Altesse Healthcare Solutions, Inc. v. Wilson, 540 S.W.3d 570

Plaintiffs Becky and Allen Wilson sold ABACAW Enterprises to Altesse Healthcare (owned by Shawna Boudreaux) for $800,000; Boudreaux personally guaranteed payments.
Altesse failed to make the first payment and sued the Wilsons in federal court alleging fraud; the Wilsons filed a state suit for breach and obtained a TRO directing Altesse to return ABACAW assets and prohibiting contact with employees, patients, contractors, and use of ABACAW identifiers.
Altesse removed the state suit to federal court; the federal court remanded, concluding removal was an attempt to avoid the TRO.
During the TRO period Altesse (per testimony) transferred funds, continued holding itself out as operating ABACAW, used ABACAW Medicare/provider numbers, and contacted patients; some assets were later returned.
The trial court found contempt and imposed sanctions totaling $897,937.51 (including the full $800,000 purchase price, cash transfers, fees), effectively awarding plaintiffs both the company and the sale proceeds; the court of appeals affirmed.
The Supreme Court reviewed whether the sanctions were justified and proportional given Altesse’s TRO violations and its unadjudicated fraud defenses.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether TRO violations justified extreme (death-penalty-plus) sanctions	TRO violations were knowing and severe; full recovery appropriate to remedy harm and deter	Violations occurred under difficult operational/ethical constraints; removal complicated compliance; some compliance occurred	Court: TRO violations proven but sanctions were excessive and disproportionate
Whether sanctions may effectively decide the merits (deny defendant adjudication)	Sanctions necessary because conduct destroyed the business and claims lack merit	Sanctions deprived Altesse of opportunity to litigate fraud/fraudulent-inducement defenses	Court: Sanctions cannot substitute for merits unless conduct justifies presuming claims lack merit; here no such presumption
Requirement to consider lesser sanctions before death-penalty	Extreme sanction justified given ongoing harm and alleged destruction of business	Trial court failed to adequately consider lesser alternatives; extreme sanction unnecessary	Court: Trial court must consider lesser sanctions; record shows inadequate consideration; abuse of discretion
Effect of removal on state TRO compliance	Removal was improper tactic to avoid TRO; sanctions appropriate	Removal created confusion but did not negate duty to obey TRO; post-removal orders remain until modified	Court: Removal did not excuse noncompliance; TRO remained effective, but that does not validate disproportionate sanctions

In re Bennett, 960 S.W.2d 35 (Tex. 1997) (trial courts have inherent authority to sanction recalcitrant litigants)
TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913 (Tex. 1991) (sanctions must directly relate to misconduct and not be excessive)
Paradigm Oil, Inc. v. Retamco Operating, Inc., 372 S.W.3d 177 (Tex. 2012) (death-penalty sanctions reserved for cases justifying presumption that claims lack merit)
Cire v. Cummings, 134 S.W.3d 835 (Tex. 2004) (trial court must consider lesser sanctions before imposing dismissal/death-penalty)
Chrysler Corp. v. Blackmon, 841 S.W.2d 844 (Tex. 1992) (sanctions must be no more severe than necessary)
Societe Internationale v. Rogers, 357 U.S. 197 (1958) (constitutional limits on dismissing actions without opportunity to be heard)