Fifth Circuit Clarifies Standards for Standing and Ratification

Fifth Circuit Clarifies Standards for Standing and Ratification

© 2015 The Texas Lawbook.

By Mark Curriden

(April 6) – A federal appeals court, in a strongly worded decision that favors plaintiffs in civil lawsuits, reinstated on Tuesday a million-dollar jury verdict for a severely disabled Keller Independent School District student who had been abused by a former special education teacher.

In doing so, a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit provided litigants and judges a much clearer roadmap about when parents or other parties may bring civil claims on behalf of minors who are unable to competently make legal decisions on their own.

Judge Gregg Costa, in a 23-page opinion that smoothly combines narrative storytelling with clear explanation of the technical legal issues in question, ruled that courts should not penalize plaintiffs in a lawsuit who make “an understandable mistake” or omission by failing to identify other related parties in their case – even if the issue isn’t raised until after trial.

“[This] opinion will likely be one of the benchmark cases cited for many years on issues of standing, capacity and ratification, and the application of [Rule 17 (a) of the Federal Rules of Civil Procedure],” said Michael Hurst, a partner at Lynn Pinker Cox Hurst in Dallas.

The case started in 2011 when the parents of then-15-year-old Terrence Rideau sued the Keller ISD alleging that one of its teachers repeatedly mistreated their son, who suffered severe brain damage after he received a tainted vaccine as an infant.

Rideau, who is now 21, has limited verbal and cognitive skills and is wheelchair bound.

The lawsuit claimed that Rideau suffered broken bones, cuts and other injuries while he was a student in the special education program at Keller Middle School from 2008-2010.

Hurst said Terrence suffered physical abuse, including a broken thumb, a dislocated knee and skull contusions, at the hands of the teacher.

“Because of his mental and physical disabilities, T.R. was not able to tell his parents what was happening to him,” said Hurst, who represents the Rideaus. “You have a child who cannot speak, so he is communicating to us through his injuries.”

When the Rideaus lodged a complaint with the Keller school district, they learned that a classroom assistant had reported misconduct by the same special education teacher years before, but that nothing had been done to remove, discipline or fire the teacher in question, Hurst said.

In 2011, the Rideaus sued on behalf of their son under the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973 (Rehabilitation Act).

Following an eight-day trial in October 2013, a jury in Fort Worth awarded the Rideaus $1 million for the physical pain, mental anguish and past and future medical care and expenses.

The verdict, according to Hurst, was believed to be among the largest of its kind against a U.S. public school system involving intentional discrimination under the Americans with Disabilities Act.

Four days after the verdict, lawyers for the Keller ISD discovered that the Rideaus established a guardianship management trust 12 years earlier to provide financial support and maintenance for their son for the rest of his life.

Keller ISD lawyers argued that the financial institution managing the trust, PlainsCapital Bank, should have been the party suing on Terrence Rideau’s behalf – not his parents.

Lawyers for the school district argued that federal rules of civil procedure technically barred the parents from being the named plaintiffs in the case and that the parents hid the bank’s role as part of a legal strategy to make themselves more sympathetic to jurors deciding the case.

The Rideaus responded that the omission was a simple oversight and the couple quickly amended the lawsuit to include PlainsCapital as a plaintiff also suing on Terrence Rideau’s behalf.

Senior U.S. District Judge Jerry R. Means of the Northern District of Texas sided with Keller ISD and threw out the $1 million verdict.

Judge Costa wrote that “everyone recognized that T.R. lacked the ability to prosecute his claims, primarily due to his disability though also because he was a minor when the lawsuit began.”

The judge also stated, “there is no hint that PlainsCapital has any interest adverse to T.R.” and that there is no evidence contradicting the Rideaus’ argument that the omission of the bank was nothing more than an understandable mistake.

Judge Costa, writing for fellow appellate judges Catharina Haynes and E, Grady Jolly, said that the lower courts did not consider the “genuineness” of the Rideaus’ position.

“The district court appeared to accept that a mistake was made but did not accept that it was understandable,” the judge said. “The court’s finding of no understandable mistake cannot withstand even deferential scrutiny. The Rideaus did provide an explanation for PlainsCapital’s omission: they believed that they too could bring their son’s claims.

“A good-faith, non-frivolous mistake of law triggers Rule 17(a)(3) ratification, joinder, or substitution,” Costa said. “That the effect of this mistake, in the absence of ratification, will be felt by T.R. — an incapacitated individual who should not be expected to understand the complicated capacity issue previously outlined— further sets this case apart from those in which a mistake was found not understandable.”

Judge Costa pointed out that the Rideaus informed PlainsCapital on the progress of the lawsuit. The bank “would not have settled without the Rideaus’ permission even if named in the complaint,” the decision said.

“While it is rare indeed for ratification to occur so late in a case, it is not unheard of,” he said.

The three-judge panel also ruled that the Keller ISD was not prejudiced by having the more sympathetic parents sue on behalf of their son instead of the bank.

“Jurors in this circuit are routinely instructed to decide the merits of a given case without regard to ‘passion, prejudice, or sympathy,’” Judge Costa wrote. “A similar instruction was given in this case. Absent any showing to the contrary, we presume that the jury followed all instructions given, including this one.”

The Fifth Circuit did hand Keller ISD a partial victory by rejecting the $150,000 the jury awarded to Rideau’s parents for pain and suffering, which trims the judgment against the school system to $800,000.

Hurst said that he and his legal team plan to ask the judge to order Keller ISD to pay more than $1 million in legal fees.

Other lawyers representing the Rideaus are Lynn Pinker partner A. Shonn Brown, associate Joshua A. Sandler and senior counsel John F. Guild.