Reply Brief — Pennzoil Co. v. Texaco Inc.

Supreme Court of the nit }

IN THE

OCTOBER TERM, 1985 °~

-

PENNZOIL COMPANY,

—egeiant~- Appellant,

TEXACO, INC.,

Appellee.

ON APPE/*. FROM THE UNITED STATES

COURT OF APPEALS FOR THE SECOND CIRCUIT

REPLY TO MOTION TO AFFIRM

LAURENCE H. TRIBE

Counsel of Record

1525 Massachusetts Avenue

Cambridge, Massachusetts 02138

(617) 495-1767

Of Counsel:

JOSEPH D. JAMAIL

JAMAIL & KOLIUS

3300 One Allen Center

Houston, Texas 77002

HARRY M. REASONER

VINSON & ELKINS

3300 First City Tower

1001 Fannin

Houston, Texas 77002

ARTHUR L. LIMAN

MARK A. BELNICK

PAUL, WEISS, RIFKIND,

WHARTON & GARRISON

345 Park Avenue

New York, New York 10154

JOHN L. JEFFERS

G. IRVIN TERRELL

BAKER & BOTTS

3000 One Shell Plaza

Houston, Texas 77002

W. JAMES KRONZER

1001 Texas, Suite 1030

Houston, Texas 77002

PAUL M. BATOR

DOUGLAS A. POE

MAYER, BROWN & PLATT

231 South LaSalle Street

Chicago, Illinois 60604

June 10, 1986

TABLE OF CONTENTS

TABLE OF AUTHORITIES.................-.-- nee

IT onc se ccececdceseusceesouscesevce

i.

iI.

Ill.

IV.

TEXACO’S ATTEMPT TO NARROW THE

SCOPE OF THE ISSUES BEFORE THIS

COURT CANNOT SUCCEED. ...............

AN AFFIRMANCE OF THE JUDGMENT BE-

LOW WOULD NECESSARILY ERODE THE

ANTI-INJUNCTION ACT. .......-...2-005-

AN AFFIRMANCE WOULD NECESSARILY

UNDERMINE YOUNGER. ............+++++:

AN AFFIRMANCE WOULD ENTAIL PREMA-

TURELY SECOND-GUESSING A _ REASON-

ABLE ACCOMMODATION OF ECONOMIC

PINES 6 600s bb bb CéWe pecnsesbeseneerere

CONCLUSION........ hoeeadeesUNesenevadesbenees

10

10

TABLE OF AUTHORITIES

Cases

Ammex Warehouse Co. v. Archer, 381 S.W.2d 478 (Tex.

Bender v. Williamsport School Dist., 106 S.Ct. 1326

Fe

Bergman v. West, 262 S.W.2d 435 (Tex. Civ. App. 1953)

Brown v. Chastain, 416 F.2d 1012 (Sth Cir. 1969), cert.

Goniad,, TFt UZ. FSR Gaeee svn caccctwienseesedess

Dandridge v. Williams, 397 U.S. 471 (1970) ..........

Davis v. Scherer, 104 S.Ct. 3012 (1984) ..............

Ganey v. Barefoot, 749 F.2d 1124 (4th Cir. 1984), cert.

Ganted, TS GL. Bae Hs sb nc cidcccccehiacdks

Glenn v. Hollums, 73 S.W.2d 1068 (Tex. Civ. App. 1934)

Henry v. First Nat’l Bank, 595 F.2d 292 (Sth Cir. 1979),

cert. denied, 444 U.S. 1074 (1980).................

Hernandez v. Finley, 471 F.Supp. 516 (N.D.Ill. 1978),

summarily aff'd sub nom. Quern v. Hernandez, 440

Puy SOO GHPTED ccccccencesacvecsseseseseeonneent

Juidice v. Vail, 430 U.S. 327 (1977). ...........0 ce eee

Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982) ....

New Motor Vehicle Bd. v. Fox, 439 U.S. 96 (1978) ....

Pace v. McEwen, 604 S.W.2d 231 (Tex. Civ. App. 1980)

Railroad Comm’n v. Pullman Co., 312 U.S. 496 (1941)

Stefanelli v. Minard, 342 U.S. 117 (1951).............

Svoboda v. Alexander, 3 S.W.2d 423 (Tex. Com. App.

SEES + 6c ccccdencesotcoandshééuhkeeneneeeenel

PAGE

PAGE

Thomas v. Kadish, 748 F.2d 276 (Sth Cir. 1984), cert.

eer 10

Weinberger v. Salfi, 422 U.S. 749 (1975) ............. 10

Younger v. Harris, 401 U.S. 37 (1971) ............... 5

Statutes

ne ods 6b uh'eenbcsee ses eon.ee Ye

RECs edavocubecdececccvcscvceces 5

rir cna nececeesceesvecccecsacces

Texas Civ. Prac. & Rem. Code § 65.013.............. 8,9

Texas Prop. Code Ann. § 52.001 ............2cceeees

Rules

ee ee ce ewe edecec ade ee 8

ES is ccc ccccccccscvcsecscessces 8

I oo vc cccccvccccccccececececes 4,8

OE EE so ccc ccs cécceccccccceccevess 8

EE 8

Other Authorities

C. Wright, Federal Courts (4th ed. 1983).............

The Houston Chronicle (May 23, 1986) .............. y

INTRODUCTION

The basic refrain of Texaco’s Motion to Affirm (MTA)' is:

Don’t worry, it’ll never happen again. Appellee’s vigor in

pressing this point makes one wonder if perhaps Texaco doth

protest too much: why argue that the federal intrusion upheld

below could never happen again unless one senses that it

should never happen again? In truth, it should never have been

allowed to happen here.

For ‘what Texaco says makes this case unique is in fact

something that has yet to occur at all: a flat insistence by Texas

on rigidly enforcing the state’s lien and bond rules in the face

of an objection in its courts as to the dire and unconstitutional

results of doing. so on these facts. But Texaco cannot be

permitted to obscure the fact that it has never given the courts

of Texas a chance even to consider its objections to such rigid

enforcement. With or without Pennzoil’s express waiver of its

rights under the regime Texaco contests (see A129; JS 17 &

n.10), there is simply no reason to assume that the Texas courts

would have been any less sensitive than the federal judiciary to

Texaco’s legitimate concerns or that travelling to a federal

court half a continent away represents a more rapid or certain

path to a just outcome than would have been available in the

Texas judicial system. Indeed, the more its situation can be

fairly characterized as unique, the /ess justified is Texaco’s

unsubstantiated assumption—an assumption central to Tex-

aco’s case—that the Texas courts would blindly apply the

standard, non-constitutional bond precedents cited by Texaco

and by the court below, and would simply ignore Texaco’s

federal constitutional objections.” This Court’s decisions per-

l. References to the Motion to Affirm will be styled “MTA___”; to

the Jurisdictional Statement, “JS___”; to the Appendices to the JS,

I

2. Texaco’s forecast of futility for the state court challenge that it has

yet to make is based on its extrapolation from cases that raised no claim

under the federal Due Process Clause or under the Texas “open courts”

guarantee—and cases that presented nothing akin to Texaco’s supposedly

“unique and extraordinary circumstances” (MTA9). Texaco’s entire claim

thus rests solely on pessimistic forecasts about how Texas courts would

resolve questions that have never been put to them.

2

mit no such distrust and disdain for state courts as forums

fully willing and able to vindicate federal rights.

What cannot be deemed unique to this case is the practice of

endorsing federal “flanking movement[s] against the system of

State courts,” Stefanelli v. Minard, 342 U.S. 117, 123 (1951)—

a practice that, if warranted on these facts, must be deemed

warranted in a wide range of situations. It would be unprinci-

pled and lawless to permit the court below to excuse its

departure from precedent by saying, in effect, “only for

Texaco.” And it would be imprudent to suppose that other

“exceptions” will not be made for other litigants. It is instruc-

tive to note in this regard how casually both Texaco (MTA7 &

n.14, 13 & n.23) and the courts below (A14, 51, 76) extended,

to a situation much less compelling (see JS 12 n.6), the Fifth

Circuit’s supposedly “unique” action in the civil rights context

of Henry v. First Nat’l Bank, 595 F.2d 292 (Sth Cir. 1979),

where this Court merely denied certiorari. 444 U.S. 1074

(1980).* Even if a single point on a legal plane may be safely

ignored, two points would surely make a line, especially if one

of them were highlighted by an affirmance by this Court, in a

case that Texaco concedes falls within the obligatory jurisdic-

tion conferred by 28 U.S.C. § 1254(2). The importance and the

complexity of the federal questions presented by this appeal

are evident even from the Motion to Affirm; summary affirm-

ance is therefore unthinkable.*

3. Indeed, the district court, relying on Henry, treated the issuance of

an injunction against Texas proceedings in this case as almost routine: “[T]he

imposition of this sort of injunction is hardly unique.” (A76).

4. Nor is it too late for this Court, in its 1986-87 Term, to remit to the

Texas courts the matter of arranging security pending the appeal of Penn-

zoil’s trial court judgment—an appeal unlikely to be concluded even in the

Texas courts alone prior to mid-1987 at the earliest. But should this Court be

concerned lest developments in Texas overtake its docket and moot the

matter before principles of federalism may be vindicated here, the suitable

form of prompt disposition would be summary reversal on the ground that

the federal courts were wrong to intrude at all.

I. TEXACO’S ATTEMPT TO NARROW THE SCOPE OF

THE ISSUES BEFORE THIS COURT CANNOT SUC-

CEED.

It is understandable that Texaco should be apprehensive

about this Court reviewing the Second Circuit’s jurisdictional

holdings, but Texaco’s suggestion that the Court might prop-

erly confine its obligatory review under § 1254(2) to the merits

of the Second Circuit’s “due process ruling” (MTA14 n.26) is

altogether frivolous. For a federal appellate court cannot pass

on the merits of a lower court’s decision without first finding

that that court properly asserted jurisdiction to reach the

merits. See, e.g., C. Wright, Federal Courts 22-23 (4th ed.

1983).° .

Texaco’s attempt substantively to narrow the due process

issue presented by this appeal is no more convincing than its

procedural gambit. First, the holding below cannot be limited

to situations where supposedly “inflexible” security require-

ments would “destroy” the debtor’s right to appeal. (MTA10).

Even if the inflexibility of Texas’ requirements were con-

ceded—which it is not—only the size of the bond that it fears

would be required of it allegedly renders its appeal futile. It

would not matter to this claim whether that bond were im-

posed by an iron legislative rule or by a flexible, ad hoc judicial

determination. The Second Circuit’s holding thus authorizes

federal judicial intervention whenever a state’s supersedeas

procedure might require a bond large enough to threaten a

particular judgment debtor with irreversible enforcement.

5. “(E]very federal appellate court has a special obligation to ‘satisfy

itself not only of its own jurisdiction, but also that of the lower courts in a

cause under review,’ ” Bender v. Williamsport School Dist., 106 S.Ct. 1326,

1331 (1986). See also Juidice v. Vail, 430 U.S. 327, 331 (1977) (on direct

appeal from three-judge court, this Court should not reach “merits of the

constitutional dispute” where Younger should have led lower court to

abstain). Texaco’s only contrary authority is a curious citation to Davis v.

Scherer, 104 S.Ct. 3012 (1984), in which this Court reviewed an immunity

issue “not related” to the validity of the state law in question after declaring

that it has power to decide all the federal questions presented in “cases where

the Court of Appeals has declared a state statute unconstitutional,” id. at

3017 n.7.

4

Second, the holding below cannot be confined to situations

where the required bond or alternate security “deposit”,

Tex.R.Civ.P. 364(a), is “impossible” for any judgment debtor

to obtain. (MTAIO). For a smaller security requirement im-

posed on a less wealthy judgment debtor could just as clearly

exceed that party’s financial capacity—a common occurrence,

despite Texaco’s rhetorical question (see MTA10-11 n.19), since

many businesses might be unable to post security because of a

limited cash flow and the nature of their assets, whether or not

they have net illiquid assets in excess of the judgments against

them. Any such debtor’s appeal would be “destroyed” no less

surely than Texaco claims its own to be.

Third, the holding below cannot be confined to situations

where requiring a full bond is supposedly unnecessary to

protect the judgment creditor’s interests. (MTA10). Despite

Texaco’s repeated assertions, Pennzoil has never “conceded”

that Texaco’s size makes further security superfluous.® Tex-

aco’s assets, after all, represent oil and gas that is readily

depletable and of declining value in the midst of the current

global oil glut.’ And even the district court, concerned that

“other creditors of Texaco will . . . seek[ ] to perfect security

interests higher than that . . . available to Pennzoil” (A77),

held that, whatever the size of the appropriate judgment, it

“must be secured by assets or obligations at least equal in value

rr

6. See, e.g., Pennzoil’s Reply Brief in the Second Circuit at 5. The

references by both Texaco and the court below to such statements are

uniformly citations to hearsay newspaper reports of statements attributed to

Pennzoil officials or attorneys. Compare, e.g., MTAS n.11 and A46 with

Al116-17.

7. See A101 (District Court Findings 80-81); Kerr Affidavit at 3-5,

attached to Pennzoil’s Second Circuit Motion to Modify or Stay the

Judgment.

8. Pennzoil has devoted little effort to refuting Texaco’s assertions in

federal court about what precise on-going arrangements are needed ade-

quately to secure the state court judgment for the simple reason that this

complex matter should be resolved in the tribunals of Texas. That is why this

appeal has been brought. That the concrete risk to Pennzoil’s security

interests grew as oil prices fell and as Texaco’s approaches to possible new

creditors multiplied, see Pennzoil’s Second Circuit Motion to Modify or Stay

5

Il. AN AFFIRMANCE OF THE JUDGMENT BELOW

WOULD NECESSARILY ERODE THE ANTI-

INJUNCTION ACT.

Texaco’s astounding suggestion that this case is ‘‘narrower

than Lugar [v. Edmondson Oil Co., 457 U.S. 922 (1982)],”’

because ‘“‘this is solely an injunction action, not a suit for

damages’’ (MTA20), compietely misconceives the federalism

concerns embodied in the Anti-Injunction Act for nearly two

centuries: it is axiomatic that injunctive interference in state

proceedings is the most intrusive form of federal invasion. And

it is hard to take seriously the idea that, because Texaco could

have chosen to seek a § 1983 ‘‘injunction . . . against the state

officials involved in the proceeding’? (MTA19), the Second

Circuit’s state action holding ‘‘has no impact on the breadth of

the § 1983 exception to the Anti-Injunction Act’’ id. (original

emphasis). Obviously, Texaco sued Pennzoil instead of state

officials in an attempt to avoid Younger v. Harris, 401 U.S. 37

(1971), which would have blocked Texaco’s federal foray had

it sued ‘‘any arm of the state.’’ (A34). Only the Second

Circuit’s expansion of the state action concept enabled it to

drive a wedge between the Anti-Injunction Act and Younger,

creating the opening through which Texaco obtained federal

relief pendente lite.

Texaco’s Motion to Affirm distorts Lugar by undermining

the only principled limitations that can prevent Lugar from

becoming an all-purpose doctrine transforming every state-

court judgment winner who seeks enforcement into ‘“‘the

the Judgment at 4, while accounting for a delayed decision to press this

appeal, cf. MTA6 n.12, is, of course, legally immaterial.

Pennzoil declines to speculate on Texaco’s motives for seeking federal

intervention in Texas judicial proceedings. Compare MTA6 & n.12. But it

must be noted that, contrary to Texaco’s misrepresentation to this Court that

Texaco “did not seek” to have the Texas judgment “review[ed] or

modififed]” by a federal court (MTA7), Texaco has in fact used the federal

judiciary in just such an effort to undo its Texas trial loss: its federal

complaint sought “appellate review on the merits of the Texas judgment in

violation of 28 U.S.C. § 1257 as interpreted by [this] Court” (A5), and the

district court granted injunctive relief to that end before being rebuked and

reversed by the Second Circuit. (A19). Indeed, Texaco persists in arguing to

this Court that the Texas trial court’s judgment was “erroneous.” (MTA12)

(original emphasis).

6

state.’’ Lugar held a state-court plaintiff to be a state actor

only because state law abdicated to him the unilateral and

unsupervised power to determine, simply by filing a compiaint

and an ex parte attachment petition, see 457 U.S. at 924, both

that a debt was owed and that security therefor was required

pending trial. Pennzoil wields no such power. The determina-

tion that Texaco owes Pennzoil damages was made by a judge

and jury after a 4% month trial; the decisio.: »..sumptively to

require security for all such judgments was made by the Texas

Legislature when it enacted § 52.001 and by the Texas Supreme

Court when it promulgated Rule 364; and the decision whether

to require full security on these facts would be made by the

Texas courts upon Texaco’s timely request. See Ill infra. A

winning plaintiff like Pennzoil, which the Second Circuit

credits with ‘‘unilateral’’ power to make ‘‘state officials do

[its] bidding’’ (A28), is in truth relegated to the role of delivery

boy:” all the power at issue is wielded by organs and agents of

the State of Texas. The suggestion that Pennzoil is here

exercising unsupervised and unilaterai official state power can

be advanced, therefore, only by completely and artificially

severing the issue of arranging security pending appeal from

the judicia! process culminating in the judgment being ap-

pealed.

Iii. AN AFFIRMANCE WOULD NECESSARILY UNDER-

MINE YOUNGER.

Most alarming is the Second Circuit’s holding that Younger

can be evaded by a federal plaintiff’s unilateral, self-serving

prediction that resort to state judicial procedures would be

futile. The gravamen of Texaco’s argument is not that it could

not have raised its constitutional challenge in the Texas courts,

but that such a challenge would probably have veen denied,

since none had ever succeeded in the past. (MTA27 n.53). Even

9. Pennzoil’s role in enforcing its judgment against Texaco would be

limited to asking the Texas court for a writ of execution and delivering it to a

sheriff. (A25; MTAI1 n.2). And its role in perfecting judgment liens against

Texaco would likewise be limited to obtaining an abstract of the trial court’s

judgment from one court clerk and handing it to another for recording and

filing. (A25-26; MTA2 n.3).

7

if that were the Younger standard—which it is not'’—Texaco

persists in ignoring the fact that the Texas courts have never

been given the opportunity to address a challenge like Texaco’s

to the lien and bond provisions.''

More fundamentally, Texaco’s claim that Texas remedies are

inadequate—a claim without which Texaco’s entire case crum-

bles—is built upon three gross misrepresentations of Texas

law. If Texaco and the Second Circuit had taken Texas law

seriously, they would have found several rapid ways for Tex-

aco to stay the judgment while challenging the lien and bond

provisions. '

First, like the judgment debtor in Pace v. McEwen, 604

S.W.2d 231, 233 (Tex.Civ.App. 1980), Texaco could have

10. Texaco errs in relying on Hernandez v. Finley, 471 F.Supp. 516

(N.D.Ill. 1978), summarily aff’d sub nom. Quern v. Hernandez, 440 U.S.

951 (1979), for the proposition that something less than a “procedural bar”

to raising one’s federal claims will suffice to suspend the abstention require-

ment. (MTA26 n.51). The court in Hernandez in fact found just such an

absolute procedural bar when it accepted the argument that the pre-judgment

attachment statute at issue “restrict[ed] challenges to the attachment exclu-

sively to the issues of whether prescribed procedures have been followed and

whether the allegations of the affidavit are true.” 471 F.Supp. at 519.

11. Texaco fails to mention that the Texas “conference” it requested on

December 13, 1986 (MTA4)—three days after it sought injunctive relief and

appellate review of the Texas judgment in the federal district court in White

Plains—would have concerned only alleged “uncertainties” in the Paragraph

7 “stand-still” arrangement, and not the state or federal constitutionality of

applying the lien and bond provisions. (A10). Texaco also elides the fact that

it submitted its “request” in forma pauperis by letter, not by motion or

petition, and the fact that Texaco failed to respond to requests by both

Pennzoil and the Texas trial court that Texaco comply with the Texas Rules

of Civil Procedure if it wished a hearing. (See District Court Findings Nos.

82, 85-87, A101-02).

12. Texaco nowhere denies that, even without posting a supersedeas

bond, it still had 3% months in which to ask the Texas courts for relief.

Texaco filed its federal injunction action on December 10, 1985—before the

Texas judgment had even been entered—even though the stand-still agree-

ment to which Texaco had that very day consented ensured that Texaco need

fear no enforcement of the judgment or attachment of liens until late March

of 1986. (A7 & n.3; A127-28).

8

sought a stay of the judgment directly from the Texas Court of

Appeals without filing any supersedeas bond."

Second, the Texas trial court itself is ‘‘vested’’ with the

power ‘‘to grant a temporary injunction to prevent damage to

an appellant,’’ when enforcement of a civil judgment would

render the right to appeal ‘‘meaningless.’’ Pace, supra, 604

S.W.2d at 233, 232. (See JS 18 n.11)."*

Third, as Pennzoil previously explained (JS 18 n.11), a

Texas trial court has explicit statutory power to “‘stay a

judgment’’ (not merely to stay its execution) if the complainant

can show himself ‘‘equitably entitled tu be relieved against’’

part or all of that judgment. Tex.Civ.Prac. & Rem.Code

§ 65.013. Contrary to Texaco’s contention that such relief will

not lie if the judgment debtor has not filed a supersedeas bond

in compliance with Rule 364 (MTA27 n.53), that rule, as

amended in 1984, explicitly recognizes that in appropriate

circumstances other statutes may govern the suspension of a

judgment.'* Texaco’s authorities for the proposition that

§ 65.013 cannot be applied to mitigate the full bond require-

ment of Rule 364 pre-date the 1984 amendment by half a

century and are in any event utterly irrelevant: neither case

involved a constitutional challenge such as Texaco’s; in neither

13. | Texaco is simply wrong in stating that it would have had to waive its

new trial motion in order to perfect an appeal and petition the appellate

court for such relief in mid-December of 1985. (MTA27 n.53). It is black

letter law in Texas that Texaco could have perfected its appeal by filing a very

small cost bond (not a supersedeas bond) on the very day the trial court

entered judgment, see Tex.R.Civ.P. 363; and “if a motion for new trial is

timely filed by any party, the trial court, regardless of whether an appeal has

been perfected, has plenary power to grant a new trial. . . .” Tex.R.Civ.P.

329b(e) (emphasis added). See Ammex Warehouse Co. v. Archer, 381 S.W.2d

478, 482 (Tex. 1964); Bergman v. West, 262 S.W.2d 435, 436 (Tex.Civ.App.

1953).

14. Contrary to Texaco’s inexcusable misrepresentation, the Pace court

enjoined a “forced sale” of real property that had been ordered to satisfy “a

money judgment,” 604 S.W.2d at 232—not a “judgment. . . for recovery of

specific real property.” (MTA27 n.53). The case thus sounded in Rule 364(b),

not (c), and is directly on point.

15. |The 1984 amendment to paragraph (a) of Rule 364 added the

prefatory phrase “Unless otherwise provided by law. . . .” to the language

requiring a full supersedeas bond for the suspension of a judgment. (See JS

19 n.11).

9

case did the judgment debtor attack the required bond as

unaffordable or unnecessary; and neither case was in fact

governed by the “‘statutory predecessor to § 65.013’’ (MTA27

n.53).

Thus timely relief in the Texas courts was fully available.

And Texas’ interest in being afforded an opportunity (subject

to Supreme Court review) to grant such relief in the course of

administering its appellate system is no less basic than its

interest in assuring that its judicial ‘‘orders and judgments are

not rendered nugatory.’’ Juidice v. Vail, 430 U.S. 327, 336

n.12 (1977). These systemic state interests in overseeing and

fine-tuning the appellate process in light of applicable federal

constitutional norms remain the same whomever the state

court judgment loser sues in federal court.'’ Only the Second

Circuit’s disregard of these interests permitted it.to address the

merits of Texaco’s constitutional arguments. '®

16. The judgment debtors in Glenn v. Hollums, 73 S.W.2d 1068

(Tex.Civ.App. 1934), sought to enjoin a judgment on the basis of an entirely

distinct Depression-era foreclosure moratorium statute, id. at 1069-70, and in

Svoboda v. Alexander, 3 S.W.2d 423 (Tex.Com.App. 1928), which did not

even involve a supersedeas bond, a temporary injunction against enforce-

ment of a judgment was in fact granted by the trial court. /d. at 424. Even if

Texaco’s authorities were arguably relevant, Railroad Comm’n v. Pullman

Co., 312 U.S. 496, 498 (1941), would preclude a federal resolution of the

resulting state-law issue. But in fact Texaco has yet to produce even arguable

support for its mechanical reading of Texas law.

17. Having deliberately declined to sue any Texas officials in an attempt

to avoid Younger, Texaco cannot now attribute significance to the fact that

no Texas officer is a party. (MTA8 n.16). But if Texaco’s profligate use of

newspaper “authorities” is acceptable, it seems that the Texas Attorney

General declined to press a separate appeal because of his confidence that the

State’s interests would be well represented by Pennzoil and because of his

conclusion that “there [was] no need to file duplicate documents.” The

Houston Chronicle, § 1, p.22 (May 23, 1986).

18. | While Texaco persists in arguing that the federal interference

wrought by its foray to White Plains somehow made the appellate process in

Texas more meaningful (MTA24), it has not denied—nor could it—that

Congress has never conferred upon lower federal courts the power to

displace state tribunals or this Court in protecting the state appellate process

and this Court’s jurisdiction.

Texaco (MTA28) and the court below (A22-23) err in treating the Rooker/

Feldman doctrine as applicable only where a litigant seeks to reverse a prior

state court decision—treatment that would reduce the doctrine to one of

10

IV. AN AFFIRMANCE WOULD ENTAIL PREMATURELY

SECOND-GUESSING A REASONABLE ACCOMMO-

DATION OF ECONOMIC INTERESTS.

Reaching a due process claim it should have left to the state

courts, the Second Circuit held it irrational (A44) for Texas to

require full security without determining whether doing so is

justified on these facts. Even assuming the Texas courts would

decline to make that determination, it is hardly irrational for a

state to deem a trial’s completion a watershed, and to use that

event as the basis for shifting to the loser any risk of economic

loss if the trial result is later overturned.’ ‘“‘Once having

enacted a reasonable general scheme . . . [a state] [i]s not

required to provide for a prior individualized hearing each and

every time the provisions’ of the scheme adversely affect a

given party. New Motor Vehicle Bd. v. Fox, 439 U.S. 96, 108

(1978).”° Yet Texas might well have done just that—if Texaco

had only asked.

CONCLUSION

Far from posing a ‘‘narrow and unusual case [that] does not

merit plenary review’’ (MTA30), the decision below constitutes

a frontal and wide-ranging assault on judicial federalism and

principled adjudication—one that could not be upheld by this

Court without serious systemic consequences. Probable juris-

diction should therefore be noted.

mere issue preclusion. At least two other circuits have clearly rejected this

treatment. See, e.g., Brown v. Chastain, 416 F.2d 1012, 1013 (Sth Cir. 1969),

cert. denied, 397 U.S. 951 (1970); Ganev v. Barefoot, 749 F.2d 1124, 1127-28

(4th Cir. 1984), cert. denied, 105 S.Ct. 3484 (1985). Texaco’s contrary

assertion (MTA29 n.56) reveals a plain misreading of Thomas v. Kadish, 748

F.2d 276, 282 (Sth Cir. 1984), cert. denied, 105 S.Ct. 3531 (1985).

19. Applying such a flat rule would not remotely resemble a decision to

render an appeal ineffectual by denying counsel or a trial transcript to

indigent criminal defendants; or to allow ineffective assistance of counsel to

squander a criminal defendant’s appeal; or to allow a clerical snafu to

obliterate forever a civil plaintiff’s administrative cause of action. (See MTA

10 & n.18).

20. See also Weinberger v. Salfi, 422 U.S. 749, 772-74, 776-77, 782-83

(1975); Dandridge v. Williams, 397 U.S. 471, 484-85 (1970).

Respectfully submitted,

LAURENCE H. TRIBE

Counsel of Record

1525 Massachusetts Avenue

Cambridge, Massachusetts 02138

(617) 495-1767

Of Counsel:

JOSEPH D. JAMAIL

JAMAIL & KOLIUS

3300 One Allen Center

Houston, Texas 77002

HARRY M. REASONER

VINSON & ELKINS

3300 First City Tower

1001 Fannin

Houston, Texas 77002

ARTHUR L. LIMAN

MARK A. BELNICK

PAUL, WEISS, RIFKIND,

WHARTON & GARRISON

345 Park Avenue

New York, New York 10154

JOHN L. JEFFERS

G. IRVIN TERRELL

BAKER & BOTTS

3000 One Shell Plaza

Houston, Texas 77002

W. JAMES KRONZER

1001 Texas, Suite 1030

Houston, Texas 77002

PAUL M. BATOR

DOUGLAS A. POE

MAYER, BROWN & PLATT

231 South LaSalle Street

Chicago, Illinois 60604

June 10, 1986