Charles O. "Chuck" Grigson, Gerald Hooks, and Leslie Hooks v. State
03-15-00436-CV
Tex. App.Aug 7, 2015Background
- This is an interlocutory appeal dispute arising from a district court’s July 2015 preliminary approval order for a third settlement in a long‑running class action involving the State of Texas and multiple Farmers insurance entities.
- Appellants (Grigson; intervenors Gerald and Lesly Hooks) contend the district court certified a new settlement class in 2015 that materially differs from the original 2003 class and therefore is immediately appealable.
- Appellees (State and Farmers parties) argue the 2003 certification endures and the 2015 order merely continued that original certification, so no new interlocutory appeal lies.
- Appellants identify substantive changes from 2003 to 2015: different payout structure (including an alleged $10 million supplement and rate‑reductions treated as payments), reduced per‑claim caps (e.g., $35 for credit‑scoring claimants), altered released claims (including use of California law for unknown claims and a Geter carve‑out), and roughly a 20–25% diminution of class membership due to mortality.
- Appellants further argue the 2015 settlement improperly directs unclaimed/undisbursed funds to the State’s unclaimed property fund (raising Highland Homes concerns), and that incentives created by the settlement risk collusion and inadequate representation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2015 preliminary approval order certified a new settlement class and is immediately appealable | Appellants: the 2015 order includes Rule 42 findings and, given material changes since 2003, certifies a new class that is subject to interlocutory appeal | Appellees: the 2003 certification survives; the court’s 2015 order merely continued the original certification and is not a new, appealable certification | Appellants argue the changes in membership, released claims, payouts, and law required new certification and thus support interlocutory appeal (court urged to deny dismissal) |
| Whether changes between 2003 and 2015 (membership, released claims, payouts) require fresh rigorous Rule 42 analysis | Appellants: material differences (member deaths, altered releases, payout structure) made new certification inevitable and demanded rigorous scrutiny | Appellees: minor/formal differences do not change the fundamental nature of the class from 2003 | Appellants contend the district court did perform and should have explicitly recognized new certification given the evidence and changed circumstances |
| Whether directing undisbursed settlement funds to the State’s unclaimed property fund is permissible | Appellants: Highland Homes precludes shunting class members’ funds to the State as unclaimed property because funds are claimed through the class representative | Appellees: prior practice and earlier settlements directed funds to State’s unclaimed fund; argued not an improper expropriation | Appellants rely on Highland Homes to argue that routing these funds to the State undermines adequacy and raises collusion concerns, supporting fresh certification/review |
| Whether collusion or inadequate representation tainted the settlement approval process | Appellants: incentives (e.g., larger cy pres to State if claims go unfiled, burdensome notice/forms) show risk of collusion and inadequate representation | Appellees: maintain settlement is an improvement and supported by Commissioner/former counsel | Appellants assert the district court heard evidence on these topics and that the risk of collusion/ inadequacy supports certification scrutiny and appeal |
Key Cases Cited
- Highland Homes Ltd. v. State of Texas, 448 S.W.3d 403 (Tex. 2014) (rejects treating class members’ uncollected settlement funds as State unclaimed property and warns against cy pres expropriation)
- Phillips Petroleum Co. v. Yarborough, 405 S.W.3d 70 (Tex. 2013) (trial court orders that materially change the nature of a class are subject to interlocutory appeal)
- McAllen Med. Ctr. v. Cortez, 66 S.W.3d 227 (Tex. 2001) (heightened scrutiny required for settlement‑only class certification)