The Tyler court’s March 26th PetroFac decision ties into some very hot Texas Supreme Court versus Texas Legislature drama over the SCoTX’s 2007 Entergy case.
In PetroFac, the Tyler court relied on the Business Organizations Code to interpret the Business Corporations Act. The Tyler court felt this was appropriate because the Texas Legislature said the Code did not make any substantive changes to the Act. Instead, the Code is a “plain language” restatement of what is already in the Act.
That logic was undercut in Entergy. At issue in Entergy is the ability of premises owners to claim the benefit of the workers’ compensation exclusive remedy provision under the Labor Code (aka, the “Comp. Bar”). The Texas Supreme Court read a recodified section of the Labor Code to extend that protection to premises owners, in spite of the Legislature’s statement that the recodification was non-substantive. The exact words of the Texas Supreme Court were: “The general statement that a recodification is not intended to effect substantive changes does not, however, override the plain wording of the statutory provisions directly in issue in this case.” Entergy Gulf States v. Summers, ___ S.W.3d ___, 2007 WL 2458027 at *3 (Tex. 2007)(emphasis added).
State Representative Bryan Hughes and three other state lawmakers filed an amicus brief objecting to the Entergy decision. The lawmakers used plain wording of their own, like “void” and “unconstitutional.”
These lawmakers were certainly concerned about the Entergy court’s reading of the Labor Code, but expressed broader concerns that the decision “foretell[s] a trend with respect to all of the other recodifications ….” Like, say, the Business Organizations Code.
The Texas Supreme Court has granted rehearing of this controversial case.