Texas High Court Denies Review of $1.4 Million Sanctions Award

A Texas doctor is stuck with a $1.4 million sanction award against him for frivolous legal filings, with the state’s high court declining his petition for review Friday.

The sanction came in a long-running fee-shifting case between a doctor and two hospitals that has been appealed to the Texas Supreme Court three times.

Rahul K. Nath sued Texas Children’s Hospital and Baylor College of Medicine in 2006 for tortious interference with business relations and defamation. After the court granted summary judgment against Nath, the hospitals requested sanctions.

Nath was ordered to pay the hospitals a $1.4 million attorneys’ fee-shifting sanction—the largest sanctions ever imposed against an individual litigant, Nath said in his petition.

The first two times the Texas high court reviewed the matter, it reversed the sanctions award to reassess attorneys’ fees. However, the trial court awarded the same amount, after reviewing the hospitals’ affidavits where the entities declared that they hadn’t prolonged the suit to increase their fees.

On the second remand, the high court asked the trial court to allow the hospitals to present billing or other supporting evidence, but again the trial court awarded the same amount. Nath once again petitioned the high court for relief, alleging that he deserved a jury to determine the total award.

But the Texas Supreme Court denied Nath’s latest bid, a decision that Justice John Phillip Devine, dissenting, called a “disservice to Nath and repugnant to our constitutional safeguards.”

“This Court has repeatedly held that reasonableness and necessity of an opposing party’s attorney fees are fact questions that must be determined, if so requested, by a jury. Without explanation, it refuses to enforce that command here,” Devine said.

The court has never reviewed a case where attorneys’ fees awarded as sanctions could be hashed out by a jury, Devine said. Answering that question could be essential to protect individual litigants, he said.

Justice Brett Busby joined the dissent. Justice Jane Bland didn’t participate in the decision.

Enoch Kever PLLC and Brad Beers of Houston represented Nath. Texas Children’s was represented by Vinson & Elkins LLP. Norton Rose Fulbright LLP represented Baylor.

The case is Nath v. Tex. Childrens Hosp., Tex., No. 21-0547, 9/2/22.