public and the
courtroom are allowed, if done without disruption to the
court proceedings.
(J) Reporters, photographers, and technicians must have and
produce upon request of court officials credentials identifying
them and the media company for which they work.
(K) Court proceedings shall not be interrupted by a reporter or
technician with a technical or an equipment problem.
(L) Reporters, photographers, and technicians should do everything
possible to avoid attracting attention to themselves.
Reporters, photographers, and technicians will be accorded

2010] CAPITAL CASES AND THE MEDIA 167
full right of access to court proceedings for obtaining public
information within the requirements of due process of law,
so long as it is done without detracting from the dignity and
decorum of the court.
(M) Other than as permitted by these rules and guidelines, there
will be no photographing, radio or television broadcasting,
including videotaping pertaining to any judicial proceedings
on the courthouse floor where the trial, hearing or proceeding
is being held or any other courthouse floor whereon is
located a superior court courtroom, whether or not the court
is actually in session.
(N) No interviews pertaining to a particular judicial proceeding
will be conducted in the courtroom except with the permission
of the judge.
(O) All media plans heretofore approved by the Supreme Court
for superior courts are hereby repealed.
(P) A request for installation and use of electronic recording,
transmission, videotaping or motion picture or still photography
of any judicial proceeding shall be evaluated pursuant to
the standards set forth in OCGA § 15–1–10.1. 40
The Kansas Supreme Court’s Rule 1001 reads as follows:
The news media and educational television stations may photograph
and record public proceedings before the Appellate, District and
Municipal Courts of this state in accordance with the following applicable
conditions and procedures and with such other conditions
and procedures as may be required from time to time by the Supreme
Court:
(1) The privilege granted by this rule to photograph and record
court proceedings may be exercised only by the news media
and educational television stations. Film, videotape, photography,
and audio reproductions shall be used for the purpose
of education or news dissemination only.
(2) The privilege granted by the rule does not limit or restrict
the power, authority or responsibility of the judge to control
the proceedings before the judge. The authority of the judge
to exclude the media or the public at a proceeding or during
the testimony of a witness extends to any person engaging in
the privilege authorized by this rule.
(3) Audio pickup and audio recording of a conference between
an attorney and client, co-counsel, opposing counsel or attorneys
and the judge are prohibited regardless of where
conducted. Photographing of such conferences is not prohibited.
(4) Focusing on and photographing of materials on counsel tables
are prohibited.
40. GA. UNIF. R. OF THE SUPERIOR CT. 22, available at http://www.georgiacourts.
org/courts/superior/rules/rule_22.html (last visited Oct. 23, 2009).

168 TEXAS WESLEYAN LAW REVIEW [Vol. 16
(5) Individual jurors shall not be photographed. In courtrooms
where photography is impossible without including the jury
as part of the unavoidable background, the photography is
permitted, but close-ups which identify individual jurors are
prohibited.
(6) As a matter of discretion, the judge may prohibit the audio
recording and the photographing of a participant in a court
proceeding.
(7) The trial judge shall prohibit the audio recording and
photographing of a participant in a court proceeding if the
participant so requests and (a) the participant is a victim or
witness of a crime, a police informant, an undercover agent
or a relocated witness or juvenile, or (b) the hearing is an
evidentiary suppression hearing, a divorce proceeding or a
case involving trade secrets. Notwithstanding the foregoing
and subject to condition 6, the news media may record and
photograph a juvenile who is being prosecuted as an adult in
a criminal proceeding as authorized by K.S.A. 38-1636.
(8) No film, videotape, photograph, or audio reproduction of a
court proceeding made by the media shall affect the official
court record of the proceeding for purposes of appeal or
otherwise.
(9) The administrative judge shall designate a media coordinator
who shall work with the administrative judge, the trial
judge and the media in implementing this rule in the District
Court.
(10) The judge shall be given at least one week’s notice of the
intention of the media to bring cameras or recording equipment
into the courtroom. The judge may waive this requirement
upon a showing of good cause, but is not obligated to
do so.
(11) Members of the media shall not record interviews for broadcast
in the hallways immediately adjacent to the entrances to
the courtroom if passageways are blocked or judicial proceedings
are disturbed thereby. Photographing through the
windows or open doors of the courtroom is prohibited. Prior
to rendition of the verdict, criminal defendants shall not be
photographed in restraints as they are being escorted to or
from court proceedings.
(12) The judge may ban cameras from the entire floor on which a
proceeding is conducted.
(13) Requests to photograph or record District Court proceedings
shall be directed to the media coordinator. When more
than one television station, still photographer or audio recorder
desires to cover a court proceeding, the media coordinator
shall designate the pool photographer and audio
recorder. If there is a dispute as to the pool designation or
the equipment to be used, no audio or visual equipment
shall be permitted at the proceeding. Requests for copies of
audio recordings, video tape or photographs shall be di-

2010] CAPITAL CASES AND THE MEDIA 169
rected to the pool representatives only who shall supply copies
upon request to media representatives at a price not
exceeding actual cost.
(14) The trial judge shall designate the location in the courtroom
for the electronic and photographic equipment and operators.
Under the general supervision of the Chief Justice, the
Clerk of the Appellate Courts shall supervise the location of
media equipment, and personnel using the equipment,
within the Supreme Court courtroom. The presiding judge
of the Court of Appeals panel shall supervise the location of
media equipment, and personnel using the equipment, at
hearings before the Court of Appeals. Equipment and operators
ordinarily should be restricted to areas open to the
public. The equipment and operators, however, shall not impede
the view of persons seated in the public area of the
courtroom. Operators shall occupy only the area authorized
by the judge and shall not move about the courtroom for
picture taking purposes during the court proceeding.
(15) Media equipment shall not be placed within or removed
from the courtroom except prior to commencement or after
adjournment of proceedings each day, or during a recess.
Television film magazines, still camera film and lenses, and
audio cassettes shall not be changed within the courtroom
except during a recess. A still camera photographer may
leave the courtroom with the photographer’s still cameras,
but may not return for additional photographs except during
a recess.
(16) One television camera, operated by one person, and one still
photographer, using not more than two cameras, are authorized
in any court proceeding. The judge may authorize additional
cameras or persons at the request of the media
coordinator. Automatic film advance devices for still cameras
shall not be used in the courtroom. If the still camera is
not manufactured for silent operation, use of a quieting device
is recommended. The court has the discretion to restrict
operation of still cameras which emit distracting sounds during
court proceedings.
(17) One audio system for radio broadcast purposes is authorized
in any court proceeding. Audio pickup for all media purposes
shall be made through an existing audio system in the
court facility. If no suitable audio system exists in the court
facility, microphones and related wiring shall be
unobtrusive.
(18) Only audio or visual equipment which does not produce distracting
light or sound may be used to cover a court proceeding.
Artificial lighting devices shall not be used in
connection with any audio or visual equipment. Modifications
in the lighting of a district court facility may be made

170 TEXAS WESLEYAN LAW REVIEW [Vol. 16
only with the approval of the administrative judge. Approval
of other authorities also may be required. 41
The Ohio Supreme Court’s Rule 12 sets the Conditions for Broadcasting
and Photographing Court Proceedings. 42 It states that:
[t]he judge assigned to the trial or hearing shall permit the broadcasting
or recording by electronic means and the taking of photographs
in court proceedings that are open to the public as provided
by Ohio law. After consultation with the media, the judge shall
specify the place or places in the courtroom where the operators
and equipment are to be positioned. Requests for permission for the
broadcasting, televising, recording, or taking of photographs in the
courtroom shall be in writing and the written order of the judge
shall be made a part of the record of the proceedings. 43
The rule sets out the following limitations:
(1) There shall be no audio pickup or broadcast of conferences conducted
in a court facility between attorneys and clients or cocounsel
or of conferences conducted at the bench between
counsel and the judge.
(2) The judge shall inform victims and witnesses of their right to
object to being filmed, videotaped, recorded, or photographed.
(3) This rule shall not be construed to grant media representatives
any greater rights than permitted by law.
(4) Media representatives shall not be permitted to transmit or record
anything other than the court proceedings from the courtroom
while the court is in session. 44
In an Oregon court “there shall be no public access coverage of the
following”:
(1) Proceedings in chambers.
(2) Any notes or conversations intended to be private including,
but not limited to, counsel and judges at the bench and conferences
involving counsel and their clients.
(3) Dissolution, juvenile, paternity, adoption, custody, visitation,
support, mental commitment, trade secrets, and abuse, restraining
and stalking order proceedings.
(4) At a victim’s request, sex offense proceedings.
(5) Voir dire.
(6) Any juror anywhere during the course of the trial in which he or
she sits.
(7) Recesses. 45
41. KAN. SUP. CT. R. 1001, available at http://www.kscourts.org/rules/Rule-Info.
asp?r1=Media+Coverage+of+Judicial+Proceedings&r2=318 (last visited Oct. 23,
2009).
42. OHIO SUP. R. 12, available at http://www.sconet.state.oh.us/LegalResources/
Rules/superintendence/Superintendence.pdf (last visited Oct. 23, 2009).
43. Id. R. 12(A).
44. Id. R. 12(C).
45. OR. UNIF. TRIAL CT. R. 3.180(2), available at http://www.ojd.state.or.us/
programs/utcr/documents/2008UTCR_ch3.pdf (last visited Oct. 23, 2009).

2010] CAPITAL CASES AND THE MEDIA 171
In a South Carolina court:
(i) [R]epresentatives of the media may use video, still cameras or
recorders to cover proceedings in the courts.
(ii) Media representatives must give reasonable notice to the presiding
judge of a request to cover a proceeding. . . . In the absence
of reasonable notice, the presiding judge may refuse to
permit media coverage, after giving due regard for the public
educational benefits flowing from the photographing and recording
of court proceedings.
(iii) The presiding judge may refuse, limit, or terminate media coverage
of an entire case, portions thereof, or testimony of particular
witnesses as may be required in the interests of justice. 46
The following limitations apply:
(i) Coverage of proceedings which are otherwise closed to the
public is prohibited.
(ii) There shall be no audio pickup or broadcast of conferences
which occur in a court facility between attorneys and their clients,
between co-counsel of a client, between adverse counsel
or between counsel and the presiding judge.
(iii) The members of the jury may not be photographed except
when they happen to be in the background of other subjects
being photographed. Camera and audio coverage of prospective
jurors during selection is prohibited. 47
In a Washington court:
(a) Video and audio recording and still photography by the news
media are allowed in the courtroom during and between sessions,
provided
(1) that permission shall have first been expressly granted by
the judge; and
(2) that media personnel not, by their appearance or conduct,
distract participants in the proceedings or otherwise adversely
affect the dignity and fairness of the proceedings.
(b) The judge shall exercise reasonable discretion in prescribing
conditions and limitations with which media personnel shall
comply.
(c) If the judge finds that sufficient reasons exist to warrant limitations
on courtroom photography or recording, the judge shall
make particularized findings on the record at the time of announcing
the limitations. This may be done either orally or in a
written order. In determining what, if any, limitations should be
imposed, the judge shall be guided by the following principles:
(1) Open access is presumed; limitations on access must be supported
by reasons found by the judge to be sufficiently compelling
to outweigh that presumption;
46. S.C. APP. CT. R. 605(f)(1)(i)–(iii), available at http://www.sccourts.org/court
Reg/displayRule.cfm?ruleID=605.0&subRuleID=&ruleType=APP (last visited Oct.
23, 2009).
47. Id. R. 605(f)(2)(i)–(iii).

172 TEXAS WESLEYAN LAW REVIEW [Vol. 16
(2) Prior to imposing any limitations on courtroom photography
or recording, the judge shall, upon request, hear from
any party and from any other person or entity deemed appropriate
by the judge; and
(3) Any reasons found sufficient to support limitations on
courtroom photography or recording shall relate to the specific
circumstances of the case before the court rather than
reflecting merely generalized views. 48
3. Enforcement
The court may sanction a violation of its rules by measures that include
barring a person or organization from access to future coverage
of proceedings in that court for a defined period or contempt
sanctions.
B. Closing the Courtroom
There are very few cases where the closing of court proceedings has
been allowed, and the overwhelming case law provides that court proceedings
are public and cannot be closed. Recently, the judge in the
Martha Stewart criminal case tried closing the jury voir dire. The
Judge’s decision was vigorously challenged by the media and the appellate
court ruled that such closure was improper. 49
As a general rule, all court proceedings should be open to the public.
Most states provide for open courts. It is the best rule of thumb
that all proceedings in a case will be held in open court and on the
record. There are some situations where statute or case law allows for
the court proceedings to be closed. Examples of proceedings that may
be closed to the public include certain juvenile proceedings and
mental commitment hearings. Closing criminal proceedings should be
carefully considered in light of the requirements for public trial.
Criminal cases generally protect the right to public and open proceedings.
If any portion of a criminal hearing is closed, the judge should
(1) make extensive findings and (2) generally think twice or maybe
fifteen times, before closing the proceedings.
In Texas, a four-part test is utilized for determining whether the
right to a public trial has been violated: (1) the party seeking to close
the hearing must advance an overriding interest that is likely to be
prejudiced; (2) the closure must be no broader than necessary to protect
that interest; (3) the court must consider reasonable alternatives;
and (4) the court must make findings adequate to support its action. 50
48. WASH. STATE GEN. CT. R. 16(a)–(c), available at http://www.courts.wa.gov/
court_rules/?fa=court_rules.display&group=ga&set=GR&ruleid=gagr16 (last visited
Oct. 23, 2009).
49. See ABC, Inc. v. Stewart, 360 F.3d 90 104–05 (2d Cir. 2004).
50. Johnson v. State, 137 S.W.3d 777, 778 (Tex. App.—Waco 2004, pet. ref’d).

2010] CAPITAL CASES AND THE MEDIA 173
If a Texas court, on its own motion or the motion of either party, is
considering allowing broadcasting of the court proceedings, a hearing
on such decision is recommended in civil matters and might be considered
even in a criminal case. The court can certainly consider evidence
and argument of the parties on how the broadcasting of these
proceedings may affect the rights of the parties, or the ability of the
court to provide a forum for the due and proper administration of
justice in the case. The court should carefully consider the requests
and objections that may be raised by the parties, witnesses, media representatives,
other courthouse personnel, and other individuals as to
the inclusion or exclusion of broadcasting from the courtroom. Factors
that the court should weigh in the decision on broadcasting include
whether the broadcasting of the proceedings would interfere
with the ability of the court to receive honest and complete testimony
of any witness, cause unfair public criticism of a witness or party, or
increase the potential for tampering with the jury or the jury pool.
Protection of witnesses from extreme embarrassment or intimidation
that would traumatize them or render them unable to testify is an
overriding state interest sufficient to justify partial or complete exclusion
of the press or public, but there is no state’s interest; however
compelling, the state’s interest can sustain the exclusion of the press
and public from part of a trial, absent findings of necessity articulated
on the record. 51 Thus, before closing a trial, the judge should state on
the record his reasons for doing so to inform the public and enable the
appellate court an opportunity to review the adequacy of their
reasons. 52
C. Restricting Access to Jurors and Juror Information
The courts have held that the unwarranted prior restraint on freedom
of the press violates the First Amendment even when there existed
a threat of harassment to the jurors if their names were disclosed
during the trial. 53 The courts stated that where the prohibition of the
release of juror’s names is in violation of free press right and where
the jury list was a public record, the prior restraint on the publication
of the jury list was illegal. 54
However, there is case law that supports a judge’s careful exercise
of discretion to forbid news media from publishing the names and addresses
of jurors in criminal cases. In Schuster v. Bowen, the court
held, under the exceptional circumstances of that case, the prohibition
on the publication of the names of jurors was necessary to protect the
51. Globe Newspaper Co. v. Superior Court, 457 U.S. 596, 608–09 (1982).
52. See Rovinsky v. McKaskle, 722 F.2d 197, 200 (5th Cir. 1984).
53. See Des Moines Register & Tribune Co. v. Osmundson, 248 N.W.2d 493 (Iowa
1976); N.M. Press Ass’n v. Kaufman, 648 P.2d 300 (N.M. 1982).
54. See Osmundson, 248 N.W.2d at 501; Kaufman, 648 P.2d at 304.

174 TEXAS WESLEYAN LAW REVIEW [Vol. 16
integrity and impartiality of the jury. 55 Further, it held that the public’s
right to know was irrelevant since the names would be released
on the last day of trial and the only imaginable public member who
might make use of the information was the one who wished to tamper
with the jury. 56
In United States v. Gurney, the court found the trial judge did not
abuse his discretion in restricting the press access to the jury panel
lists, because there were full findings as to a balanced use of discretion
and release of those names that were called in open court. 57
The decisions in Nebraska Press Association v. Stuart and Nixon v.
Warner Communications, Inc. provide guidance in entry of gag orders
dealing with the names and addresses of jurors. The Court set out the
following determination to be made by the trial court:
1. The nature and extent of pretrial news coverage;
2. Whether other measures would be likely to mitigate the effects
of unrestrained pretrial publicity; and
3. How effectively a restraining order would operate to prevent the
threatened danger.
Many states have laws that specifically provide for the confidentiality
of juror information. Strict protection of this right should be provided
by the courts. For example, section 35.29 of the Texas Code of
Criminal Procedure provides:
Information collected by the court or by a prosecuting attorney during
the jury selection process about a person who serves as a juror,
including the juror’s home address, home telephone number, social
security number, driver’s license number, and other personal information,
is confidential and may not be disclosed by the court, the
prosecuting attorney, the defense counsel, or any court personnel
except on application by a party in the trial or on application by a
bona fide member of the news media acting in such capacity to the
court in which the person is serving or did serve as a juror. On a
showing of good cause, the court shall permit disclosure of the information
sought. 58
D. Discharge Contact With and Instructions to Capital Jurors
1. Federal Law
Most federal courts have local rules that severely limit, if not prohibit,
post verdict contact with jurors. Before an attorney may contact
a juror, counsel must file a motion with the court, show good cause,
55. Schuster v. Bowen, 347 F. Supp. 319, 320 (D. Nev. 1972).
56. Id. at 322.
57. United States v. Gurney, 558 F.2d 1202 (5th Cir. 1977).
58. TEX. CODE CRIM. PROC. ANN. art. 35.29 (Vernon 2008).

2010] CAPITAL CASES AND THE MEDIA 175
and obtain specific permission for the contact. 59 Such permission is
seldom granted. 60 The historical purpose of these rules is to prevent
the impeachment of jury verdicts and the harassment and manipulation
of jurors to second guess their jury decisions. 61 At least fifty-one
of the ninety-four federal district courts “have adopted local rules
governing whether and how attorneys may obtain post verdict interviews
with jurors.” 62 Even where there is no local rule against contact
with jurors, the appellate courts have restricted such contact by
counsel. 63
The American Bar Association has also provided in its Code of Professional
Responsibility that a lawyer should not ask questions of or
comment to a juror that might influence future jury service. 64
The federal courts have generally stood by their prohibition on
post-verdict contact with jurors, arguing that such contact could “easily
lead to juror harassment, to the exploitation of their thought
processes in conflict with Rule 606, and to diminished confidence in
jury verdicts as well as unbalanced trial results unduly depending on
the relative resources of the party.” 65
2. State Law
Some states allow communication between the parties, counsel, and
discharged jurors, provided that the communication complies with the
state code of professional responsibility. 66 Communications with jurors
must not be calculated merely to harass or embarrass the juror or
to influence the juror’s actions in future jury service. 67
Look to your state statutes for laws that provide for criminal penalties
for tampering with a witness or informant, jury tampering, and
bribery of a juror.
3. Example
The trial judge may provide the jury with discharge instructions.
Variations on these instructions assist the court in protecting the jury
from undue press attention or adverse public criticism.
59. See Benjamin M. Lawsky, Limitations on Attorney Postverdict Contact with
Jurors: Protecting the Criminal Jury and Its Verdict at the Expense of the Defendant, 94
COLUM. L. REV. 1950, 1958 (1994).
60. See generally Haeberle v. Tex. Int’l Airlines, 739 F.2d 1019, 1021 (5th Cir.
1984) (stating that federal courts disfavor post-verdict interviewing of jurors).
61. See Susan Crump, Jury Misconduct, Jury Interviews, and the Federal Rules of
Evidence: Is the Broad Exclusionary Principal of Rule 606(b) Justified?, 66 N.C. L.
REV. 509, 515 (1987).
62. Lawsky, supra note 58, at 1956.
63. See id.
64. See MODEL CODE OF PROF’L RESPONSIBILITY DR 7–108 (1980).
65. United States v. McDougal, 47 F. Supp. 2d 1103, 1104 (E.D. Ark. 1999).
66. See Lawsky, supra note 58, at 1956–57 (stating that courts with local rules also
follow the Model Rules).
67. Id. at 1960.

176 TEXAS WESLEYAN LAW REVIEW [Vol. 16
The jury can be instructed that they are free to talk to anyone they
want to about the case, but are also entitled to refuse to talk about the
case and their verdict. If the jurors report any threat or other security
concern, the sheriff’s office stands ready to assist the jurors and their
families in maintaining their privacy and peace free from outside
threat, harassment, or intimidation.
E. Ethical Considerations in a Capital Case
It is occasionally necessary to caution members of the Bar regarding
their responsibility toward professionalism, courtesy, timeliness, and
honesty. Several courts have found it necessary to enter orders regarding
the conduct of counsel before the courts. In a capital case, the
use of an Order on Conduct of Counsel may be prudent to prevent the
potential for attorney abuse from the pressure of the media or the
glare of the press.
Model Rules of Professional Conduct Rule 3.6, Trial Publicity, prohibits
lawyers involved in litigation, and the other lawyers in their
firm, from making “an extrajudicial statement that the lawyer knows
or reasonably should know will be disseminated by means of public
communication and will have a substantial likelihood of materially
prejudicing an adjudicative proceeding.” 68 However, the rule lists exceptions
where a lawyer may make certain statements about the case,
such as the offense involved, that an investigation is in progress, the
identity of the accused, and the time and place of arrest. 69 The rule
also permits a lawyer to mitigate adverse publicity by making a statement
that is reasonably required to “protect a client from the substantial
undue prejudicial effect of recent publicity not initiated by the
lawyer or the lawyer’s client.” 70
Further, in Gentile v. State Bar of Nevada the Court found that attorneys,
as officers of the court, have a fiduciary responsibility to the
justice system and must protect its integrity. 71 However, the Supreme
Court expressly declined to decide whether a higher standard of ethical
speech applies to the speech of lawyers who are strangers to the
litigation. 72 Nonetheless officers of the court should always be cautious
about public remarks that might adversely impact the ability to
select a fair and unbiased jury. Reference to this decision may also
assist the trial court in protecting the jury pool from poisoning caused
by the attorney “talking heads” in the press.
Also, trial judges should always use caution when making remarks
in front of the jury. In Kennedy v. State, the Indiana Supreme Court
reaffirmed that trial judges must refrain from any action that would
68. MODEL RULES OF PROF’L CONDUCT R. 3.6 (1983).
69. Id.
70. Id.
71. Gentile v. State Bar of Nev., 501 U.S. 1030, 1057 (1991).
72. Id.

2010] CAPITAL CASES AND THE MEDIA 177
indicate a position other than strict impartiality and should exercise
great care when speaking so as to avoid an indirect expression of opinion
that could improperly influence the jury. 73
III. PRACTICAL APPLICATIONS IN A CAPITAL CASE
The issues of the public’s right to know the news, the media’s job to
report, and the right of the litigants to a fair and impartial trial must
be weighed and balanced carefully by the judge. The attorneys in any
litigation should be focused on the actual preparation and trial of their
cause of action and not on creating publicity that could influence the
outcome of a particular trial. Unfortunately, there are attorneys who
believe that their case should be tried in the court of public opinion
instead of the court of law. Additionally, even in a case where the
court and counsel are completely focused on the professional disposition
of the case in the courtroom, the press may take an interest in a
case and create a media focus which might adversely affect the due
and proper administration of justice in the case, trial hearings, and the
trial itself. Normally, pretrial hearings will not attract significant media
interest unless the parties or attorneys are improperly fanning the
fire of media interest. However, capital cases are different, and every
hearing will generate some type of media comment or focus, particularly
in smaller counties. Because of the unique attention of the media
to capital cases, the trial court should carefully manage and limit
the number and timing of pretrial hearings. The trial court should
enter appropriate pretrial orders and discuss with counsel the need to
limit pretrial hearings that could unduly affect the potential jury pool.
A cautious trial court may enter a detailed pretrial and trial management
order with specific deadlines for discovery, hearings, jury selection,
and trial. Some of the court’s rulings can be carried until after
the jury is selected to limit the effect of the publicity upon the jury
pool. Once the jury is selected and placed under the court’s instructions
or sequestered, then the court can issue rulings that might generate
additional publicity or that might contain prejudicial information.
The trial court should utilize its sanction authority if counsel attempts
to try the case in the media or unduly prejudice the jury pool by filing
pretrial motions that try the case in the pleadings. A hearing on a
pretrial matter can be set so that it does not hit the prime-time media
market on the highest distribution day.
At the first hint that a case will be the focus of exceptional media
attention, the trial judge should take appropriate steps to prepare the
court staff to deal with the capital case. Development of protocols for
dealing with a capital case should be addressed in the calm environment
of life “before” the capital case. Once the case hits the press,
73. Kennedy v. State, 280 N.E.2d 611, 620–21 (Ind. 1972); see also Starr v. United
States, 153 U.S. 614 (1894); Lagrone v. State, 84 Tex. Crim. 609, 209 S.W. 411 (1919).

178 TEXAS WESLEYAN LAW REVIEW [Vol. 16
the swirl of media attention may interfere with preparation of a capital-case-management
plan by the court.
Early planning and management in a capital case is critically important
to providing the calm, focused, and judicious atmosphere for the
pretrial and trial of a case.
A. Pretrial Management Issues to Protect Jury Pool
The trial court should promptly issue pretrial orders, restrictive and
protective orders, orders on conduct of counsel, and such other security
or media orders necessary to focus counsel, the parties, and the
witnesses on organization of the case for trial in a courtroom and not
in the press. The entry of such orders and limitations on the number
of pretrial hearings and motions heard by the court may help protect
the jury pool from damaging and prejudicial pretrial publicity. The
trial court should stand ready to enforce its orders through appropriate
sanctions against the witnesses, parties, and counsel who seek to
improperly influence the outcome of a case through the press. The
Texas Penal Code section 36.03 provides that it is an offense to influence
or attempt to influence a public servant in a specific exercise of
his official power or duty. 74 It is also a violation of the Texas Penal
Code to privately address communications to any public servant (that
includes a juror) who exercises or will exercise official discretion in an
adjudicatory proceeding with the intent to influence the outcome of
the proceeding on the basis of considerations other than those authorized
by law. 75
1. Restrictive and Protective Order
The trial court should never enter a gag order. The very sound of
the word raises an objection. However, many courts now look to appropriate
restrictive and protective orders to protect a case from unfair
pretrial publicity and inappropriate comments by counsel
regarding pending litigation. The use of a well-drafted Restrictive and
Protective Order will set the tone of the trial. Attorneys and the public
will sense that the judge is in control of the proceedings and is
focused on providing the proper environment for a fair trial.
The court should consider promptly issuing a Restrictive and Protective
Order to prevent counsel, parties, and potential witnesses from
adversely influencing the jury pool or impeding the due and proper
administration of justice. This order should be issued timely, copies
served on counsel, the parties, and witnesses, and amended as needed.
Copies should also be available for the media. To avoid problems
with pretrial publicity, the court may issue restrictive and protective
74. TEX. PENAL CODE ANN. § 36.03(a) (Vernon 2003).
75. Id. § 36.04(a).

2010] CAPITAL CASES AND THE MEDIA 179
orders dealing with witnesses, counsel, security, and media conduct
during pretrial and trial.
In Nebraska Press Association v. Stuart, the Court held that the
state court’s restraining order (gag order) prohibiting the media from
reporting accounts of the case was in violation of the First Amendment
constitutional provisions. 76 These prior restraining orders, or gag
orders, are normally found to be in violation of the Constitution and
should not be entered. 77 However, the court is permitted to enter appropriate
protective orders controlling the dissemination of information
from attorneys, parties, witnesses, court staff, and law
enforcement agencies where the orders are necessary and appropriate
for due process protection of rights. 78
Courts have held that the media has the same right of access to a
criminal trial as the public, and that absent an overriding interest articulated
in a finding, the trials of a criminal case must be open to the
public. 79 Therefore, any restrictive order must be based on specific
findings and articulate the overriding interest that made the basis of
the restrictions. 80
2. Court Information Officer
In a capital case, the court may appoint a court information officer
to assist the media with obtaining accurate information regarding state
law and procedural matters in the case. This individual is not allowed
to give opinions about the merits or demerits of the case but to assist
in making sure that non-lawyer media representatives receive accurate
information.
During the pretrial hearings, the information officer may moderate
any press briefings and serve as a contact for information regarding
case setting and court orders. During the trial the information officer
may hold daily press briefings, obtain public information for the press,
and serve as a liaison to the press for public information about the
case from the court and clerk’s office.
A benefit of appointing a court information officer is that he or she
can become an effective presence in obtaining media compliance with
the court’s orders in the case. The eyes and ears in the press room
allow the court to problem solve before the problem becomes serious
enough to influence the trial.
The court information officer should develop an open dialogue with
the media to problem solve and yet maintain compliance with the
court’s orders. This will allow the media to obtain their information
76. Neb. Press Ass’n v. Stuart, 427 U.S. 539, 568–70 (1976).
77. See id.
78. See id.
79. See Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 580–81 (1980).
80. See id.

180 TEXAS WESLEYAN LAW REVIEW [Vol. 16
and the court to maintain the proper dignity and decorum for judicial
decision making.
3. Retaining an Expert
In a capital case, the trial court might consider retaining an expert
to assist in media management. This expert can assist in pre-filing and
post-filing, adverse publicity management, and can assist the trial
court in establishing orders and media-management rules that will be
effective in creating a calm, focused, and judicious atmosphere and
approach to case disposition. An expert with a media and legal background
will prove most effective in developing a positive media and
legal approach to the case.
This expert can assist in development of a media committee to
guide the court in media management and trial management issues.
Working with the media through a skilled professional who is
respected by the press can be the most valuable tool in management
of the case. This will allow the media to express their needs, concerns,
recommendations and demands and will allow the court to respond
through the media expert, rather than directly, to the development of
a media-management plan for the case.
B. Media Management
1. Media Management Order
A well written and edited Media Management Order is essential to
handle the press of the capital case. This order should be developed
with input from the media expert, attorneys, sheriff, and facility plant
manager at the courthouse, court clerk, court information officer, and
the trial court. The trial judge must sign onto this order and be willing
to enforce its provisions.
2. Media Room
If the case is a capital case, the court might consider setting up a
media room. This room may prove very useful in diverting the media
from the courtroom to a place more accessible for them, more convenient
to conduct their writing and reporting tasks, and to a location
that does not distract the court, counsel, litigants, witnesses, and most
importantly the jury from the trial focus and work in the courtroom.
Many courthouses will not have adequate space for a proper media
room, but if the judge looks at surrounding buildings, a media room
space might be conveniently located adjacent to the courthouse. If
the case is capital enough, many courthouses will cooperatively work
to provide a media room in the courthouse, with a little advanced
planning.
The media room should contain sufficient space, tables, chairs, telephone
lines, cable access (preferably high speed), a copier, and an in-

2010] CAPITAL CASES AND THE MEDIA 181
terview area. Most media plans will have the media committee
allocate the expense of such a set up among the media members requesting
media room access passes. It is important to have the cooperation
of the facility plant manager at the courthouse, the sheriff’s
office, the county judge, and the presiding judge to set up the media
room arrangements.
If the court is allowing cameras in the courtroom, the designated
pool television camera organization should make arrangements to
provide the feed into the media room for the other media outlets.
They should also arrange access for the other cameras to pool the audio
and video feed.
Organizations such as truTV 81 are extremely efficient in setting up
the pooling arrangements and the gavel-to-gavel feed to the media
room. This setup normally will take one day of advance work by an
experienced court television organization.
If the trial is not receiving gavel-to-gavel coverage, setting up the
pool and media room feed may be a little more complicated and the
media committee should take the lead in making those arrangements.
3. Reserved-Seating Plan
In a capital case, there may be a large number of media representatives
who want access to the courtroom during the trial, as well as
members of the public, local schools, attorneys, courthouse officials
and employees, and court security officers and their families. A courtroom
that is usually empty behind the bar may be overflowing with
interested persons. The court must address the seating plan and the
attorneys should communicate their needs with the court. Counsel
may need extra seating for his staff, co-counsel, parties, and expert
witnesses and room to stack the boxes of exhibits, depositions, and
other documents needed for the trial. In a high-profile case, the space
needs of counsel, the court, and the media may conflict. This demands
early and cooperative planning.
It is important for counsel to notify the court, in writing, of any
specific space and seating needs for the trial of the case. The importance
of having the legal team available to assist in document handling,
evidence retrieval, and production of deposition summaries
during the trial is critical. Placement of these team members in a convenient
location to the counsel table can assist in the orderly presentation
of the case.
The court may assign seats for the general public to ensure compliance
with the spirit of the open courts provisions of many state
constitutions.
81. Court TV changed its name to truTV as of December 31, 2007. See truTV
Name Change, http://www.trutv.com/newname.html (last visited Oct. 23, 2009).

182 TEXAS WESLEYAN LAW REVIEW [Vol. 16
The media will always request courtroom seating, but the press seldom
utilizes all of the seating made available to them. This is especially
true if the court is allowing gavel-to-gavel coverage which is
delivered by closed circuit to the media room. The media will generally
prefer to remain in the media room to snack, drink, work, talk,
and watch the trial at the same time.
The court can assist by preparing a reserved-seating chart. In an
extremely capital case, the court should issue seating passes, have a
bailiff assigned outside the courtroom door to check passes before entry,
and issue a public, press, student, and public information packet to
give instructions to those wishing to watch the trial in the courtroom.
4. Press Conferences
If the case is extremely high profile, there will be an interest in daily
press conferences or press briefings. If the trial court can limit the
attorney’s ability to give press conferences, the trial will progress
quicker with the attorneys, witnesses, litigants, and jurors focused on
their jobs and not publicity. The appointment of a court information
officer can help provide the press with accurate information on scheduling,
legal terminology interpretation, and logistical information.
This may help relieve the media pressure upon the attorneys and allow
them greater freedom to focus on their case. Following the trial
verdict, the press will be extremely interested in interviewing the attorneys,
witnesses, parties, and the jurors. At the conclusion of the
trial, counsel should make themselves available to address questions
in an ethical and professional manner. This may help foster public
confidence in the justice system. Counsel should be careful not to be
critical of the jurors so as not to improperly influence future jury
pools.
5. Media Truck Parking
An enormous distraction to the jurors, witnesses, attorneys, litigants,
and general public is the parking of satellite trucks around the
courthouse. The court should consider designated parking areas for
the satellite trucks at a location that is not noticeable to jurors and
others coming to the courthouse. Early direction, court orders, and
constant enforcement of these parking restrictions are important to
provide a quiet atmosphere and proper courthouse decorum for decision
making in the case.
The court’s security and media order should address media truck
parking. Cooperation by the local police department is often needed
to enforce these orders. The media will quickly forget and violate
these orders unless promptly enforced by the police.

2010] CAPITAL CASES AND THE MEDIA 183
6. Local v. National Media Interest and Compliance
Generally, the court will have better success in having local media
comply with the court’s orders. This is because those local media concerns
will want access on other, perhaps not as capital, cases in the
future.
Many times the national media anticipate that this is the one and
only time they will need access to that court and therefore their vested
interest in compliance is directly related to how much access they are
deprived of if they violate the court’s order. Some organizations, such
as truTV, have developed an excellent reputation for cooperative and
professional work on capital cases. The key is to provide information
to these media organizations about what the rules of access are and
that they will be enforced.
7. Courtroom and Courthouse Violations of Orders
The trial judge must be committed to enforcing the courtroom and
courthouse orders. If violators go unsanctioned, the violations will
grow exponentially. Many judges will not relish the responsibility of
enforcing orders against the media, but this is critical to an orderly
trial.
The maximum penalty is not needed for all violations; however,
quick, decisive and firm direction, correction, and response are
needed when a violation occurs.
The media should have a vested interest in working within the
court’s orders, not around them. If the media wants access to cameras
in the courtroom, reserved seating, a media room, and the other arrangements
that the court can provide in a carefully structured media
order, then the media must abide by the rules and restrictions that
provide such open access.
C. Trial Management
1. Trial Management of Jurors in Capital Cases
The trial court should carefully manage the coming and going of the
jurors in a capital case. If the jury is not going to be sequestered, the
court must spend time carefully admonishing and reminding the jurors
not to read, listen to, or watch anything regarding the case and trial.
Whether or not the jury is sequestered, the trial court should attempt
to protect the jurors from contact with or exposure to the media while
traveling to the courthouse, while at the courthouse, and when leaving
the courthouse. Special pretrial orders designating secure areas can
help protect the jury from press exposure. The trial court should work
with the local sheriff to help escort the jurors in and out of the courthouse
and to keep others away from the jury room and their break
area.

184 TEXAS WESLEYAN LAW REVIEW [Vol. 16
2. Jury Room and Jury-Break Management
In order to protect the jurors from the glaring eye of the press, the
court will need to provide the jurors with a safe, convenient, and secure
location to assemble in the morning before court, during breaks,
and during deliberations. This area should be carefully protected
from the inquiring eyes and voices of the media, witnesses, attorneys,
and the parties. In capital cases the court should seriously consider
sequestering the jury or, at the least, protecting their arrival and departure
from the courthouse from becoming publicly disseminated
news.
The court’s bailiff should arrange snacks, drinks, and stretch breaks
for the jury. Accommodations for rest rooms, smoke breaks, and
meals should be planned so that the jury is not paraded in front of the
press, witnesses, or litigants.
The court should give the jury careful instructions with constant reminders
regarding their duty not to talk to anyone about the case; not
to read, listen, or watch anything discussing the case; and not to allow
anyone to discuss the case within hearing. Communications with jurors
during their service can result in contempt penalties, criminal
punishment, and mistrials. The parties need to assist the court by
carefully instructing their witnesses, litigation team, and parties not to
have any contact or communication with the jury.
3. Witness Ready Room and Instructions
Another tool used to protect a case from being adversely affected
by the media and public interest is to have a location for the witnesses
to assemble at the courthouse. They should receive careful instructions
not to talk about the case. These instructions should also be
posted in and around the witness ready room and counsel should be
directed to discuss these instructions with their witnesses.
4. Scheduling of Trial Day
The trial schedule and media schedule are generally on two different
planes of existence. The media’s deadlines vary by media outlet
and organization. The court’s schedule varies depending on what
other work the court has that day and the organization of counsel in
having witnesses and evidence prepared for presentation. Consider
clearing your calendar of other matters and devoting extraordinary
time to the trial of the capital case. This will keep the lawyers working
on the trial and not playing to the press. This will also assist in keeping
the courthouse and security personnel focused on their trial duties.
Furthermore, a schedule will help keep the jurors in a more controlled
environment, focus them on the evidence produced in the courtroom,
and have them deliberating quicker, which limits opportunities for
jury misconduct or tampering.

2010] CAPITAL CASES AND THE MEDIA 185
The trial court should schedule the work day, publish that schedule,
and keep the attorneys on track. Unscheduled delays are frustrating
to the jury, the litigants, and the court’s busy work schedule, and allow
the media to show a judicial system that appears unorganized and unprofessional.
Keeping to a trial-day schedule is difficult, but it can be
accomplished by professional attorneys and a tough judge.
D. Preparing the Judge and Court Staff for a Capital Case
Remember that no matter how many capital cases you have presided
over, the case that is drawing significant media attention should
be carefully handled by the attorneys and the trial judge. This case is
“on show” more than any others to demonstrate that our system of
justice is effective or an embarrassment. A high degree of professionalism,
ethics, and abilities of the judge and staff is essential in all cases,
but is particularly important in a case where the public will be judging
how our system of law responds to claims brought before the bar of
justice.
In handling a capital case, it is important that the public remains
confident that the judge and attorneys are committed to fairness, justice,
and a scholarly application of the law.
1. Conduct of Court Staff
The court’s staff is an important part of the successful trial of a capital
case. Before the first media event, whether pretrial or trial, the
judge and staff should review and discuss the media and trial-management
plan. The plan could be a formal document or developed by
experience in dealing with capital cases and should include procedures,
schedules, and conduct. The court staff should consider the
following:
1. limit casual remarks to jurors, other staff, and even friendly
attorneys;
2. show no emotion or physical reaction to testimony or to events
in the courtroom or to the jury at any time;
3. always be courteous and professional, especially in the stress of
the capital case;
4. jury panel processing and trial are open to the public even when
jury empanelling is in a remote location;
5. always communicate problems and concerns to the judge as they
arise; and
6. review in detail the plans for jury, media, and witness rooms, as
well as restrictive and protective orders.
2. Role of the Judge
The trial judge should exemplify the independence, integrity, dignity,
impartiality, and work ethic of the highest standard. A judge’s

186 TEXAS WESLEYAN LAW REVIEW [Vol. 16
conduct not only reflects upon that judge and his or her court, but on
the entire judiciary, and impacts the public’s perception and confidence
in the judicial system as well. Therefore, each judge should restrict
his personal conduct in an appropriate fashion so as not to bring
discredit or unjust criticism upon the judiciary. The judge should
maintain complete control, appropriate decorum, and authority in the
courtroom; and should restrict comments and rulings to those statements
reasonably necessary to properly dispose of the case and to preserve
the orderly administration of justice.
The trial judge should remember:
1. Every case has its own unique complexities, but the capital case
will certainly call upon the judge to utilize all of his or her training
and education. Early and decisive rulings from the trial court
may help direct the case to a decision protected from the outside
influence of media attention.
2. The capital trial is work—hard work. We are not in the entertainment
business. Complete attention to the facts and law to
seek truth and justice is the critical obligation of a good judge.
3. Enter appropriate orders to counsel as soon after filing or indictment
as possible to assist counsel in understanding and following
their professional responsibility to restrict trial publicity.
4. Consider any reasonable continuances to allow arrest and indictment
publicity to quiet down before trial of the case.
5. Summon a larger jury panel from which you would select your
jurors to allow additional challenges for cause based on pretrial
publicity bias.
6. Request cooperation from the local news media (this will only
occasionally be successful) and issue any necessary restrictive
and protective orders.
7. Provide careful and complete instructions to the selected jurors
on their restricted conduct.
8. Sequester the jury when necessary to limit media impact.
9. Issue restrictive orders and instructions to witnesses in the case.

A LITTLE TLC: TENDER, LIABILITY, AND
COVENANTS VIS-À-VIS RECOVERY OF
PRE-NOTICE DEFENSE COSTS AFTER
PAJ, INCORPORATED v. HANOVER
INSURANCE COMPANY AND ITS PROGENY
By: J.J. Knauff 1
I. INTRODUCTION.......................................... 187 R
II. PAJ, INC. V. HANOVER INSURANCE COMPANY.......... 189 R
III. PRODIGY COMMUNICATIONS CORPORATION V.
AGRICULTURAL EXCESS & SURPLUS INSURANCE
COMPANY ............................................... 190 R
IV. FINANCIAL INDUSTRIES CORPORATION V. XL
SPECIALTY INSURANCE COMPANY ...................... 191 R
V. THE EFFECT OF PAJ ON PRE-TENDER COSTS ...........
A. Other state court opinions regarding pre-tender
192 R
costs ................................................ 192 R
B. Federal court opinions regarding pre-tender costs. ... 194 R
C. Application ......................................... 195 R
VI. PRE-PAJ ARGUMENTS AND CASES SUPPORTING DENIAL
OF PRE-TENDER COSTS .................................
A. Texas cases regarding pre-tender costs decided before
195 R
PAJ................................................. 195 R
B. Insurer’s argument that the duty to defend does not
arise until notice .................................... 197 R
C. Insurer’s argument that pre-tender costs are
voluntary payments ................................. 198 R
D. Application ......................................... 198 R
VII. CONCLUSION ............................................ 199 R
I. INTRODUCTION
An oil and gas operator (operator) contracted with a drilling company
(driller) to drill an oil well in Texas. 2 The contract contained
1. JERRY JOE “J.J.” KNAUFF, JR. graduated from Texas Tech University in
1997 and received his Juris Doctorate from Texas Wesleyan University in 2001. After
being admitted to the State Bar of Texas, J.J. worked as a briefing attorney for Justice
Tom James of the Fifth District Court of Appeals in Dallas. In 2001, J.J. received the
State Bar—LSD Legal Professionalism Award and was named Fort Worth’s “Man of
the Year” in 2002 by the Fort Worth Star-Telegram. J.J. is a shareholder at The Miller
Law Firm and his areas of expertise include construction defect, appellate, oil and gas,
and personal injury litigation. He is admitted to practice before the U.S. District
Court, Northern District of Texas and is a member of the Texas State Bar Association.
2. Note, the arguments and authorities contained in this article are applicable to
all contracts containing valid defense and indemnity language and not just scenarios
in the oil and gas context.
187

188 TEXAS WESLEYAN LAW REVIEW [Vol. 16
valid defense and indemnity language providing that the driller would
defend and indemnify the operator and its group, including its subcontractors,
from any claims, damages, or suits arising out of the driller’s
work. The defense and indemnity clause was also supported by insurance.
The operator’s subcontractors were not parties to the contract
and had no knowledge of the language contained in the contract.
On January 2, 2009, an employee of the driller was severely injured
in an accident. The employee sued the operator and one of its subcontractors
on March 1, 2009. The subcontractor answered the suit
and began defending itself by completing written discovery, hiring experts,
and taking numerous depositions. The subcontractor paid for
all of these defense efforts out of its own pocket.
On November 1, 2009, the operator produced copies of its contract
with the driller and the driller’s insurance policy. After reviewing
these documents, the subcontractor immediately made a demand for
defense and indemnity and treatment as an additional insured from
the driller and its insurer. The case was settled on December 1, 2009.
The driller’s insurer participated in the settlement negotiations and
paid the subcontractor’s portion of the settlement. The driller’s insurer
also paid for the subcontractor’s defense from the date of tender
but refused to reimburse the subcontractor for its substantial defense
costs incurred in the eight months before tender.
Insurance companies increasingly contend comprehensive or commercial
general liability policies exclude coverage for defense costs
incurred before the insured has provided notice. 3 To deny pre-tender
costs, insurance companies in Texas often argue they are not responsible
for any costs incurred before notice, they are not responsible for
voluntary payments, and they cite the following cases: E&L Chipping,
Company v. Hanover Insurance Company; Nagel v. Kentucky; and
LaFarge Corporation v. Hartford Casualty Insurance Company.
This article analyzes the impact of PAJ, Inc. v. Hanover Insurance
Company and similar cases on the arguments by insurers to deny prenotice
defense costs. 4 This article also analyzes decisions in other jurisdictions
that support the recovery of pre-tender defense costs.
3. Stephen A. Klein, Insurance Recovery of Prenotice Defense Costs, 34 TORTS &
INS. L.J. 1103 (1999).
4. Compare PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630, 631 (Tex. 2008), with
Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Crocker, 246 S.W.3d 603, 609 (Tex.
2008) (holding that “an insurer’s actual knowledge that an additional insured has
been served with process does not establish as a matter of law that the insurer has not
been prejudiced by the additional insured’s failure to notify the insurer of the receipt
of process”). See also Pecan Grove Assocs. v. John L. Wortham & Son, No. 01-98-
01020-CV, 1999 WL 460086, at *3 (Tex. App.—Houston [1st Dist.] July 8, 1999, pet.
denied) (not designated for publication) (holding insured’s failure to provide notice
until months after settlement barred recoupment of pre-tender defense costs and/or
settlement monies paid by insured). The difference between PAJ and Crocker is the
appellant provided late notice of suit in PAJ; whereas, in Crocker, the appellant never

2010] RECOVERY OF PRE-NOTICE DEFENSE COSTS 189
II. PAJ, INC. V. HANOVER INSURANCE COMPANY
On January 11, 2008, the Supreme Court of Texas handed down its
opinion in PAJ, Inc. v. Hanover Insurance Company. 5 The PAJ court
was tasked with deciding “whether an insured’s failure to timely notify
its insurer of a claim defeats coverage under the policy if the insurer
was not prejudiced by the delay.” 6
PAJ was a manufacturer and distributor of jewelry that maintained
a Commercial General Liability (CGL) policy with Hanover Insurance
Company. 7 The CGL policy required PAJ to notify Hanover of
any claim or suit brought against PAJ “as soon as practicable.” 8 During
the policy period, PAJ received a cease-and-desist demand to stop
marketing a line of jewelry and was sued for copyright infringement. 9
PAJ waited four to six months after suit was filed before it notified
Hanover of the lawsuit; Hanover denied coverage due to the failure of
PAJ to provide notice of the lawsuit “as soon as practicable.” 10 PAJ
brought suit against Hanover seeking a declaration of its rights under
the CGL policy. In that suit, PAJ stipulated it failed to notify Hanover
of the claim “as soon as practicable” and Hanover stipulated it
was not prejudiced by the untimely notice. 11 Both parties moved for
summary judgment on the notice issue based on these undisputed
facts. 12 The trial court granted Hanover’s motion holding Hanover
was not required to demonstrate prejudice to avoid coverage under
the policy. 13 The trial court’s judgment was affirmed by the Court of
Appeals, and PAJ filed a petition for review with the Supreme Court
of Texas. 14
The Supreme Court of Texas reversed the Court of Appeals. 15 In
doing so, the court determined “[c]onditions are not favored in the
law; thus, when another reasonable reading that would avoid a forfeiture
is available, [the court] must construe contract language as a covenant
rather than a condition.” 16 It then held “an immaterial breach
does not deprive the insurer of the benefit of the bargain and thus
cannot relieve the insurer of the contractual coverage obligation.” 17
Because timely notice is a covenant, the PAJ court expressly held the
gave notice. See Jenkins v. State and County Mut. Fire Ins. Co., 287 S.W.3d 891, 898
(Tex. App.—Fort Worth 2009, pet. denied).
5. PAJ, 243 S.W.3d at 630.
6. Id. at 631.
7. Id.
8. Id.
9. Id.
10. Id.
11. Id.
12. Id.
13. Id. at 631–32.
14. Id. at 632.
15. Id. at 637.
16. Id. at 636.
17. Id. at 631.

190 TEXAS WESLEYAN LAW REVIEW [Vol. 16
failure to timely provide such notice will not defeat coverage absent a
finding of prejudice. 18
The PAJ holding abrogated prior precedent that held when a notice
provision is breached, “liability on the claim [is] discharged, and harm
(or lack of it) resulting from the breach [is] immaterial.” 19 The PAJ
decision places Texas in alliance with the national majority position in
regards to providing timely notice of a claim or suit to an insured’s
liability insurer. 20 Post-PAJ, it is clear the insurer may not refuse to
defend or indemnify the insured unless the delay prejudiced the insurer’s
rights under the policy. 21
III. PRODIGY COMMUNICATIONS CORPORATION V. AGRICULTURAL
EXCESS & SURPLUS INSURANCE COMPANY
On the same day it handed down its opinion in PAJ, the Supreme
Court of Texas granted the petition for review in Prodigy Communications,
Inc. v. Agricultural Excess & Surplus Insurance Company, 22
and accepted a certified question from the Fifth Circuit in XL Specialty
Insurance Company v. Financial Industries Corporation. 23 On
March 27, 2009, the Supreme Court of Texas delivered its opinion in
both cases.
In Prodigy, the Supreme Court of Texas had to determine:
Whether . . . an insurer can deny coverage based on its insured’s
alleged failure to comply with a policy provision requiring that notice
of a claim be given ‘as soon as practicable,’ when (1) notice of
the claim was provided before the reporting deadline specified in
the policy; and (2) the insurer was not prejudiced by the delay. 24
Prodigy concerned a claims-made-and-reported policy25 containing a
condition precedent that required the insured to give “notice of a
claim to its insurer ‘as soon as practicable . . . but in no event later
than ninety (90) days after the expiration of the Policy Period or Discovery
Period.’” 26
18. Id. at 636–37.
19. See, e.g., Members Mut. Ins. Co. v. Cutaia, 476 S.W.2d 278, 279 (Tex. 1972).
20. PAJ, 243 S.W.3d at 634 n.3 (counting thirty-eight states, including Texas, as
having adopted a notice-prejudice rule in some form versus only six states and the
District of Columbia identified as adhering to the traditional rule).
21. Id.
22. Prodigy Commc’ns Corp. v. Agric. Excess & Surplus Ins. Co., 288 S.W.3d 374
(Tex. 2009).
23. See J. Price Collins, Ashley E. Frizzell & Omar Galicia, Insurance Law, 61
SMU L. REV. 877, 895 (2008).
24. Prodigy, 288 S.W.3d at 377.
25. See id. at 379 n.7 (discussing the difference between claims-made and claimsmade-and-reported
policies).
26. Id. at 375.

2010] RECOVERY OF PRE-NOTICE DEFENSE COSTS 191
In Prodigy, the insured was served with a suit on June 20, 2002, and
notified its insurer of the suit on June 6, 2003. 27 The insurer denied
coverage because notice was not given as soon as practicable. 28 The
insured sued its insurer seeking a declaration that the claim was covered
under the policy, and the insurer moved for summary judgment,
which was granted. 29 The court of appeals affirmed holding:
(1) Prodigy was required to give notice “as soon as practicable,”
even though the policy allowed notice within ninety days after the
expiration of the discovery period; (2) notice given almost one year
after the filing of the lawsuit against the insured was not “as soon as
practicable” as a matter of law; (3) [the insurer] was not required to
prove that it was prejudiced by Prodigy’s late notice; and (4) Insurance
Code provisions did not prevent [the insurer] from enforcing
the policy’s notice provision. 30
The insured filed a petition for review and, based on PAJ, argued to
the Supreme Court of Texas that any breach of duty to give notice “as
soon as practicable” was immaterial and could not defeat coverage
because the insurer was not prejudiced by the failure. 31 Conversely,
the insurer argued PAJ was not on point because the policy at issue
unambiguously stated “notice, in writing, as soon as practicable” was a
condition precedent to coverage and timely notice is “always inherent
to, and an essential part of, the bargained-for exchange in a claimsmade
policy.” 32 The Supreme Court of Texas disagreed with the insurer
and, “[f]ollowing PAJ, [held] in the absence of prejudice to the
insurer, the insured’s alleged failure to comply with the provision does
not defeat coverage.” 33
IV. FINANCIAL INDUSTRIES CORPORATION V. XL SPECIALTY
INSURANCE COMPANY
Financial Industries Corporation v. XL Specialty Insurance Company
34 concerns a traditional 35 claims-made insurance policy. 36 In XL
27. Id. at 376 (the “Discovery Period” expired on May 31, 2003).
28. Id.
29. Id. at 377.
30. Id.
31. Id. at 377–78.
32. Id. at 378.
33. Id. at 375.
34. Fin. Indus. Corp. v. XL Specialty Ins. Co., 285 S.W.3d 877, 877–78 (Tex. 2009).
35. See E. Tex. Med. Ctr. Reg’l Healthcare Sys. v. Lexington Ins. Co., 575 F.3d
520, 528 (5th Cir. 2009) (noting a “traditional claims-made policy” is one “without a
‘clear-cut reporting deadline’ for the reporting of claims to the insurer, but with an ‘as
soon as practicable’ requirement”).
36. See Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Willis, 296 F.3d 336, 343 (5th
Cir. 2002) (“The purpose of claims-made policies, unlike occurrence policies, is to
provide exact notice periods that limit liability to a fixed period of time ‘after which
an insurer knows it is no longer liable under the policy, and for this reason such reporting
requirements are strictly construed.’”).

192 TEXAS WESLEYAN LAW REVIEW [Vol. 16
Specialty, the United States Court of Appeals for the Fifth Circuit certified
the following question to the Supreme Court of Texas: “Must an
insurer show prejudice to deny payment on a claims-made policy,
when the denial is based upon the insured’s breach of the policy’s
prompt-notice provision, but the notice is nevertheless given within
the policy’s coverage period?” 37 Basing its opinion on the reasoning
set forth in Prodigy and its holding in PAJ, 38 the Supreme Court answered
the certified question in the affirmative. The court then held
“an insurer must show prejudice to deny payment on a claims-made
policy, when the denial is based upon the insured’s breach of the policy’s
prompt-notice provision, but the notice is given within the policy’s
coverage period.” 39
V. THE EFFECT OF PAJ ON PRE-TENDER COSTS
There is no Texas precedent post-PAJ to determine whether pretender
costs are recoverable; however, it is likely the Supreme Court
of Texas will treat such cases the same as those courts where notice is
treated as a covenant. 40 Therefore, other jurisdictions can provide
guidance in determining responsibility for pre-tender defense costs.
A. Other state court opinions regarding pre-tender costs
Other state courts have held the prejudice analysis should apply to
the existence of a duty to defend after late notice. Furthermore, these
courts have found the prejudice analysis should also be applied to prenotice/pre-tender
defense costs.
Like the PAJ court, in Alcazar v. Hayes, the Tennessee Supreme
Court abandoned its long-standing adherence to the traditional common
law approach that notice was a condition precedent to recovery
under an insurance policy regardless of whether prejudice to the insurer
was shown. 41 Instead, the Alcazar court “adopted the modern
trend and held that in order for forfeiture of an insurance policy to
result from an insured’s breach of a notice provision, prejudice to the
insurer must be shown.” 42 The Alcazar court did not address whether
pre-notice costs were recoverable; however, a Tennessee federal dis-
37. Fin. Indus. Corp., 285 S.W.3d at 877.
38. Id. at 879.
39. Id.
40. Compare Griffin v. Allstate Ins. Co., 29 P.3d 777, 782 (Wash. Ct. App. 2001)
(stating that even in policies where tender is a condition precedent, the insurer must
show actual prejudice before the insured’s breach will release the insurer from its duty
to defend), with PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630, 636–37 (Tex. 2008)
(holding that “insured’s failure to timely notify its insurer of a claim or suit does not
defeat coverage if the insurer was not prejudiced by the delay”).
41. Alcazar v. Hayes, 982 S.W.2d 845, 849, 853 (Tenn. 1998); see also PAJ, 243
S.W.3d at 634 n.3.
42. See Alcazar, 982 S.W.2d at 853.

2010] RECOVERY OF PRE-NOTICE DEFENSE COSTS 193
trict court, applying the holding in Alcazar, did find that such costs
were recoverable subject to a prejudice analysis. 43
As in PAJ, Maryland’s Supreme Court treats the duty to notify as a
covenant that, absent a showing of prejudice, does not excuse the insurer
from complying with its duty to defend. 44 The Maryland court
concluded “[t]he duty to defend, rationally, should attach at the same
moment the correlative right to control attaches, i.e., . . . when an
insured occurrence happens. If that is when the insurer has a right to
exercise control, that is also when its duty to do so should arise.” 45
Based on its analysis, the court held the insurer was liable for the prenotice
fees and expenses of the insured. 46
In Nationwide Mutual Fire Insurance Company v. Beville, a Florida
appellate court determined the insurer was liable for pre-tender defense
costs because “there is no suggestion that the insured’s expenses
(prior to the tender) were unreasonable or in some way prejudiced the
carrier.” 47 In Rovira v. LaGoDa, Inc., a Louisiana court of appeals
held:
[T]he duty to defend arises when the insurer receives notice of the
litigation. Delayed notice of a claim relieves the insurer of the obligation
if it was actually prejudiced by the delay. [The insurer] has
not shown that it was prejudiced by the 20-day lapse between
Rovira’s filing of suit and LaGoDa’s notice of claim and request for
defense. The attorney’s fees that LaGoDa incurred during this time
are recoverable. 48
Similarly, another Louisiana court of appeals indicated an insured is
entitled to compensation for the value of the benefit provided by private
defense counsel prior to the time the insured made demand upon
the insurer for a defense. 49 In Costagliola v. Lawyers Title Insurance
Corporation, a New Jersey appellate court determined an insurer must
reimburse all defense costs despite untimely notice, absent a showing
of appreciable prejudice. 50 Additionally, the Massachusetts Superior
Court, in Wyman-Gordon Company v. Liberty Mutual Fire Insurance
Company, rejected the argument that, even without prejudice, an insurer
has no duty to reimburse pre-notice defense costs. 51 Finally, in
43. See Smith & Nephew, Inc. v. Fed. Ins. Co., No. 02-2455 B., 2005 WL 3434819,
at *1, *3 (W.D. Tenn. Dec. 12, 2005).
44. Sherwood Brands, Inc. v. Hartford Accident & Indem. Co., 698 A.2d 1078,
1084 (Md. 1997); see also PAJ, 243 S.W.3d at 636–37.
45. Sherwood Brands, 698 A.2d at 1083–84.
46. Id. at 1087.
47. Nationwide Mut. Fire Ins. Co. v. Beville, 825 So. 2d 999, 1004 (Fla. Dist. Ct.
App. 2002).
48. Rovira v. LaGoDa, Inc., 551 So. 2d 790, 794–95 (La. Ct. App. 1989).
49. Foote v. Sarafyan, 432 So. 2d 877, 882 (La. Ct. App. 1982).
50. Costagliola v. Lawyers Title Ins. Corp., 560 A.2d 1285, 1289 (N.J. Super. Ct.
Ch. Div. 1988).
51. Wyman-Gordon Co. v. Liberty Mut. Fire Ins. Co., No. 96-2208A, 2000 WL
34024139, at *6–7 (Mass. Supp. Ct. July 14, 2000).

194 TEXAS WESLEYAN LAW REVIEW [Vol. 16
Griffin v. Allstate Insurance Company, 52 a court of appeals in Washington
held an insurer may be responsible for pre-tender defense costs
where the insurer is not prejudiced by the late notice. 53
B. Federal court opinions regarding pre-tender costs
Like their state court counterparts, several federal courts have held
the prejudice analysis should apply to pre-notice/pre-tender defense
costs. In Peavey v. M/VANPA, the Fifth Circuit Court of Appeals,
applying Louisiana law, held in cases where timely notice is not a condition
precedent, an insurer must demonstrate it was sufficiently
prejudiced by the insured’s late notice. 54 The Peavey court also concluded
that attorney’s fees incurred prior to the notice to the insurer
were recoverable where the insurer benefited from and relied on the
attorney’s efforts prior to notification. 55 In TPLC, Inc. v. United National
Insurance Company, the Tenth Circuit Court of Appeals, applying
Pennsylvania law, concluded pre-notice costs were reimbursable
except when the insurer could show prejudice. 56
Other federal courts have allowed pre-notice costs. For example, a
Massachusetts federal court held Massachusetts law did not exclude
pre-notice costs absent prejudice. 57 A New York federal court held an
insurer was liable for the cost of defense “from the time each case or
claim is brought,” not from the time each claim is tendered. 58 Further,
in Pennsylvania insurers must reimburse the insured for payments the
insured made before giving notice to the insurer unless the insurer can
prove it was prejudiced because such payments were unnecessary or
too high. 59
A federal court in Tennessee has held pre-tender costs are reimbursable
unless the insurer can show prejudice. 60 In that case, the federal
district court stated that Tennessee had “adopted the modern
trend” and no longer treated notice as a condition precedent to coverage.
61 The Smith court then held:
In a state where the duty to notify “is merely a covenant that, absent
a showing of prejudice, does not excuse the insurer from com-
52. Griffin v. Allstate Ins. Co., 29 P.3d 777, 777 (cited with approval by Truck Ins.
Exch. v. Vanport Homes, Inc., 58 P.3d 276, 281 n.5 (Wash. 2002)).
53. Id. at 781–82.
54. Peavey Co. v. M/V ANPA, 971 F.2d 1168, 1173 (5th Cir. 1992).
55. Id. at 1178.
56. TPLC, Inc. v. United Nat’l Ins. Co., 44 F.3d 1484, 1493 (10th Cir. 1995).
57. Liberty Mut. Ins. Co. v. Black & Decker Corp., 383 F. Supp. 2d 200, 207–08
(D. Mass. 2004).
58. Burroughs Wellcome Co. v. Commercial Union Ins. Co., 713 F. Supp. 694, 697
(S.D.N.Y. 1989).
59. Harrisburg Area Cmty. Coll. v. Pac. Employers Ins. Co., 682 F. Supp. 805,
807–12 (M.D. Pa. 1988).
60. Smith & Nephew, Inc. v. Fed. Ins. Co., No. 02-2455 B., 2005 WL 3434819, at *3
(W.D. Tenn. Dec. 12, 2005).
61. Id. at *1.

2010] RECOVERY OF PRE-NOTICE DEFENSE COSTS 195
plying with its duty to defend, the logic of such a holding becomes
significantly attenuated, for it creates a time gap between the insurer’s
right to control the defense and its duty to provide one.” If
the Court were to adopt such reasoning, upon the filing of the underlying
complaint, the insurer would have a right to control the
defense but no duty to defend until notice was provided . . . Because
notice is not a condition precedent to coverage absent prejudice . . .
the Court finds that pre-tender notice costs are not per se excluded,
but subject to prejudice analysis. 62
Based on its analysis, the Smith court approved the award of reasonable
pre-tender fees and expenses. 63
C. Application
Because of the Supreme Court of Texas’s holding in PAJ that notice
provisions are covenants and not conditions precedents, it is likely
Texas courts will apply the PAJ holding to pre-notice defense costs in
the same way the Smith court applied the prejudice analysis from the
Tennessee Supreme Court in Alcazar. Where an insurer cannot establish
it was prejudiced by late notice of a claim, all costs, including pretender
defense costs, should be recoverable. 64
VI. PRE-PAJ ARGUMENTS AND CASES SUPPORTING DENIAL OF
PRE-TENDER COSTS
There is no Texas Supreme Court precedents regarding recovery of
pre-tender defense costs and the few Texas court cases that discuss the
issue were decided before PAJ. Insurers often offer two justifications
for denying pre-notice defense costs. The first justification is the duty
to defend does not arise until the insurer receives notice; the second
justification is pre-tender defense costs are excluded under the voluntary
payment provisions of the typical policy. 65
A. Texas cases regarding pre-tender costs decided before PAJ
The three cases often cited by Texas insurers to deny pre-tender
defense costs are E&L Chipping Company v. Hanover Insurance
Company; Nagel v. Kentucky; and LaFarge Corporation v. Hartford
Casualty Insurance Company. Each of these cases is distinguishable
from a post-PAJ demand for pre-tender defense costs.
62. Id. at *3 (citing Sherwood Brands, Inc. v. Hartford Accident & Indem. Co.,
698 A.2d 1078, 1084 (Md. 1997)) (citations omitted).
63. Id.
64. See id.
65. See Klein, supra note 3, at 1106.

196 TEXAS WESLEYAN LAW REVIEW [Vol. 16
In E&L Chipping Company, Inc. v. Hanover Insurance Company,
the Beaumont Court of Appeals treated notice as a condition precedent.
66 That court found:
An insured generally is not entitled to reimbursement of the defense
costs it voluntarily incurred before notifying the insurer of the
suit. Because an insurer’s duty to defend is triggered by notice, the
insurer has no duty to reimburse the insured for defense costs incurred
before the insured gave the insurer notice of the lawsuit. 67
The holding that notice provisions are a condition precedent under
E&L Chipping is no longer good law after the Texas Supreme Court’s
holding in PAJ that notice provisions are covenants. 68
In Nagel v. Kentucky Central Insurance Company, the Austin Court
of Appeals held the doctrine of quantum meruit69 did not require reimbursement
for pre-notice defense costs. 70 Nagel is a correct proposition
of law because quantum meruit is an equitable theory of
recovery based on an implied contractual agreement; 71 however,
quantum meruit did not apply because Nagel involved an actual contract.
72 Thus, any discussion of pre-notice defense costs in Nagel is
obiter dictum73 and gives no valid guidance for the recovery of pretender
defense costs.
Another oft-cited case is LaFarge Corporation v. Hartford Casualty
Insurance Company, in which the Fifth Circuit, applying Texas law,
held pre-tender costs were per se excluded from recovery where a
“voluntary payment” provision of a policy precluded liability for such
costs. 74 In reaching this conclusion, the court noted an insurer’s duty
to defend an action did not attach until notice alleging a potentially
covered claim was tendered to the insurer. 75 Because there was no
duty on the insurer to defend until notice was provided, the Fifth Circuit
reasoned the insurer could not be held liable for defense costs
66. E & L Chipping Co. v. Hanover Ins. Co., 962 S.W.2d 272, 278 (Tex. App.—
Beaumont 1998, no pet.).
67. Id.
68. See PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630, 636–37 (Tex. 2008).
69. Vortt Exploration Co. v. Chevron U.S.A., 787 S.W.2d 942, 944 (Tex. 1990).
70. Nagel v. Ky. Cent. Ins. Co., 894 S.W.2d 19, 21 (Tex. App.—Austin 1994, writ
denied).
71. See Vortt Exploration, 787 S.W.2d at 944 (holding quantum meruit is available
only if no express contract exists).
72. Nagel, 894 S.W.2d at 21–22.
73. See Edwards v. Kaye, 9 S.W.3d 310, 314 (Tex. App.—Houston [14th Dist.]
1999, pet. denied) (holding “[d]ictum is an observation or remark made concerning
some rule, principle, or application of law suggested in a particular case, which observation
or remark is not necessary to the determination of the case. . . . [and] is not
binding as precedent under stare decisis”) (citation omitted); see also Nichols v. Catalano,
216 S.W.3d 413, 416 (Tex. App.—San Antonio 2006, no pet.); In re Mann, 162
S.W.3d 429, 434 (Tex. App.—Fort Worth 2005, no pet.).
74. Lafarge Corp. v. Hartford Cas. Ins. Co., 61 F.3d 389, 399 (5th Cir. 1995).
75. Id. at 400; see also Members Ins. Co. v. Branscum, 803 S.W.2d 462, 467 (Tex.
App.—Dallas 1991, no writ).

2010] RECOVERY OF PRE-NOTICE DEFENSE COSTS 197
incurred before the insurer’s duty attaches. 76 The court rejected the
plaintiff’s argument that pre-tender costs were recoverable absent a
showing of prejudice and held prejudice was not required in consideration
of pre-tender costs. 77 After PAJ, the LaFarge holding is no
longer good law because PAJ expressly held the failure to provide
timely notice is a covenant, not a condition precedent, and as such will
not defeat coverage absent a finding of prejudice. 78
B. Insurer’s argument that the duty to defend
does not arise until notice
The first justification insurers use to deny pre-notice defense costs is
that the duty to defend does not arise until the insurer receives notice.
This argument fails to account for the genesis of when the duty attaches
and is based on the belief that notice is a condition precedent.
The argument supporting the first justification is “predicated upon
the notion that [the insurer’s] defense obligation is circumscribed by
the insured’s separate obligation to give notice, although the standard
form insuring agreement does not so provide.” 79 This argument also
“confuse[s] events which give rise to the duty to defend . . . and events
which give rise to an insurer’s breach of that duty . . . . The duty to
defend pre-exists any obligation on the part of the insured as to notice
. . . [and] arises when the underlying claim is brought and thus preexists
the insured’s obligation to notify its insurer of th[e] suit.” 80
Moreover, this justification is not responsive to the issue before the
insurer, which is whether the typical CGL policy requires the insurer
to pay for all defense costs of the suit, including pre-notice defense
costs. Finally, this argument is based on the assumption that notice is
a condition precedent to the insurer’s obligation to perform. 81 As a
result, this argument is no longer valid in Texas because the Supreme
Court of Texas now treats such notice provisions as covenants rather
than conditions. 82
76. Lafarge, 61 F.3d at 400.
77. Id. at 400 n.19.
78. See PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630, 636–37 (Tex. 2008).
79. Klein, supra note 3, at 1106; see also PAJ, 243 S.W.3d at 636 (“In the case of an
‘occurrence’ policy, any notice requirement is subsidiary to the event that triggers
coverage. Courts have not permitted insurance companies to deny coverage on the
basis of untimely notice under an ‘occurrence’ policy unless the company shows actual
prejudice from the delay.” (citing Matador Petroleum Corp. v. St. Paul Surplus Lines
Ins. Co., 174 F.3d 653, 658 (5th Cir. 1999)).
80. See Aetna Casualty & Surety Co. v. Dow Chem. Co., 44 F. Supp. 2d 847, 857
(E.D. Mich. 1997); see also Smith & Nephew, Inc. v. Fed. Ins. Co., No. 02-2455 B.,
2005 WL 3434819, at *2 (W.D. Tenn. Dec. 12, 2005).
81. See Lafarge, 61 F.3d at 399–400; see also Klein, supra note 3, at 1106.
82. See PAJ, 243 S.W.3d at 636–37.

198 TEXAS WESLEYAN LAW REVIEW [Vol. 16
C. Insurer’s argument that pre-tender costs are voluntary payments
The second justification insurers use to deny pre-notice defense
costs is that such costs are excluded under the voluntary payment provisions
of the typical policy. The second justification, however,
neither applies to defense costs nor withstands the required prejudice
analysis.
The typical voluntary payments policy provision, when “properly
construed, does not apply to defense costs at all; rather, the provision
is directed toward settlements to which the insurer has not consented.”
83 As noted by the Maryland Supreme Court:
The relevant question as to pre-notice expenses, to be tested against
the covenant not to incur unconsented to expenses, is whether the
insurer has been prejudiced [;] . . . was it reasonable, under the circumstances,
for the insured to have incurred the expense; was the
expense reasonable; did the expense materially exceed that which
the insurer would likely have incurred in any event had the notice
been given earlier? 84
In situations where the insurer pays for post-tender expenses and fees,
the insurer will be hard-pressed to argue the costs are unreasonable.
Furthermore, the insurer will have a difficult time arguing it was
prejudiced by reasonable expenses incurred by the insured prior to
tender when the insurer relies on the defense that was provided. 85
D. Application
Even though PAJ and its progeny are silent with regard to the obligation
for pre-tender costs, the logical conclusion from the holdings is
that pre-tender defense costs are also subject to a prejudice analysis.
This is because the Supreme Court of Texas concluded notice is a covenant
to coverage. 86 Such treatment is important because a party’s
breach of a covenant excuses the non-breaching party’s performance
only when the breach is material to the contract as a whole. 87 On the
other hand, breach of a condition precedent excuses performance altogether.
88 With PAJ, Prodigy, and XL Specialty, the Supreme Court
of Texas abrogated prior Texas precedents holding notice provisions
are conditions that excuse performance irrespective of prejudice. As a
result, an insurer’s reliance upon E&L Chipping Company v. Hanover
Insurance Company; Nagel v. Kentucky; and LaFarge Corporation v.
Hartford Casualty Insurance Company is no longer legitimate.
83. Klein, supra note 3, at 1106.
84. Sherwood Brands, Inc. v. Hartford Accident & Indem. Co., 698 A.2d 1078,
1086 (Md. 1997).
85. Peavey Co. v. M/V ANPA, 971 F.3d 1168, 1173 (5th Cir. 1992).
86. See PAJ, 243 S.W.3d at 636.
87. See Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 692 (Tex. 1994).
88. Hohenberg Bros. Co. v. George E. Gibbons & Co., 537 S.W.2d 1, 3 (Tex.
1976).

2010] RECOVERY OF PRE-NOTICE DEFENSE COSTS 199
VII. CONCLUSION
Although the Supreme Court of Texas did not specifically answer
the question of whether pre-tender defense costs are recoverable, the
decision to interpret timely notice provisions as covenants rather than
conditions opens the door in Texas for the recovery of pre-tender
costs.
Applying a prejudice analysis to the scenario described in Section I,
the subcontractor should recover pre-tender defense costs because the
insurer was not prejudiced by the delay. In that scenario, the subcontractor
was not aware of its right to a defense, indemnity, or additional
insured status until November 1, 2009. 89 At that time, the subcontractor
received the contract between the operator and driller, and
promptly tendered its demand for defense, indemnity, and treatment
as an additional insured. 90 In the intervening eight months, the subcontractor
paid for its own defense, completed written discovery,
hired experts, and participated in depositions, all while the driller’s
insurer benefited from and relied on these defense efforts.
The defense by private counsel accomplished all that a defense by
the insurer would have accomplished because the insurer would have
to complete all of the same tasks as if it had conducted the defense
from the inception of the suit. 91 Consequently, it will be challenging
for the insurer to establish that it was prejudiced by the timing of the
tender. In such a case, the subcontractor should be entitled to all attorney’s
fees and costs expended from the inception of the suit to the
date of tender. 92
89. See, e.g., Allstate Ins. Co. v. Darter, 361 S.W.2d 254, 255 (Tex. Civ. App.—Fort
Worth 1962, no writ).
90. See, e.g., Cent. Sur. & Ins. Corp. v. Anderson, 446 S.W.2d 897, 902 (Tex. Civ.
App.—Fort Worth 1969, no writ).
91. See Costagliola v. Lawyers Title Ins. Corp., 560 A.2d 1285, 1289–90 (N.J.
Super. Ct. Ch. Div. 1988); see also Klein, supra note 3, at 1104 (“Where an insured
defends itself effectively and efficiently in the period prior to notice, the insurer benefits
from the insured’s efforts-indeed, had it received notice earlier, the insurer may
well have taken the very same measures.”).
92. See Peavey Co. v. M/V ANPA, 971 F.3d 1168, 1173 (5th Cir. 1992); see also
Klein, supra note 3, at 1104.

SOME PEOPLE JUST SHOULDN’T HAVE
KIDS!: PROBATION CONDITIONS LIMITING
THE FUNDAMENTAL RIGHT TO PROCREATE
AND HOW TEXAS COURTS SHOULD
HANDLE THE ISSUE
By Kellie Brady
I.
TABLE OF CONTENTS
INTRODUCTION.......................................... 225 R
II. THE ROOTS OF THE FUNDAMENTAL RIGHT TO
PROCREATE ............................................. 226 R
III. HISTORY OF PROBATION IN GENERAL .................. 227 R
A. Federal Probation System in General ................ 228 R
B. State Probation Systems in General ................. 229 R
IV. TEXAS PROBATION SYSTEM ............................. 230 R
A. Basic Probation Conditions under the Texas Code of
Criminal Procedure, Article 42.12, Section 11 ....... 231 R
B. Length of Probation in Texas ....................... 232 R
C. Judicial Discretion in Modifying, Reducing, or
Terminating Probation .............................. 233 R
V. NATIONAL TREATMENT OF PROBATION CONDITIONS
LIMITING THE RIGHT TO PROCREATE................... 234 R
A. Overturning Probation Conditions that Restrict
Procreation ......................................... 234 R
B. Upholding Probation Conditions that Restrict
Procreation ......................................... 237 R
C. Why the Split of Authority? ......................... 240 R
VI. TEXAS COURTS’ STAND ON LIMITING FUNDAMENTAL
RIGHTS THROUGH PROBATION ......................... 242 R
A. How has Texas Handled Restrictions on
Fundamental Rights in the Past? .................... 243 R
B. How Should Texas Handle Restrictions on the
Fundamental Right to Procreate in the Future? ...... 245 R
VII. CONCLUSION ............................................ 247 R
I. INTRODUCTION
“When the average person hears a story of a mom who failed to
protect a child, their instinct is that she doesn’t deserve to have a
child. But, we don’t get to decide that for her.” 1 This statement,
1. Posting of Dan Slater to The Wall Street Journal Law Blog, http://blogs.wsj.
com/law/2008/09/25/less-child-abuse-fewer-criminals-sizing-up-a-no-pregnancy-order/
(Sept. 25, 2008, 12:21 EST).
225

226 TEXAS WESLEYAN LAW REVIEW [Vol. 16
made by a prosecutor in the case of Felicia Salazar, epitomizes the
feelings of many legal scholars throughout the country and the holdings
of many courts as well. However, Judge Baird in Travis County,
Texas did just what the prosecution said he could not. And with no
objection by Felicia Salazar, the offender in the case, Judge Baird’s
order stands. Salazar was sentenced to community supervision for ten
years, one of her conditions being that she is not allowed to have any
more children. 2
This Comment focuses on the ability of a judge to limit the fundamental
rights of a probationer through the imposition of probation
conditions; more specifically, the ability of judges to limit the fundamental
right to procreate. Although courts across the nation are split
on the issue, Texas courts could have addressed this as recently as September
2008 when Salazar’s case came before the Travis County court.
But, with no objection, and consequently no appeal, the trial court’s
order will stand as issued.
This Comment will start with a brief history—the history behind the
fundamental right to procreate and the history of probation throughout
the country, first looking at the federal system and then the state
systems in general. This Comment continues by examining how the
courts across the nation have treated the issue of limiting the fundamental
right to procreate. Because Texas has no established precedent
examining the constitutionality of conditions of probation that
limit the right to procreate, cases that limit other fundamental rights
will be examined to see if a natural analogy can be made. Finally, this
Comment will conclude with an analysis of how Texas courts should
treat the issue when faced with it in the future. And realistically, they
will definitely have that opportunity.
II. THE ROOTS OF THE FUNDAMENTAL RIGHT TO PROCREATE
It has been almost 50 years since the United States Supreme Court
recognized that the fundamental right to privacy exists implicitly in
the United States Constitution. 3 Griswold v. Connecticut involved a
medical clinic that gave information on the use of birth control to
married people. 4 The distribution of the material violated statutes
that limited the ability to make personal contraceptive decisions. 5
Upon review by the U.S. Supreme Court, the Court struck down the
law and held that there is a zone of privacy that is implied in the First,
2. Posting of Dan Slater to The Wall Street Journal Law Blog, http://blogs.
wsj.com/law/2008/09/12/can-a-judge-order-a-woman-to-stop-having-childen/ (Sept. 12,
2008, 13:38 EST).
3. Griswold v. Connecticut, 381 U.S. 479 (1965).
4. Id. at 480.
5. See id.

2010] LIMITING THE RIGHT TO PROCREATE 227
Third, Fourth, Fifth, and Ninth amendments contained in the Bill of
Rights. 6
Although Griswold was pivotal in the establishment of the right to
privacy, the U.S. Supreme Court recognized the right to procreate in a
decision handed down over 20 years before in the case of Skinner v.
Oklahoma. 7 Even though the decision was based on equal protection
grounds and not a fundamental rights analysis, the Court stated that
“marriage and procreation are fundamental to the very existence and
survival of the [human] race.” 8 This very statement has long been regarded
as the point in which the courts determined that the right to
procreate qualifies as a fundamental right protected under the United
States Constitution.
The U.S. Supreme Court later examined the fundamental right to
procreate as one facet of the right to privacy enumerated in the Griswold
case. Following up on the Griswold decision, in a landmark decision
by the U.S. Supreme Court in Roe v. Wade, the Court
acknowledged that the “right of personal privacy, or a guarantee of
certain areas or zones of privacy, does exist under the Constitution.” 9
The Court further stated that this right to privacy is broad enough to
cover the woman’s right to choose whether she will continue or terminate
a pregnancy. 10 However, the Court qualified its holding by
claiming that this right is not absolute and is still subject to limitations
imposed through state regulation. 11
III. HISTORY OF PROBATION IN GENERAL
One of the most recent and glaring ways the states have been limiting
fundamental rights is through the imposition of certain terms of
probation. Probation, also known as “community supervision” in
some states, has long been an alternative to the imposition of criminal
sentences that require imprisonment. The use of probation emerged
long ago during the late nineteenth century, first originating with the
states and then, in the early twentieth century, the federal systems
followed suit. 12
During this same time period, John Augustus, credited by many as
the “founder of probation in the United States,” began bailing people
out of jail and taking responsibility for them as they were released
6. Id. at 484.
7. Skinner v. Oklahoma, 316 U.S. 535, 541 (1942).
8. Id.
9. Roe v. Wade, 410 U.S. 113, 152 (1973).
10. Id. at 153.
11. Id.
12. Beginnings of Probation and Pretrial Services, http://www.uscourts.gov/fedprob/history/beginnings.html
(last visited Oct. 2, 2009) [hereinafter Beginnings of Probation
and Pretrial Services].

228 TEXAS WESLEYAN LAW REVIEW [Vol. 16
back into the community. 13 However, not everyone was given the opportunity
to be one of Augustus’s “probationers,” as Augustus was
very selective with whom he bailed out. 14 Because this was considered
one of the first attempts at releasing offenders into the community
under supervision, usually only first-time offenders and those not
“wholly depraved of heart” were given the opportunity to partake in
the program. 15 As a result, probation became recognized by many
courts and state statutes as a rehabilitative, more than a punitive, form
of punishment. 16
A. Federal Probation System in General
Federal probation did not come about until many years after the
states had enacted statutes setting up formal probation systems. 17
However, prior to the enactment of formal probation in the federal
system in the early twentieth century, the courts were already using
suspended sentences as a form of probation. 18 In a 1916 case, the U.S.
Supreme Court decided that suspending sentences indefinitely was
unconstitutional and as a result, the legislature enacted the Probation
Act of 1925. 19 Although many bills supporting the imposition of probation
statutes were introduced beginning as early as 1909, it was not
until the Probation Act of 1925 that the federal system passed a law
allowing federal courts to suspend sentences and impose a term of
probation. 20
Currently, federal probation, oftentimes referred to as supervised
release, is subject to the restrictions of certain federal statutes as well
as the Federal Sentencing Guidelines Manual. Under the Federal
Sentencing Guidelines, the district courts are given wide discretion
when imposing conditions of supervised release. 21 However, such
conditions must meet certain criteria as outlined in 18 U.S.C.
§ 3583(d). 22 As with most probation statutes, the federal system can
only impose terms and conditions that are reasonably related to the
factors laid out in section 3583(d). 23 These factors include “(1) the
nature and circumstances of the offense; (2) the history and characteristics
of the offender; (3) the need for adequate deterrence; (4) the
13. Probation and Parole: History, Goals, and Decision-Making–Origins of Probation
and Parole, http://law.jrank.org/pages/1817/Probation-Parole-History-Goals-Decision-Making-Origins-probation-parole.html
(last visited Oct. 2, 2009).
14. Id.
15. Id.
16. Id.
17. Beginnings of Probation and Pretrial Services, supra note 12.
18. Id.
19. Id.
20. Id.
21. United States v. Paul, 274 F.3d 155, 164 (5th Cir. 2001).
22. Id.
23. Id. at 165.

2010] LIMITING THE RIGHT TO PROCREATE 229
need to protect society from future crimes of the offender; and (5) the
need to provide rehabilitative services to the offender.” 24 Historically,
federal courts have focused on factors (3) and (4) when analyzing
whether a condition limiting the liberties of the offender will be upheld
or not. 25 When imposing conditions, the federal courts also must
be careful not to impose conditions that result in a “greater deprivation
of liberty than what is reasonably necessary” to meet the specific
goals of probation. 26
B. State Probation Systems in General
Much like the federal system of supervised release, each state has
implemented a probation system to handle the offenders it releases
into the community each year. Massachusetts became the first state to
implement a system of probation in 1878 and many other states followed
its lead and created probation systems in the early twentieth
century. 27 By 1951, all states in the country had some form of a working
probation system. 28
Through their respective legislatures, each state created a statute
requiring judges to impose mandatory conditions on probationers; for
example, offenders are prohibited from committing any other criminal
offense during the term of probation. 29 Mandatory conditions apply
to all offenders. 30 Additionally, many state statutes provide discretionary
conditions that the judge may impose at his will. Typically, the
statutes state that the discretionary conditions listed are non-exhaustive
and allow for the imposition of any other condition the judge
deems reasonable. 31 The majority of states have followed the approach
of the federal system and required that discretionary condi-
24. Id.
25. See United States v. Crandon, 173 F.3d 122, 128 (3d Cir. 1999) (holding that a
condition that limited access to computers was constitutional because it was related to
deterrence and protecting the public); United States v. Bortels, 962 F.2d 558, 559–60
(6th Cir. 1992) (per curiam) (holding that a no-contact condition was constitutional as
it related to rehabilitation and protecting the public); United States v. Trainer, 265 F.
Supp. 2d 589, 594 (D. Md. 2003) (holding that a condition limiting involvement with a
particular group is constitutional because it is related to rehabilitation and
deterrence).
26. Paul, 274 F.3d at 165.
27. Beginnings of Probation and Pretrial Services, supra note 12.
28. History of Probation: Origins and Evolution, http://www.spiritus-temporis.
com/probation/history-of-probation-origins-and-evolution.html (last visited Aug. 30,
2009).
29. United States Probation Officer’s Role, http://www.uscourts.gov/fedprob/officer/probation.html
(last visited Aug. 30, 2009).
30. Id.
31. See, e.g., CAL. PENAL CODE § 1203.1(j) (West 2004); FLA. STAT. ANN.
§ 948.03(1) (West Supp. 2009); IND. CODE ANN. § 35-38-2-2.3(a) (West 2004); OHIO
REV. CODE ANN. § 2951.02(c) (West 2002); OR. REV. STAT. §§ 137.540(1)–(2) (2007);
TEX. CODE CRIM. PROC. ANN. art. 42.12 § 11(a) (Vernon Supp. 2008); WIS. STAT.
ANN. § 973.09(1)(a) (West Supp. 2003).

230 TEXAS WESLEYAN LAW REVIEW [Vol. 16
tions imposed by a judge must be reasonable and related to the goals
of rehabilitating the offender and protecting the public. 32
IV. TEXAS PROBATION SYSTEM
Like many other states, Texas created a system of probation
through the legislative enactment of specific statutes designed to oversee
the release of offenders into the community. 33 Texas’s adult probation
system, commonly referred to as community supervision, was
essentially created by the 65th legislature in 1977 when they approved
the formation of the Texas Adult Probation Commission. 34 However,
the Commission was short lived. In 1989, the Texas Legislature consolidated
the Commission and a few other agencies into what is now
known as the Texas Department of Criminal Justice (TDCJ). 35
Under the TDCJ, the Community Justice Assistance Division
(CJAD) is responsible for maintaining and regulating all community
supervision departments throughout the state of Texas. 36 These
“CSCD’s,” as they are commonly referred to, have the direct responsibility
of providing community supervision services to the offenders. 37
Community Supervision Officers have the task of putting together an
adequate rehabilitation plan and providing services that will aid the
offender in rehabilitation. 38 Of course, these service plans include all
the conditions stipulated by the court. 39
Additionally, Texas trial courts are given immense discretion when
imposing conditions of probation. 40 Expressly stated in Article 42.12
of the Texas Code of Criminal Procedure is the legislature’s intention
that the responsibility of determining the conditions of community supervision
be placed wholly within the courts of the state. 41 Texas case
32. Howland v. State, 420 So. 2d 918, 919 (Fla. Dist. Ct. App. 1982); State v. Mosburg,
768 P.2d 313, 314 (Kan. Ct. App. 1989); People v. Pointer, 151 Cal. App. 3d
1128, 1136 (Ct. App. 1984); Rodriguez v. State, 378 So. 2d 7, 9 (Fla. Dist. Ct. App.
1979; State v. Talty, 103 Ohio St. 3d 177, 2004-Ohio-4888, 814 N.E.2d 1201, 6; State
v. Kline, 963 P.2d 697, 699 (Or. Ct. App. 1998); State v. Oakley 2001 WI 103,
11–12, 245 Wis. 2d 447, 459–60, 629 N.W.2d 200, 205–06); Trammell v. State, 751
N.E.2d 283, 288 (Ind. Ct. App. 2001).
33. TEX. CODE CRIM. PROC. ANN. art. 42.12 (Vernon Supp. 2008).
34. A History of Texas Community Justice Assistance Division, http://www.lib.
utexas.edu/taro/tslac/20144/tsl-20144.html (last visited Sept. 7, 2009).
35. Id.
36. Tex. Department of Criminal Justice, Community Justice Assistance Division,
What We Do: The Role of the Division, http://www.tdcj.state.tx.us/cjad/cjad-what.htm
(last visited Sept. 7, 2009).
37. Texas Department of Community Justice, Community Justice Assistance Division,
Who We Serve: Community Supervision and Corrections Departments, http://
www.tdcj.state.tx.us/cjad/cjad-whoserve.htm (last visited Oct. 24, 2009).
38. Id.
39. Id.
40. Fielder v. State, 811 S.W.2d 131, 134 (Tex. Crim. App. 1991).
41. TEX. CODE CRIM. P. ANN. art. 42.12 § 1 (Vernon Supp. 2008).

2010] LIMITING THE RIGHT TO PROCREATE 231
law has continued to hold that the trial courts possess the inherent
authority to set all reasonable conditions of probation. 42
A. Basic Probation Conditions under Texas Code of Criminal
Procedure, Article 42.12, Section 11
Under the Texas Code of Criminal Procedure, a judge may impose
any reasonable condition, as long as the condition is designed to protect
or restore the victim or community, and is designed to punish,
rehabilitate, or reform the offender. 43 The Texas Code of Criminal
Procedure also states that the judge may include, but shall not be limited
to, any of the basic conditions listed in section 11(a). 44 The word
“may” implies that the judge has discretion to impose any of the conditions
listed, such as not committing any additional criminal offense,
not associating with specified persons, and seeking suitable employment.
45 However, the Texas Legislature expanded the judge’s authority
by including the phrase “but shall not be limited to” in section 11.
This phrase gives the judge authority to impose any reasonable condition
not listed in section 11, so long as the condition is designed to
protect or restore the victim or community and to punish, rehabilitate,
or reform the offender. 46
When creating section 11 of the Texas Code of Criminal Procedure
Article 42.12, the legislature specifically addressed the issue of limiting
the fundamental right to procreate, as brought forth in the landmark
U.S. Supreme Court case of Skinner v. Oklahoma. 47 Under section
11(f), a judge in Texas may not impose any condition of community
supervision that requires an offender to undergo an “orchiectomy,” a
common medical term for castration or sterilization. 48 Under an
orchiectomy, the ability to reproduce would be terminated and the
offender completely stripped of his fundamental right to procreate
forever. 49 By adding section 11(f), the legislature expressly forbids
any condition ordering the permanent deprivation of the right to procreate.
However, the legislature did not expressly forbid probation
conditions that merely limit or restrict the right to procreate for a
specified period of time.
42. Fielder, 811 S.W.2d at 134.
43. Art. 42.12 § 11(a).
44. Id.
45. Art. 42.12 § 11(a)(1), (3), (6).
46. Art. 42.12 § 11.
47. Skinner v. Oklahoma, 316 U.S. 535 (1942).
48. Art. 42.12 § 11(f); see also WEBSTER’S NEW WORLD COLLEGE DICTIONARY
952 (3d ed. 1997).
49. See WEBSTER’S NEW WORLD COLLEGE DICTIONARY, supra note 48.

232 TEXAS WESLEYAN LAW REVIEW [Vol. 16
B. Length of Probation in Texas
Texas Code of Criminal Procedure Article 42.12, section 3(b)(1) allows
a judge to impose a maximum term of community supervision of
ten years for felony convictions, subject to the extensions allowed in
section 22(c). 50 Texas is one of the few, if not the only state that allows
such a long term of community supervision. 51 Until 2007, Texas
probation terms were on average 67% higher than the average for all
states nationwide. 52 In 2005, after years of attempts at probation reform,
the 79th Legislature passed House Bill 2193 which, among other
things, would have limited the maximum term of probation for certain
third-degree felonies from ten years to five years. 53 Governor Perry
vetoed this bill shortly thereafter. 54 Fortunately, this was not the end
for probation reform. In 2007, the Texas Legislature passed House
Bill 1678, which was signed by Governor Perry later that year. 55
House Bill 1678, which took effect on September 1, 2007, slightly
modified the current probation system. 56 As a result of House Bill
1678, the maximum term for probation remained ten years for most
felony offenses, while the maximum term was reduced to five years
for offenses against property and for drug-related offenses. 57 Additional
revisions made to Article 42.12 provide that the judge is now
required to review the offender’s record after the offender serves onehalf
of the community supervision term or two years, whichever is
longer. 58
Even with the changes made under House Bill 1678 to Article 42.12,
community supervision in Texas has not changed dramatically. Judges
continue to impose ten-year community supervision terms regularly. 59
It is only those third-degree felony convictions that fall under Title 7
50. Art. 42.12 §§ 3(b)(1), 22(c).
51. Nolan Hicks & Ingrid Norton, Probation May be a Problem in Texas’ Criminal
Justice System, THE DAILY TEXAN ONLINE, Nov. 14, 2006, http://www.criminaljustice
coalition.org/files/userfiles/Probation_may_be_a_problem_in_Texas.pdf.
52. ANN DEL LLANO & ANA YANEZ-CORREA, TEXAS LULAC, CRIMINAL JUS-
TICE POLICY BRIEF: PROVEN PRO-FAMILY CRIMINAL JUSTICE POLICIES THAT SAVE
FAMILIES, SAVE TAX PAYERS’ MONEY AND IMPROVE THE SAFETY OF OUR COMMU-
NITY 6 (2004), available at http://www.realcostofprisons.org/materials/LULAC.pdf.
53. Tex. H.B. 2193, 79th Leg., R.S. (2005).
54. Veto Message of Gov. Perry, Tex. H.B. 2193, H.J. of Tex., 79th Leg., R.S. 5899
(2005).
55. Tex. H.B. 1678, 80th Leg., R.S. (2007).
56. Id.
57. Id.
58. Id.
59. Bailey v. State, No. 09-07-545-2008-CR, 2008 WL 4509353, at *1 (Tex. App.—
Beaumont Oct. 8, 2008, no pet.) (mem. op., not designated for publication) (imposing
a term of five years community supervision for a conviction of robbery, a Title 7
crime); Vela v. State, No. 05-07-00149-CR, 2008 WL 1704369, at *1 (Tex. App.—Dallas
Apr. 14, 2008, pet. ref’d) (mem. op., not designated for publication) (imposing a
term of five years community supervision for possession of methamphetamine and
various other prescription drugs, a Chapter 481 crime).

2010] LIMITING THE RIGHT TO PROCREATE 233
of the Texas Penal Code and Chapter 481 of the Texas Health and
Safety Code that have been affected. 60 For those categories of thirddegree
felonies, the offender can now only receive a maximum of five
years community supervision, as opposed to the ten-year terms imposed
just a year before. 61
C. Judicial Discretion in Modifying, Reducing, or
Terminating Probation
Even though the length of probation terms have been modified
slightly through House Bill 1678, the judge still maintains discretion in
determining when, if at all, to reduce or terminate the offender’s period
of community supervision. 62 According to Article 42.12, section
20, at any time after the offender has completed one-third of the imposed
sentence, or a period of two years has lapsed, whichever is less,
the original judge has the discretion to reduce or terminate the remaining
period of community supervision. 63 Thus, even though Texas
has maximum probation terms higher than most states nationwide, the
judges have the discretion to review the offender’s record at the onethird
mark and, with the enactment of House Bill 1678, are now required
to revisit the original term of community supervision at the
halfway mark. 64
With the new requirement of judges to review the offender’s community
supervision record after one-half of the sentence is completed
or two years, whichever is more, Texas will likely see a drop in the
number of offenders that remain on community supervision for the
entire term. According to the Texas Public Policy Foundation, studies
have shown that once an offender is crime free for a period of seven
years, they are considered only as likely to commit another criminal
offense as a person who has had no criminal activity of record. 65 Additionally,
if the offender is crime free for a period of at least five
years, which is the point of review for most offenders that are sentenced
to the maximum term of community supervision, the studies
indicate that the likelihood of that offender committing another crime
is merely insignificant compared to someone with no prior criminal
60. Tex. H.B. 1678.
61. Ford v. State, 243 S.W.3d 112, 115 (Tex. App.—Houston [1st Dist.] 2007, pet.
ref’d) (imposing a sentence of 10 years community supervision for a conviction of
robbery, a Title 7 offense); Sheldon v. State, No. 12-06-00110-CR, 2006 WL 3459725,
at *1 (Tex. App.—Tyler Dec. 1, 2006, no pet.) (mem. op., not designated for publication)
(imposing a 10-year term of community supervision for a conviction of a thirddegree
felony DWI, a Chapter 481 offense).
62. Tex. H.B. 1678; TEX. CODE CRIM. PROC. ANN. art. 42.12 § 20 (Vernon Supp.
2008).
63. Art. 42.12 § 20.
64. Tex. H.B. 1678.
65. MARK LEVIN, TEXAS PUBLIC POLICY FOUNDATION, POLICY PERSPECTIVE:
TEN TALL TALES ABOUT TEXAS CRIMINAL JUSTICE REFORMS 1 (2008), http://
www.texaspolicy.com/pdf/2008-03-PP07-10tales-ml.pdf.

234 TEXAS WESLEYAN LAW REVIEW [Vol. 16
record. 66 From this data one can logically conclude that even though
an offender is sentenced to ten years of community supervision, if
they can make it through the first half of the term and complete all the
requirements set forth, the judge may, at his discretion, reduce or
even terminate the remainder of the community supervision.
V. NATIONAL TREATMENT OF PROBATION CONDITIONS LIMITING
THE RIGHT TO PROCREATE
Although Texas is recognized nationally as a state that is tough on
crime, the Texas courts have not had the opportunity to examine one
major issue that has come up in a few jurisdictions across the country.
In many cases where probation is imposed, at least one of the conditions
will limit a basic constitutional right. 67 Whether it be the right to
associate included in the First Amendment or the right to be free from
unreasonable search and seizure as protected by the Fourth Amendment,
the courts have consistently included conditions of probation
that limit these basic human rights. 68 Many states even include these
conditions as basic conditions of probation that the state applies to all
probationers. 69 A major conflict between courts shows up when the
judge imposes a probation condition that limits the fundamental right
to procreate, an issue that the Texas courts have so far avoided
deciding.
A. Overturning Probation Conditions that Restrict Procreation
When dealing with a probation condition that limits, or entirely
strips, a person of the fundamental right to procreate, courts across
the nation have been split on the issue of whether such a condition is
constitutional. Most courts have found that the condition is unconstitutional
and invalid when dealing with cases that have no connection
to either child abuse or failure to pay child support. 70 However, when
dealing with cases that involve children, mostly through child abuse or
non-support, the courts have taken an entirely different view.
66. Id.
67. See COMMUNITY JUSTICE ASSISTANCE DIVISION, TEXAS DEPARTMENT OF
CRIMINAL JUSTICE, TEXAS INTERMEDIATE SANCTIONS BENCH MANUAL 22 (2003),
available at http://www.tdcj.state.tx.us/PUBLICATIONS/cjad/Bench-Manual.pdf;
OHIO REV. CODE ANN. § 2929.15 (LexisNexis 2006); OR. REV. STAT. § 137.540
(2007); WIS. STAT. ANN. § 973.09 (West 2007).
68. Rodriguez v. State, 378 So. 2d 7, 9 (Fla. Dist. Ct. App. 1979).
69. See, e.g., CAL. PENAL CODE § 1203.1(j) (West 2004); FLA. STAT. ANN. § 948.03
(1) (West Supp. 2003); IND. CODE ANN. § 35-38-2-2.3(a) (2003); OHIO REV. CODE
ANN. § 2951.02(c) (West 2002); OR. REV. STAT. § 137.540(1)–(2) (2003); TEX. CODE
CRIM. PROC. ANN. art. 42.12 § 11(a) (Vernon Supp. 2008); WIS. STAT. ANN.
§ 973.09(1)(a) (West Supp. 2003).
70. See United States v. Bortels, 962 F.2d 558 (6th Cir. 1992); Wiggins v. State, 386
So. 2d 46, 48 (Fla. Dist. Ct. App. 1980); People v. Dominguez, 64 Cal. Rptr. 290 (Cal.
Ct. App. 1967).

2010] LIMITING THE RIGHT TO PROCREATE 235
The Supreme Court of Florida has recognized that a trial court may
impose any valid condition which serves a useful rehabilitative purpose.
71 In the case of Rodriguez v. State of Florida, 72 a Florida mother
pled to aggravated child abuse for hitting her nine-year-old child and
throwing her against a car, causing injuries to the child. 73 The Florida
trial court imposed a ten-year probation term in which Rodriguez was
prohibited from marrying and conceiving. 74 In addition, the court
prohibited Rodriquez from having custody of any children during the
probationary period. 75 Rodriguez challenged the constitutionality of
the conditions and the Florida Court of Appeals held that the conditions
relating to marriage and procreation, although constitutional, do
not meet the standard that the condition imposed must be reasonably
related to rehabilitation. 76
The Florida Court of Appeals addressed the issue again about three
years later in the case of Howland v. State of Florida. 77 Howland was
convicted of negligent child abuse and one of his conditions of probation
was that he not father any children during the five-year probation
term. 78 Like Rodriguez who was not allowed custody, Howland was
not allowed any contact with his child. 79 In both Rodriguez and Howland,
the Florida court stated that the condition prohibiting procreation
was constitutional but was not reasonable and is therefore
invalid. 80 The court reasoned that the other imposed conditions
served the purpose of keeping the offender away from children and
thus would prevent future criminality. 81 Both courts also did not address
what they would have ruled if the custody and contact conditions
were not imposed. Perhaps the court would have upheld a
condition limiting procreation if the trial court did not impose conditions
that limit custody and contact with children.
Merely a year after the Florida court decided Howland, the California
Court of Appeals faced a similar case in People v. Pointer. 82 The
State of California convicted Ruby Pointer of child endangerment and
violating a child custody decree when she refused to take her children
off a strictly macrobiotic diet, even at the direction of many doctors. 83
Pointer’s children were eventually removed from her care. Pointer
71. Rodriguez, 378 So. 2d at 9 (citing Hines v. State, 358 So. 2d 183, 185 (Fla.
1978)).
72. Id. at 7.
73. Id. at 8.
74. Id.
75. Id.
76. Id. at 9–10.
77. Howland v. State, 420 So. 2d 918 (Fla. Dist. Ct. App. 1982).
78. Id. at 919.
79. Id.
80. Rodriguez, 378 So. 2d at 9–10; Howland, 420 So. 2d at 919.
81. Howland, 420 So. 2d at 920; Rodriguez, 378 So. 2d at 10.
82. People v. Pointer, 199 Cal. Rptr. 357 (Cal. Ct. App. 1984).
83. Id. at 1131–32.

236 TEXAS WESLEYAN LAW REVIEW [Vol. 16
then kidnapped one child and fled the country. 84 Eventually, Pointer
was brought back to the United States and sentenced to five years
probation with one of the conditions being that she could not conceive
during the probationary period. 85 The California court first looked at
the reasonableness of the condition, stating that “[a] condition of probation
will not be held invalid unless it (1) has no relationship to the
crime of which the offender was convicted, (2) relates to conduct
which is not itself criminal, and (3) requires or forbids conduct which
is not reasonably related to future criminality.” 86 Upon looking at
these factors, the court stated that the probation condition was reasonable;
however, the court also stated that the condition was impermissibly
overbroad because less onerous conditions were available. 87
Indiana courts have also examined the condition of probation that
limits the right to procreate. In 2001, the Indiana Court of Appeals
decided the case of Trammell v. State of Indiana and stated that the
condition ordering Trammell not to become pregnant during her
eight-year probation term excessively impinges on her right to procreate
and serves no rehabilitative purpose. 88 The State of Indiana convicted
Kristie Trammell of neglect of a dependent in the death of her
infant son and sentenced to jail and an eight-year probation term
upon release. 89 The Indiana court told Trammell that she was not allowed
to become pregnant while on probation. 90 The court recognized
that it has broad discretion and may impose conditions that
impinge on a probationer’s exercise of a constitutionally protected
right. 91 The court did not use a special scrutiny analysis similar to the
California court in Pointer. Instead, the court stated that the condition
is analyzed through the balancing of three important factors; “(1)
the purpose probation is supposed to serve, (2) the extent to which the
constitutional rights of law abiding citizens should be given to probationers,
and (3) the legitimate needs of law enforcement.” 92 However,
the court did not address each factor individually but instead followed
the analysis of Pointer and held that the condition was overbroad in
that there were less restrictive means of carrying out the purpose of
the condition. 93
84. Id. at 1133.
85. Id.
86. Id. at 1138.
87. Id. at 1138–40.
88. Trammell v. State, 751 N.E.2d 283, 290–91 (Ind. Ct. App. 2001).
89. Id. at 286.
90. Id.
91. Id. at 288.
92. Id.
93. Id. at 289.

2010] LIMITING THE RIGHT TO PROCREATE 237
B. Upholding Probation Conditions that Restrict Procreation
Although the Ohio Supreme Court in State of Ohio v. Talty found
the condition limiting procreation invalid, the analysis in both the majority
and the dissenting opinions show that the case may have been
wrongly decided. 94 In Talty, the court found the defendant guilty of
not supporting his children and sentenced him to five years of community
control, which the Ohio Supreme Court equated to probation. 95
As a condition of Talty’s probation, the trial court ordered him to take
all reasonable steps to avoid conceiving another child. 96 On appeal,
the appellate court agreed with the trial court and held that the condition
was constitutional. 97 However, on the subsequent appeal to the
Ohio Supreme Court, the condition was struck down as overbroad using
the analysis of a prior Ohio Supreme Court case, State v. Jones. 98
One of the most interesting things about the Talty decision is that although
the condition was rendered overbroad, the court did not address
whether the condition would have been deemed valid if it
allowed for review or modification once Talty met the other conditions
of his probation. 99 The dissenting opinion by Justice Pfeifer
however, addressed this issue quite thoroughly.
Justice Pfeifer, an eleven-year veteran of the Ohio Supreme Court
and one of the dissenting Justices in the Talty decision, was very convincing
in his dissenting opinion. Justice Pfeifer stated that the majority
mistakenly used the Jones case and instead should have looked
directly at the statutory language of the Ohio community-control statutes
to make the decision. 100 The Ohio community-control statute allows
the judge to consider any condition that will protect the public
and punish the offender. 101 In doing so, the court should consider the
need for incapacitation, deterrence of the offender, and rehabilitation
of the offender. 102 According to Justice Pfeifer, the condition limiting
Talty’s procreative rights met all three of these factors. 103 Justice Pfeifer
also attacked the majority opinion on the overbroad argument and
stated that the Ohio Legislature enacted statutes that specifically provide
a mechanism to lift the prohibition, thus rendering moot one of
the major criticisms of the trial court’s decision. 104 Talty’s condition
could be reduced or terminated on review by the court upon comple-
94. State v. Talty, 103 Ohio St. 3d 177, 2004-Ohio-4888, 814 N.E.2d 1201, 25.
95. Id. 4, 814 N.E.2d at 1202.
96. Id. 4, 814 N.E.2d at 1202.
97. Id. 6, 814 N.E.2d at 1203.
98. Id. 25, 814 N.E.2d at 1207 (using the reasoning of State v. Jones, 550 N.E.2d
469 (Ohio 1990)).
99. Id. 21, 814 N.E.2d at 1205.
100. Id. 30–31, 814 N.E.2d at 1207–08 (Pfeifer, J., dissenting).
101. Id. 31, 814 N.E.2d at 1208.
102. Id. 31, 814 N.E.2d at 1208.
103. Id. 32, 814 N.E.2d at 1208.
104. Id. 34, 814 N.E.2d at 1209.

238 TEXAS WESLEYAN LAW REVIEW [Vol. 16
tion of a significant amount of his probationary sentence. 105 Finally,
Pfeifer addressed the majority’s dismissal of the Wisconsin Supreme
Court decision of State of Wisconsin v. Oakley. 106 The court in
Oakley, like many federal courts, stated that the standard of review—
strict scrutiny for most instances of fundamental rights—is merely a
reasonableness standard when involving probation conditions. 107 If
the majority had used the correct standard of review for this situation,
Talty’s condition would likely have been upheld. Pfeifer stated, in using
the words of the Wisconsin Supreme Court in Oakley, that a “condition
that infringes on the right to procreate during a term of
community control is not invalid under these facts.” 108
Although State of Wisconsin v. Oakley received criticism from some
courts, the majority of feedback this controversial decision has received
has been positive. Oakley involved a father of nine children by
four different women who intentionally failed to pay child support
and accumulated a large amount of arrearages. 109 The court sentenced
Oakley to prison and a five-year term of probation upon release.
110 As a condition of Oakley’s probation, the judge stated that
Oakley cannot have any more children without first demonstrating to
the court that he has the ability to support the children he already
has. 111 Upon review, the Wisconsin Court of Appeals, stated that the
condition was reasonable and not overly broad. 112 The Supreme
Court of Wisconsin agreed and issued one of the two main state-court
opinions—the other state being Oregon—sustaining the constitutionality
of probation conditions that limit the fundamental right to
procreate.
The Supreme Court of Wisconsin recognized that, through the intention
of the legislature in creating such a statute, the trial court is
given broad discretion in imposing individual conditions of probation.
113 In imposing conditions, the court must consider whether the
condition is overly broad and whether the condition is reasonably related
to the goals of rehabilitation. 114 The Wisconsin Supreme Court
rejected Oakley’s claim that because the condition is a restriction on
his fundamental right to procreate, it should be subject to strict scrutiny
analysis. 115 The court reasoned instead that if probation condi-
105. Id. 34, 814 N.E.2d at 1209.
106. Id. 35–36, 814 N.E.2d at 1209–10.
107. Id. 35–36, 814 N.E.2d at 1209–10 (citing State v. Oakley, 2001 WI 103, 16
n.23, 245 Wis. 2d 447, 16 n.23, 629 N.W.2d 200, 16 n.23).
108. Id. 36, 814 N.E.2d at 1210 (citing Oakley, 2001 WI 103, 16 n.23, 629
N.W.2d 200, 207).
109. Oakley, 2001 WI 103, 3, 5, 629 N.W.2d 200, 202.
110. Id. 6, 629 N.W.2d at 202–03.
111. Id. 6, 629 N.W.2d at 202–03.
112. Id. 7, 629 N.W.2d at 203.
113. Id. 12, 629 N.W.2d at 205.
114. Id. 19, 629 N.W.2d at 209.
115. Id. 16–17, 629 N.W.2d at 207–08.

2010] LIMITING THE RIGHT TO PROCREATE 239
tions were subject to strict scrutiny, then the court would also be
required to subject more restrictive alternatives, like incarceration, to
strict scrutiny since this obviously infringes on the right to liberty. 116
The court does however recognize that had Oakley not committed a
crime by intentionally refusing to pay child support, his argument
would have some merit. 117 However, because intentional failure to
pay child support is a criminal offense in the state of Wisconsin, the
court recognized the well-established notion that individuals that have
violated the law are not entitled to the same degree of liberty as lawabiding
citizens. 118
The Wisconsin Supreme Court then went on to analyze Oakley’s
situation using the reasonability standard employed by many other
courts when addressing the issue of probation conditions that infringe
on a fundamental right. 119 In applying the reasonability standard as
opposed to strict scrutiny, the court held that Oakley’s fundamental
right to procreate was not unconstitutionally restricted because it did
not completely eliminate Oakley’s right to procreate. 120 Oakley’s condition
will expire at the end of his eight-year probation term and at
that time, he is free to have more children. The court stated that the
condition is not overbroad and is in fact narrowly tailored to serve the
compelling state interest of having a parent support the children they
have. 121 Additionally, the court stated that the condition is reasonably
related to the rehabilitation of Oakley in that the condition will prevent
Oakley from adding victims should he continue to refuse to support
his children. 122 Thus, the condition will assist Oakley by banning
him from violating this specific law again. 123 Oakley has essentially
been given a chance to conform his conduct to the law, a chance he
may not have had if the judge had imposed a prison sentence instead
of the probation Oakley was granted.
In analyzing the correct standard to use when addressing the constitutionality
of Oakley’s procreation condition, the Wisconsin Supreme
Court relied in part on State of Oregon v. Kline, a 1998 case that handled
the issue of procreation conditions before the Wisconsin courts
did. 124 Much like Oakley, the Oregon Court of Appeals was faced
with determining the validity of a condition that limited the right of
the defendant to have children until he satisfied certain conditions of
probation. 125 Tad Kline was sentenced to 36 months probation after
116. Id. 17, 629 N.W.2d at 207.
117. Id. 17, 629 N.W.2d at 207.
118. Id. 17, 629 N.W.2d at 207.
119. Id. 19–20, 629 N.W.2d at 209–12.
120. Id. 20, 629 N.W.2d at 212.
121. Id. 20, 629 N.W.2d at 212.
122. Id. 21, 629 N.W.2d at 213.
123. Id. 21, 629 N.W.2d at 213.
124. State v. Kline, 963 P.2d 697, 699 (Or. Ct. App. 1998).
125. Id. at 699.

240 TEXAS WESLEYAN LAW REVIEW [Vol. 16
being convicted of criminal mistreatment in the first degree for the
injuries sustained by his daughter. 126 Kline admitted to bruising the
child and fracturing her leg because he was frustrated and “didn’t
know his own strength.” 127 On appeal, the court stated that the probation
condition imposed was reasonable in light of the potential of
harm to any children Kline might conceive in the future. 128 The court
also stated that the condition was not a permanent ban on Kline’s
right to reproduce because Kline has the ability to completely regain
this right with the completion of treatment. 129 The court finally stated
that the protection of the future potential victims allows the fundamental
right to be infringed to a permissible degree, as it is here. 130
One thing that the Ohio Supreme Court dissent, the Wisconsin Supreme
Court, and the Oregon Court of Appeals have in common is
the recognition of the need to protect the future victims of the offender.
In all three of these cases, children, defenseless by definition,
were the victims of their own biological parents. Without the conditions
of probation imposed in these cases, the future children of these
offenders are at greater risk of neglect or abuse. By imposing conditions
that limit the right to procreate, the state is acknowledging the
compelling interest of protecting children. By structuring conditions
to allow the offender to earn the right back during the probationary
period, the courts have tailored the condition narrowly enough as to
not completely strip the offender of his fundamental right, thus meeting
the reasonability standard necessary to impose such conditions.
C. Why the Split of Authority?
When examining how the states that have struck down procreation
conditions compare to Wisconsin and Oregon, the most glaring difference
in the way the courts treated the cases is the scrutiny applied.
Historically, fundamental rights have been subject to a strict scrutiny
analysis when the rights are infringed. 131 Under a strict scrutiny analysis,
the court must show that there is a compelling governmental interest
and the condition must be narrowly tailored to promote that
interest. 132 However, many states have recognized that the offender is
not afforded the same protection of fundamental rights as the law
abiding citizen. 133 As a result, many states have created their own
tests for determining whether a probation condition that violates a
fundamental right is valid.
126. Id. at 698–99.
127. Id. at 699.
128. Id.
129. Id.
130. Id.
131. See Roe v. Wade, 410 U.S. 113, 155 (1973).
132. Id.
133. State v. Oakley, 2001 WI 103, 17, 245 Wis. 2d 447, 17, 629 N.W.2d 200, 17
(2001).

2010] LIMITING THE RIGHT TO PROCREATE 241
While all states require that the condition be reasonably related to
the rehabilitation of the offender, not all states have employed the
same methods of analysis to reach their decisions. In Florida, the
courts require that in addition to the reasonable analysis, the condition
must not be unduly restrictive of liberty or freedom. 134 In Indiana,
the court stated that the purpose of the condition must not be
attainable by alternative restrictions less subversive of the imposed
condition. 135 California actually calls its test the “special scrutiny” test
and requires the condition be narrowly drawn, very similar to the
strict scrutiny analysis used for non-offenders. 136 And finally, in Talty,
the Ohio Supreme Court went ahead and used the strict scrutiny analysis
when reviewing Talty’s probation condition. 137 However, as
pointed out in the dissent, the Ohio Supreme Court applied the wrong
standard and thus, the courts should have held that the condition was
not overbroad and thus permissible. 138
Alternatively, when looking at the analysis of Oakley and Kline, it
seems that the Wisconsin Supreme Court and the Oregon Court of
Appeals used the correct scrutiny analysis when reviewing the conditions
in question. Wisconsin used the “reasonability standard” when
reviewing the condition limiting Oakley’s fundamental right to procreate.
139 However, when looking at the condition, the court used a
higher scrutiny and found that even though strict scrutiny is not required,
the condition still met the strict scrutiny standard of being narrowly
tailored to serve the state’s compelling interest. 140 In Kline, the
court simply rejected Kline’s argument that strict scrutiny was needed
when reviewing probation conditions that limit fundamental rights. 141
The court went on to say that as long as the condition did not impose
a total ban, it infringed on the fundamental rights to a permissible
degree. 142
Looking at the years in which these cases were decided, it seems
that the reasonability standard is becoming the modern trend. With
Kline and Oakley being decided in 1998 and 2001 respectively, only
Ohio, in the 2004 Talty decision, has produced an opinion that has
ruled the opposite way since then. And if the Ohio Supreme Court
employed the correct standard when determining the constitutionality
of Talty’s probation condition, as the dissent did in their analysis, the
134. Rodriguez v. State, 378 So. 2d 7, 9 (Fla. Dist. Ct. App. 1979).
135. Trammell v. State, 751 N.E.2d 283 (Ind. Ct. App. 2001).
136. People v. Pointer, 199 Cal. Rptr. 357 (Cal. Ct. App. 1984).
137. State v. Talty, 103 Ohio St. 3d 177, 2004-Ohio-4888, 814 N.E.2d 1201,
16–20.
138. Id. 34, 814 N.E.2d at 1209 (Pfeifer, J., dissenting).
139. State v. Oakley, 2001 WI 103, 19–20, 245 Wis. 2d 447, 19–20, 629 N.W.2d
200, 19–20 (2001).
140. Id. 19–20, 629 N.W.2d at 209–12.
141. State v. Kline, 963 P.2d 697, 699 (Or. Ct. App. 1998).
142. Id.

242 TEXAS WESLEYAN LAW REVIEW [Vol. 16
court would have likely upheld the condition. 143 This merely shows
that courts are becoming more and more aware of the need for conditions
that limit basic fundamental rights, when warranted by the conduct
of the offender of course.
VI. TEXAS COURTS’ STAND ON LIMITING FUNDAMENTAL RIGHTS
THROUGH PROBATION
In September 2008, in the Travis County court located in Austin,
Texas, District Judge Charlie Baird sentenced Felicia Salazar to a
community supervision term of ten years for failing to provide protection
and medical care for her then 19-month-old daughter. 144 The
child’s father, Roberto Alvarado, was sentenced to 15 years in prison
for beating the child so severely that she suffered broken bones and
other injuries. 145 The mother in this case, Salazar, did nothing to obtain
medical care for her child after the beating. The child has recovered
from her horrific injuries, and the parental rights of Salazar and
Alvarado have since been terminated. 146
Salazar was charged with injury to a child by omission and in addition
to the standard terms of community supervision, Salazar was told
to stop having children for her ten-year probationary period. 147 When
confronted by the media about his decision to impose such a term,
Judge Baird recognized Salazar’s fundamental right to reproduce and
thus could not order her to be sterilized. 148 However, Judge Baird
justified the imposition of the condition because under Texas law,
“judges can impose any condition, so long as it is reasonable.” 149
Even though Salazar’s case provides no precedential value to Texas,
because it is only a district court decision and thus is not mandatory
authority for Texas courts to follow, it seems likely a similar issue will
come up sometime in the near future. Neither Salazar, nor her attorney,
objected at the time the condition was imposed. 150 In Texas, conditions
not objected to at trial are accepted as terms of the contract
that is community supervision. 151 Thus, because Salazar, nor her attorney,
objected at the trial court level, the court will not address the
constitutionality of the condition should Salazar decide to appeal at a
later time.
143. State v. Talty, 103 Ohio St. 3d 177, 2004-Ohio-4888, 814 N.E.2d 1201, 35–36
(Pfeifer, J., dissenting).
144. Steven Kreytak, Judge Orders Woman Not to Have Any More Kids, AUSTIN
AMERICAN-STATESMAN, Sept. 12, 2008, at A1.
145. Id.
146. Id.
147. Id.
148. Slater, supra note 1.
149. Id.
150. Slater, supra note 2.
151. Speth v. State, 6 S.W.3d 530, 534 (Tex. Crim. App. 1999) (en banc).

2010] LIMITING THE RIGHT TO PROCREATE 243
A. How has Texas Handled Restrictions on Fundamental Rights in
the Past?
Texas Code of Criminal Procedure defines community supervision
as a suspension of a sentence. 152 The courts have gone on to state that
community supervision is an arrangement in lieu of a sentence, not a
part of a sentence. 153 The Texas Court of Criminal Appeals, in Speth
v. State, held that when community supervision is granted, it creates a
contractual relationship between the offender and the court. 154 The
court went on to say that because of the contractual nature of probation
in Texas, an offender can affirmatively waive unreasonable terms
by entering into a probation contract without objection. 155 Because
the Texas courts have held that the community supervision agreement
is more of a contract between the offender and the court, and not a
sentence under the Texas Code of Criminal Procedure, when an offender
agrees to complete community supervision, he or she is agreeing
to the terms set forth in the contract. 156
Texas courts have had the opportunity to address many different
fundamental rights cases, using three main factors in determining if
the conditions are valid or not. Such factors include whether the condition
is related to the crime, whether the condition related to conduct
that is not in and of itself criminal, and whether the condition forbids
conduct not reasonably related to the future criminality of the offender.
157 Using this analysis, the courts have many times held conditions
of probation that limit constitutional rights valid.
In the Texas Court of Appeals case of Marcum v. State of Texas, the
appellant argued that his First Amendment right to associate was unreasonably
infringed when the trial court placed a condition of probation
that required appellant have no contact with anyone under the
age of 17. 158 Because the appellant was convicted of aggravated sexual
assault of a child, the court stated that the condition satisfied all
three factors laid out above. 159 As recently as 2004, in the case of Belt
v. State of Texas, the Texas Court of Appeals once again reviewed a
no-contact condition requiring an offender convicted of aggravated
sexual assault to have no contact with children under 18 years old. 160
The court stated that the condition was valid as it directly related to
the offense and relates to the future criminality of the defendant. 161
152. TEX. CODE CRIM. PROC. ANN. art. 42.12 § 2(2)(B) (Vernon Supp. 2008).
153. Id. art. 42.12 § 3(a).
154. Speth, 6 S.W.3d at 533.
155. Id. at 534.
156. Id. at 533.
157. Marcum v. State, 983 S.W.2d 762, 768 (Tex. App.—Houston [14th Dist.] 1998,
pet. ref’d).
158. Id.
159. Id.
160. Belt v. State, 127 S.W.3d 277, 280 (Tex. App.—Fort Worth 2004, no pet.).
161. Id. at 286.

244 TEXAS WESLEYAN LAW REVIEW [Vol. 16
When the Texas Court of Appeals decided Belt, they used the analysis
from an earlier case that looked at the reasonableness of a probation
condition that limited the Fourth Amendment right to be free of
unreasonable searches and seizures. In McArthur v. State of Texas,
decided in 1999, the appellant was convicted of indecency with a child
and placed on ten years community supervision. 162 As a condition of
his community supervision, McArthur was required to allow the community
supervision officer to search and seize any sexually explicit
materials in his possession. 163 The court held, using the three factors
listed above, that the condition was valid and reasonably related to his
future criminality. 164
In another Texas Court of Appeals case, Ex Parte Renfro, the court
held that a condition of probation requiring that the appellant take
polygraph exams was reasonable and not a violation of his Fifth
Amendment right against self incrimination. 165 Renfro was convicted
of indecency with a child and was placed on community supervision
for ten years. 166 Renfro claimed the polygraph condition violated his
Fifth Amendment right and should thus be held invalid. The court
disagreed and, using the three factors in Marcum, held that the polygraph
helps monitor compliance and is thus reasonably related to
Renfro’s crime. 167
In all these cases, the court has upheld a condition of probation that
so obviously infringes on a constitutionally protected right. In each of
the Texas cases, the condition was not worded in a manner that allows
for the condition to be removed once a certain event takes place. The
condition will be imposed for the entire period of community supervision
and will only be modified or terminated upon successful completion
of the term or petition to the court allowed under Texas Code of
Criminal Procedure article 42.12, section 20. 168 However, in the cases
discussed regarding the imposition of conditions that limit the fundamental
right to procreation, the courts have stated that a mechanism
for which the prohibition can be lifted should be included or the condition
will be deemed overbroad. 169 Why then do the courts allow for
other rights to be restricted without such a mechanism in place? Have
the courts put the fundamental right to procreate above all other constitutionally
protected rights? Possibly. However, because Texas has
162. McArthur v. State, 1 S.W.3d 323, 327 (Tex. App.—Fort Worth 1999, pet. ref’d
2000).
163. Id. at 330.
164. Id. at 333.
165. Ex Parte Renfro, 999 S.W.2d 557, 560 (Tex. App.—Houston [14th Dist.] 1999,
pet. ref’d 2000).
166. Id. at 559.
167. Id. at 560.
168. TEX. CODE CRIM. PROC. ANN. art. 42.12 § 20 (Vernon Supp. 2008).
169. State v. Talty, 103 Ohio St. 3d 177, 2004-Ohio-4888, 814 N.E.2d 1201, 35–36
(Pfeifer, J., dissenting).

2010] LIMITING THE RIGHT TO PROCREATE 245
not been faced with the task of determining whether conditions that
limit the fundamental right to procreate are valid, we will have to wait
and see which approach the courts will follow.
B. How Should Texas Handle Restrictions on the Fundamental
Right to Procreate in the Future?
With conflicting case law from other states, and no Texas cases on
point, it would be interesting to know how Texas would have handled
Ms. Salazar’s case had she appealed. Should Texas follow the lead of
other states that have held the conditions invalid? Or maybe follow
the lead of Oregon and Wisconsin and hold the conditions valid.
There seems to be two clear paths that make sense for when Texas
courts are faced with this tough decision in the future.
First, as pointed out above, Texas has many times dealt with the
issue of fundamental rights being encroached through probation, or
community supervision conditions. It has been recognized throughout
the country that a probationer is only entitled to conditional liberty
dependent on certain imposed conditions. 170 The trial courts in Texas
have long used this notion when imposing conditions of probation. In
the future, should the Texas courts be faced with the task of determining
if a probation condition that limits the right to procreate is valid, it
would seem quite reasonable for them to analogize that case with the
many other cases discussed above. If Salazar had appealed her case,
and the court does analogize, it would seem the only reasonable holding
the court could make would be to find the condition a valid exercise
of judicial discretion and a valid condition of probation.
A reasonable alternative route is to follow the analysis of the dissenting
opinion of Justice Pfeifer in State of Ohio v. Talty. Even
though the offender in Talty is a father who failed to support his children,
and Salazar is a mother who failed to provide medical care for
her daughter, the two cases are very similar. 171 As Justice Pfeifer
points out, the main reason the majority deemed the condition invalid
was that there was no explicit mechanism for terminating the condition
had the relevant conduct changed. 172 Justice Pfeifer then points
out the statutory mechanism that is in place in Ohio, much like that
statutory mechanism in place in Texas. Under these statutes, the offender
is entitled to petition the court for modification or termination
of the condition of probation upon showing that she has completed
the other requirements imposed. 173 Because of this statute, the courts
170. McArthur v. State, 1 S.W.3d 323, 332 (Tex. App.—Fort Worth 1999, pet. ref’d)
(citing United States v. Tonry, 605 F.2d 144, 150–51 (5th Cir. 1979)).
171. Talty, 2004-Ohio-4888, 2, 814 N.E.2d at 1202; Kreytak, supra note 144.
172. Talty, 2004-Ohio-4888, 35–36, 814 N.E.2d at 1209–10 (Pfeifer, J., dissenting).
173. OHIO REV. CODE ANN. § 2929.15(C) (LexisNexis Supp. 2009); TEX. CODE
CRIM. PROC. ANN. art. 42.12 § 20 (Vernon Supp. 2008).

246 TEXAS WESLEYAN LAW REVIEW [Vol. 16
should not be required to explicitly state in the condition the means
for overcoming it. It is already established that the right exists in the
statutory law.
Finally, for all the courts who have stated that the condition causes
major problems with enforcement, that is not necessarily the case. By
simply adding the condition, courts are trying to proactively stop the
offender from committing another crime. If the courts tell the offender
she will be in violation of her probation upon having more children,
this does not coerce termination of the pregnancy, or abortion.
Should the offender become pregnant or father another child, most
courts would simply impose alternate conditions, such as parenting
classes and medical care. 174 It is highly unlikely, and absolutely a violation
of procreative rights, for the court to coerce or order abortion
of the fetus. 175 In addition, the offender would likely not even be subject
to a probation revocation resulting in jail time. 176 Texas case law
has shown that first time violators, whose violation is a technical violation
and not a criminal violation, like committing another crime, have
been shown leniency and not had their probation immediately
revoked. 177
Therefore, if the unfortunate case against Felicia Salazar had ever
reached the Texas Court of Appeals, it would be reasonable for the
court to have upheld the condition that Salazar not become pregnant
during her probation term. Judge Baird, by no means, stripped
Salazar of her right to procreate forever because she can petition for
modification after one third of her sentence is complete. 178 He is simply
imposing a condition of probation that satisfies all three factors
laid out in Marcum. 179 The condition relates to the crime Salazar was
convicted of because if she is allowed to have more children, they will
automatically be in danger simply by being born. The condition relates
to conduct that is criminal because if Salazar is allowed to have
children, the likelihood of her failing to provide adequate care is very
high. And finally, the condition relates to the future criminality of
Salazar because so long as she is not allowed to have more children,
the chances of her failing to provide care for them are very slim. Because
the condition meets this test, the court, if ever faced with a case
174. Contra State v. Mosberg, 768 P.2d 313, 315 (Kan. Ct. App. 1989).
175. Id. at 315 (citing People v. Pointer, 199 Cal. Rptr. 357 (Cal. Ct. App. 1984)).
176. Flournoy v. State, 589 S.W.2d 705, 709 (Tex. Crim. App. 1979).
177. Id. at 706 (allowing four violations before community supervision was revoked);
see also Brooks v. State, 153 S.W.3d 124, 125 (Tex. App.—Beaumont 2004, no
pet.) (allowing three violations of community supervision before revocation); Eisen v.
State, 40 S.W.3d 628, 630 (Tex. App.—Waco 2001, pet. ref’d) (allowing 5 violations
before revocation of probation); Gonzalez v. State, No. 05-02-01716-CR, 2003 WL
22072692, at *1 (Tex. App.—Dallas Sept. 8, 2003, no pet.) (not designated for publication)
(allowing four violations before revocation of probation).
178. TEX. CODE CRIM. PROC. ANN. art. 42.12 § 20 (Vernon Supp. 2008).
179. Marcum v. State, 983 S.W.2d 762, 768 (Tex. App.—Houston [14th Dist.] 1998,
pet. ref’d).

2010] LIMITING THE RIGHT TO PROCREATE 247
similar to Salazar, should uphold the condition as a valid exercise of
judicial discretion.
VII. CONCLUSION
When looking at the history of probation over the years, it seems
that the trends are moving toward a more restrictive means of allowing
an individual to remain in the community, under the watchful
eye of the government. With jails and prisons becoming more and
more overcrowded by the day, probation, community supervision, or
community control, whichever term is preferred, is used more frequently.
Each state has enacted statutes to regulate the imposition of
probation conditions as well as give the judge a very wide discretionary
power when it comes to imposing those conditions. This discretion
is apparent in the large number of judges that have imposed
conditions that limit the fundamental rights of the probationers.
The right to procreate, a fundamental right that has long been recognized
through the right to privacy, is definitely a gray area when it
comes to probation conditions. Is it constitutional to restrict this
right? Is it constitutional to limit this right? Although the majority of
courts have held probation conditions that limit procreation invalid,
Wisconsin and Oregon are leading the trend in finding that limiting
the right to procreate is a reasonable and valid exercise of judicial
discretion in imposing probation conditions.
Felicia Salazar, although not aware of it at the time, could have
been a pivotal player in Texas probation history. By imposing a condition
of probation that restricts her right to procreate, Judge Baird essentially
stripped Salazar of a right so fundamental to life that on the
surface, one would automatically assume Judge Baird abused his discretion
as a Judge and thus the condition should be invalid. This is
simply not the case. Judge Baird merely exercised his statutorily given
power and imposed a reasonable condition that related to Salazar’s
crime, her rehabilitation, and the protection of the public. Judge
Baird acted as the Supreme Court of Wisconsin did, as the Court of
Appeals of Oregon did, and as the Supreme Court of Ohio should
have done through Justice Pfeifer’s dissent. However, because no objection
to the condition was made at Salazar’s trial, Texas will have to
wait for another Judge to step up and impose a reasonable, although
somewhat controversial, condition limiting the right to procreate.
Maybe the future defendant will object next time around and give the
Texas courts the opportunity to firmly establish precedent allowing for
the reasonable imposition of probation conditions that limit the fundamental
right to procreate.