In Re: MetroPCS Communications, Inc., Deutsche Telekom, T-Mobile USA, Inc., Roger D. Linquist, W. Michael Barnes, Jack F. Callahan, Jr., C. Kevin Landry, Arthur C. Patterson, and James N. Perry, Jr. v. --Appeal from County Court at Law No. 1 of Dallas County (opinion )

Annotate this Case

Download PDF

Writ of Mandamus Conditionally Granted; Opinion Filed January 8, 2013 in The Itizirt tif Appirnts 1±1! Thatiirt tif UiXt at ) a1tw3 No. 05-12-01577-CV IN RE METROPCS COMMUNICATIONS, INC.; DEUTSCHE TELEKOM; I -MOBILE USA, INC, ROGER D LINQU1ST, W MICHAEL BARNES, JACK F. CALLAHAN, JR.; C. KEVIN LANDRY; ARTHUR C. PATTERSON; AND JAMES N. PERRY, JR., Relators Original Proceeding from the County Court at Law No. 1 Dallas County, Texas Trial Court Cause No. CC-12-06144-A OPINION Before Justices Bridges, Lang, and Fillmore Opinion By Justice Lang This mandamus proceeding arises from a shareholder class and derivative action brought by real party in interest Adam Golovoy against relators for alleged breaches of fiduciary duty 2 respecting a proposed business combination involving MetroPCS, DT, and T-Mobile. Golovoy filed a motion for a temporary restraining order to enjoin several alleged deal protection devices pertaining to the proposed business combination, including, inter alia, (1) the issuance of any Rights Certificates to MetroPCS common stockholders pursuant to a MetroPCS Rights (lolovoy asserted in his petition that he is a shareholder of MetroPCS Communications, Inc. MetroPCS ) and that the underlying action was brought derivatively on behalf of [MetroPCSj and individually on behalf of the holders of MetroPCSi common stock. 2 Relators named as defendants in the underlying lawsuit were Deutsche Telekom ( DT ); T-Mobile USA, Inc. ( T-Mobile ); Roger D. Linquist; W. Michael Barnes; Jack F. Callahan, Jr.; C. Kevin Landry; Arthur C. Patterson; and James N. Perry. Jr. The latter six were described in the petition as members of MetroPCS s board of directors. Relator MetroPCS was named in the petition as a nominal party. Agreement dated March 29, 2007, and (2) compliance with a voting provision contained in section 45(h) of the agreement governing the proposed business combination (the Business Combination Agreement ). Relators filed (1) a motion to dismiss in which they asserted that a mandatory exclusive forum selection provision in MetroPCS s bylaws requires that this case be brought only in Delaware and (2) a motion to stay in which they requested the trial court to rule on their motion to dismiss before considering Ciolovoy s motion for a temporary restraining order. After holding a hearing on Golovoy s motion, the trial court signed a temporary restraining order dated November 16, 2012 (the TRO ). The TRO enjoined MetroPCS and its board of directors from causing or allowing the issuance of the Rights Certificates described above or complying with the voting provision in section 4.5(h) of the Business Combination Agreement. Additionally, in the TRO, the trial court set a November 29, 2012 hearing to determine whether the TRO should be made a Temporary Injunction pending a full trial on the merits. In their petition for writ of mandamus, relators request this Court to direct the trial court to (I) vacate the TRO, including the setting for the temporary injunction hearing, (2) deny Golovoy s motion for a temporary restraining order, and (3) grant relators motion to stay the case until relators motion to dismiss is decided. Because we conclude the trial court abused its discretion and relators 3 have no adequate remedy by appeal, we conditionally grant the writ of mandamus. I. FACTUAL AND PROCEDURAL BACKGROUND Golovoy contended in his petition that DT, T-Mobile, and the members ofMetroPCS s board ofdirectors (the Board ) breached fiduciary duties or aided and abetted such breaches in connection with DT and T-Mobile s proposed acquisition of [MetroPCS] at an unfair price via a Additionally, relators requested expedited relief by separate motion filed along with their petition for writ of mandamus, Pursuant to that motion. in a November 20. 2012 order, this Court stayed the temporary restraining order at issue and the temporary injunction hearing described therein until further order of this Court. 2 recapitalization pursuant to the Business Combination Agreement According to Golovoy, the per share value ofthe Proposed Acquisition drasticallyundervalues [MetroPCS s] worth and prospects. Further Golovoy asserted the terms ofthe Proposed Acquisition were designed to ensure the sale of [MetroPCS] to one buyer, and one buyer only on terms preferential to DT, T-Mobile, and the Board, and to subvert the interests of plaintiff and the other public stockholders of [MetroPCS]. Specifically, Golovoy contended The Board breached its fiduciary duties by agreeing to preclusive deal protection devices in connection with the [Business Combination Agreement] [MetroPCS] entered into with T-Mobile [and DTJ. These provisions, which collectively preclude any competing offers for [MetroPCS], include: (i) a no-solicitation provision that precludes [MetroPCS] from providing confidential [MetroPCS] information to, or even communicating with, potential competing bidders except under extremely limited circumstances; (ii) a matching rights provision that allows T-Mobile [and DT] to match any competing superior proposal; and (iii) a termination fee provision which obligates [MeIr0PCS] to pay T -Mobile [and DT] a $150 million termination fee in the event the Proposed Acquisition is terminated in fhvor of a superior proposal. Golovoy contended in part that unless enjoined by the trial court defendants will consummate the Proposed Acquisition, and plaintiff and the other [MetroPCS] shareholders will forever lose their equity interest in [MetmPCS] for an inadequate price, all to the irreparable harm of plaintiffand the other shareholders of[MeIr0PCS]. The reliefrequested in the petition included, inter alia, awarding damages to MetroPCS; declaring the Business Combination Agreement unlawfhl and unenforceable ; rescinding, to the extent already implemented, the Business Combination Agreement, including the onerous and preclusive deal protection devices ; and [e]njoining defendants, their agents, counsel, employees and all persons acting in concertwith them from consummating the Proposed Acquisition, unless and until defendants disclose all material information to [MetroPCS s] shareholders in advance of the shareholder vote on the Proposed Acquisition necessary for [MetroPCS s] shareholders to be able to make a fully informed decision -3- on the Proposed Acquisition. On the day after the petition was filed, Golovoy s counsel of record, Jamie McKey, filed a Verification in which she testified, 1 have read the Shareholder Derivative and Class Action Petition for Breach of Fiduciary Duty. The facts stated in it are within my personal knowledge and are true and correct. On November 5, 201 2, Golovoy filed a Motion for a Temporary Restraining Order and an Order Compelling Expedited Discovery. In that motion, Golovoy asserted in part [T]he Board has agreed to a number of unfair contractual terms in the merger documents that are designed to take freedom of choice, and any hope for a better deal, away from shareholders. Each day that passes with those unfair contractual terms in place decreases the likelihood that a better offer will be made for the Company, and increases the likelihood that shareholders will be disenfranchised and otherwise irreparably harmed. Accordingly, time is of the essence, and the Proposed Acquisition and the unfair contractual terms agreed to by defendants should be restrained and enjoined so that a fair and open process can take place. Golovoy restated the contentions in his petition respecting the undervaluation of MetroPCS and the three alleged preclusive deal protection devices described therein. Further, in the motion, Golovoy stated in part On October 3, 2012, [MetroPCS] entered into an amendment to the its [sic] Rights Agreement, dated as of March 29, 2007, by and between [MetroPCS] and American Stock Transfer & Trust Company, LLC, as Rights Agent (the Poison Pill ). The amendment makes [MetroPCS s] Poison Pill inapplicable to the Proposed Acquisition, but keeps the Poison Pill in place as to all other potential acquirers of [MetroPCS] (the Poison Pill Lock-Up ). That means that if a potential acquirer other than [DT and] T-Mobile attempts to launch a tender offer for more than 15% of [MetroPCS s] outstanding stock, or even announces an intention to do so, a flip-in event, will occur that allows existing [MetroPCS] shareholders to buy more [MetroPCS] shares at a discount, making [MetroPCS] prohibitively expensive for any buyer.,. As such, the Poison Pill Lock-Up is an onerous and inappropriate deal protection device that has the immediate and absolute effect ofdiscouraging potential acquirers from making a competitive and superior bid for [MetroPCS] in the form of a tender offer directly to [MetroPCS s] shareholders. . In addition the Business Combination Agreement also contains a force the vote provision. MetroPCS cannot terminate the Proposed Transaction even if a competing bid is made unless [MetroPCS] holds its shareholder vote and shareholders vote no. Rather than insisting on a fiduciary out that would permit the -4- board to terminate the Proposed Acquisition in the event a higher otter came along, the Board instead agreed to a forced vote on the Proposed Acquisition regardless ot any helter deals. See Briscoe Dccl.. Ex. A at 4.5(h). These lockups are simply un1ur and should he restrained and enjoined. Golovov s counsel of record. Willie C. Briscoc. tiled an afhdavit dated November 5. 2012. in support o (olovov S motion for a temporary restraimnu order and order compelling expedited discovery, in that aflklavit, Briscoe testi hed as follows: I make this declaration in support of Plaintiffs Motion fbr a Temporary Restraining Order and an Order Compelling Expedited Discovery. I have personal knowledge of the matters stated herein and, if called upon, I could and would competently testify thereto. * . . . 2. Attached is a true and correct copy of the following exhibit: Exhibit A: [Business Combination Agreement] between Deutsche Telekorn AG, I Mobile USA. Inc. and MetroPCS Communications, Inc.. dated October 3, 2() 12. I declare under penalty of perjury under the laws of the State of Texas that the foregoing is true and correct. Attached to Briscoe s affidavit was a copy of the Business Combination Agreement. On November 12, 2012, relators tiled a Motion to Dismiss or Stay (the Motion to l)ismiss ). In the Motion to Dismiss, relators asked the trial court to dismiss or, in the alternative, to stay this action in favor of parallel litigation in Delaware based on a mandatory forum selection provision in MetroPCS bylaws and in the interests of comity. Attached to relators Motion to Dismiss was a document titled Fourth Amended and Restated Bylaws of MetroPCS Communications, Inc., which stated in part [T]he Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, [or] (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation s stockholders. . Additionally, on that same date, relators filed an Opposition to Plaintiffs Motion for lemporary Restraining Order and Expedited Discovery. which included a Motion to Stay (the Motion to Stav requesting the trial court to rule on relators Motion to Dismiss before considering Golovov s motion for a temporary restraining order and expedited discovery. In opposition to the motion for a temporary restraining order. relators argued in part Plaintiff s Motion is not verified, and the only evidence tiled by Plaintiff is the Affidavit of Plainti ft s counsel which does nothing more than authenticate the Business Combination Agreement between MetroPCS, Dl and T-Mobile. Plaintiff has not tiled any evidence of the prerequisites for obtaining injunctive relief under the Texas Rules of Civil Procedure 4 1) a probable right to relief, (2) probable injury, (3) imminent harm, (4) irreparable injury, and/or (5) an inadequate remedy at law. Further, in their Motion to Stay, relators objected to the trial court ruling on Plaintiffs Motion before first ruling on the MetroPCS Defendants Motions. A hearing on (lolovoy s motion for a temporary restraining order and order compelling expedited discovery was held on November 14, 2012. Counsel for Golovoy argued in part that DT, T Mobile, and the Board colluded to agree to the five deal protection devices described above, which are standing in the way of other buyers from coming forward. Golovoy asked the trial court to restrain operation of two of these provisions : (1) the poison pill lockup and (2) the force the vote provision. Further, Golovoy requested an accelerated preliminary injunction hearing to determine whether relators should be permanently restrained from enacting and keeping in place these deal protection devices. As to the forum selection provision in question, Golovoy contended in part that the provision was unenforceable because the Board had the power to unilaterally change the bylaws and thus there was no mutual bargaining power or mutuality of obligation respecting the provision. Additionally, counsel for Golovoy stated, it s clear that this if the [trial court] has any inclination to agree with their forum selection clause that s robbing [the trial court] of the ability to adjudicate the case, then there needs to be full briefing on it. Finally, Golovoy (1) 6- contended the rules o I civi procedure do not require a verified complaint in order to obtain a temporary restraining order unless you don t give notice and (2) argued his complaint was verified and he had submitted all the evidence that is necessary for the [trial court] to riecide this issue today. Counsel for relators asserted. jilter a/ia, their arguments described above. Further, relators contended Golovoy had not met the verification requirements of Texas Rules of Civil Procedure 680 and 682 because (here s no verified or sworn evidence of any of the elements for a TRO or injunctive relief See TEX. R. Civ. P. 680, 682. On November 15, 2012, Golovoy filed a letter from Briscoe to the trial court to clarify which provisions of the [Business Combination Agreement] result in the Poison Pill Lockup discussed in plaintiffs TRO papers. The letter stated [t]here are two relevant provisions: (I) section 3.3(v), which carves out the merger between Meti-o PCS and [DT/T Mobile] from application of I MetroP(S s] Rights Agreement, or Poison Pill and (2) section 4.5(b)(iv). which precludes the Metro PCS modifying the Poison Pill to carving other potential competing proposal from application of [MetroPCS s] Poison Pill. Further, the letter stated Plaintiff s TRO motion seeks to suspend operation of the Poison Pill in its entirety. Doing so would not require any amendment to the [Business Combination Agreement], it would just restrain the relevant parties, as described in the proposed TRO order, from issuing the Rights connection with the Rights Agreement, and thus restrain the triggering of the Poison Pill. On that same date, relators filed(l ) a postargument submission in opposition to Golovoy s motion and (2) objections to Golovoy s proposed order. Relators objections included, in part, the following: 1. The proposed order does not contain a ruling on (i) Defendants objections and Motion to Stay contained in the MetroPCS Defendants Opposition to Plaintiffs Motion for Temporary Restraining Order and Expedited Discovery (the Opposition ). The MetroPCS Defendants object to the Court s failure and refusal to rule on their objections and requests contained in the Opposition. 2. The proposed order is issued without a court determination that venue is proper or that Plaintiffs have standing. 3. The proposed order contains actia findings without any evidentiary support. The relief granted requires evidentiary support. 4. The proposed order seeks to enjoin the MetroPCS Defendants from taking action under the Rights Agreement, which is not in evidence. The Business Combination Agreement cannot serve as evidence of the Rights Agreement. In response, Golovoy filed a letter from Briscoe to the trial court in which Briscoe stated in part, There is no reason why the [trial court] cannot rule on the TRO now and address the stay/dismissal issues later. In the TRO, the trial court stated, in part, as follows: The Court finds that harm is imminent to Plaintiffs and if the Court does not issue the Temporary Restraining Order, Plaintiffs will be irreparably injured because of the Individual Defendants implementation and maintenance of [MetroPCS s] shareholder rights plan (the Poison Pill ) and the inclusion of the force the vote provision in §4.5(h) of the Business Combination Agreement as deal protection devices, in conjunction with other defensive measures, to eliminate potential acquirers from making a competitive and superior bid for [MetroPCS], or any other offer that would have been made absent the adoption and maintenance of the defensive measures. Additionally, the TRO stated, This Order shall not be effective unless and until Plaintiffs execute and file with the County Clerk a Bond in conformity with the law in the amount of $500,000.00. (emphasis original). 4 This mandamus proceeding followed. Ii. RELATORS REQUEST FOR MANDAMUS RELIEF A. Applicable Law Mandamus will issue if the relator establishes a clear abuse of discretion for which there is The record does not show a bond has been filed, 8 no adequate remedy by appeal. In re Odyssey Hen flhcare, Inc., 310 S.W.3d 419, 422 (Tex, 201 0) tong procLeding) In te Deeie & Co 299 S W 3d 819 820 (fex 2009) (oiig proccLdlng) In re Prudential Ins, Co. ofAm., 148 S.W.3d 124, 135 36 (Tex. 2004) (orig, proceeding). A trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial ermr of law or if it clearly fails to correctly analyze or apply the law. In re Cerberus C apitalMgmt., L.P.. 164 S,W.3d 379, 382 (Tex. 2005) (orig. proceeding); In re Tex. Am. Express, Inc., 190 S,W.3d 720, 723 (Tex. App. Dallas 2005, orig. proceeding); see In re Jorden, 249 S.W.3d 416, 424 (Tex. 200$) (orig. proceeding) ( [a] trial or appellate court has no discretion in determining what the law is or in applying the law to the facts, even if the law is somewhat unsettled. ). In determining whether appeal is an adequate remedy, we consider whether the benefits outweigh the detriments of mandamus review. In re BP Prods. N.Am., Inc., 244 S.W.3d 840, 845 (Tex. 2008) (orig. proceeding); see also In re GulfExploration, 289 S.W.3d 836, 842 (Tex. 2009) (orig proceeding) ( Fheu. is no definitive list of when an appeal will be adequate, as it depends on a careful balance of the casespecific benefits and detriments of delaying or interrupting a particular proceeding. ). B. Analysis 1. Abuse of Discretion In four issues, relators contend the trial court abused its discretion by (1) granting [the TRO] and ordering a temporary injunction hearing despite a pending motion to dismiss based on a mandatory exclusive forum selection clause in [MetroPCS s] bylaws requiring that this case be heard only in the Delaware Court of Chancery ; (2) refusing to rule on Relators Motion to Stay the case until after a ruling on the Motion to Dismiss raising the issue of the mandatory exclusive forum selection provision ; (3) granting a temporary restraining order without any verified facts, affidavits 9 or other evidence supporting the findings in the lR( ) ( )rder or establishing a valid claim, probable ri2ht of recovery, or any imminent irreparable harm, in violation oil LX, R. CiV. P. 6 2 and (4) enjoining contractual provisions that are expressly permitted by controlling Delaware law, We consider these issues in turn. a. Satisfaction of Requirements For lemporary Restraining Order First, we address relators third issue. in which they contend the TRO was granted in violation of Texas Rule of Civil Procedure 682. (iolovoy responds [t]he trial Court correctly concluded that because Texas Rule of Civil Procedure 680 and not Rule 682 addresses temporary restraining orders, and because notice was given, no verified petition or evidence was necessary Further. Golovoy asserts that even if a verified petition and/or evidence were a necessary prerequisite fbr issuance of a TRO, both were present here. Specifically, Golovoy argues he submitted a verification for his petition through his attorneys and also submitted evidence at the hearing, in the form ofthe Business Combination Agreement that set forth the relevant provision that Plaintiff was seeking to enjoin, the Poison Pill Lock Up and the force the vote provision. Section five of the Texas Rules of Civil Procedure is titled Injunctions and contains rules 680 through 693a. See TEx. R. Civ. P. 680--693a. Rule 682, titled Sworn Petition, provides [n]o writ of injunction shall be granted unless the applicant therefor shall present his petition to thejudge verified by his affidavit and containing a plain and intelligible statement of the grounds for such relief TEx. R. Civ. P. 682. Verified by his affidavit means proved to be true or correct. City ofArlington v. Dallas-Fort Worth Saftv Coach Co., 270 S.W. 1094, 1095 (Tex. Civ. App. Fort Worth 1925, no writ). It has been held that the verification must be direct and in such positive terms as would sustain a charge of perjury or false swearing, if the verification should prove to be false, and the affidavit must show to have been made on the personal knowledge of the affiant as to -10 the truth of the allegations verified Id. Rule 680, titled Temporary Restraining Order, provides in part that [n]o temporary restraining order shall be granted without notice to the adverse party unless it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before notice can be served and a hearing had thereon. Tgx. R. Civ, P. 680. According to Golovoy, (1) rule 682 addresses writs of injunctions, not temporary restraining orders and (2> rule 680 provides that a TRO may issue without a verified petition or an evidentiary showing of irreparable harm as long as notice of the TRO is provided to the adverse party. l-lowever, while rule 680 provides specific requirements pertaining to granting a temporary restraining order without notice, that rule does not mention or specifically address situations in which notice respecting a temporary restraining order has been provided to an adverse party. TEx. R. Civ. P. 680. Further, [a] temporary restraining order is basically a writ of injunction within the meaning of TEX, R. CIV. P.682. Williams v. Bagley, $75 S.W.2d 808, 810 (Tex. App. Beaumont 1994, no writ); see Spakes v. Weher, No. l0-08-00313-CV, 2010 WL 139955, at *3 (Tex. App. Waco Jan. 13, 2010, pet. denied) (mem. op.) ( A temporary restraining order is one of three forms of injunctions which may be issued by a court. ). Additionally, rule 687, which sets forth the requisites for a writ of injunction, provides specific requirements in the event such writ of injunction is a temporary restraining order. TEx. R. Civ. P. 687(e). Accordingly, we cannot agree with Golovoy that a temporary restraining order is not a writ of injunction subject to the requirements of rule 682. Further, on this record, we cannot conclude Golovoy met the requirements of rule 682. Even In support ofhis position, Golovoy cites Town of Palm Valley V. .Johnson, 17 S. W.3d 281, 288 (Tex. App. Cous Christi 2000, pet. denied) for the proposition that [al verified petition for injunctive relief is not required when a full evidentiary hearing on evidence independent of the petition has been [heIdi. However, the record supplied to us shows no such full evidentiary hearing was held in the case before us, and Johnson is therefore inapposite, See Id. ... Il assuming without deciding that his petition was properly verified, the petition did not address or mention the poison pill lockup or the force the vote provision the two deal protection devices (iolovov sought to restrain via his motion for a temporary restraining orde r ---nor did the petition request the injunctive relief that was the subject of his motion. Therefore. Golovoy s petition did not contain a plain and intelligible statement of the grounds for his requeste(l temporary restraining order. See TEx. R. ( iv. P. 62. In an affidavit pertaining to Golovoy s motion for a temporary restraining order and order compelling expedited discovery, Briscoe stated in part, I have personal knowledge of the matters stated herein and, if called upon, I could and would competently testify thereto. Additionally, Briscoe (1) stated that a true and correct copy of the Business Combination Agreementwas attached and (2) declared under penalty of perjury that the fhregoing is true and correct. Briscoc s affidavit, at most, authenticated the Business Combination Agreement. See Dallas Port Worth Sa/tr (ac /i Co., 270 S.W. at 1095. Golovoy asserts in his response in this Court that [e]vidence of the Poison Pill Lockup --what Relators prefer to call the Rights Agreement -was in the record. Further, according to Golovoy, [t]he trial court concluded that the collective effect of the provisions were operating to preclude competing bidders from emerging, and depriving shareholders of receiving a premium for their shares and [t]hat is sufficient under the law to support a conclusion of irreparable harm. In support of his position, (iolovoy cites (1) argument by his counsel during the hearing on his motion and (2) a Delaware case, Police & Fire Ret. Svs. v. Bernal, No. 4663-CC, 2009 WL 1873144, at *2 (Del. Ch. June 26, 2009). Golovy does not explain, and the record does not show, how argument by his counsel at the hearing constitutes evidence. Further, unlike the case before us, Bernal involved a motion to expedite proceedings pertaining to a request for injunctive relief. Jd. at * 1. The court in Bernal did not address the requirements for granting a temporary restraining order, See id. Consequently., we do not find Bernal persuasive. While the authenticated Business Combination Agreement attached to Briscoe s affidavit shows the terms of the proposed business combination, it does not show the effect of such terms or demonstrate that any other potential bidders have been deterred, as argued by Golovoy. Further, the l3usiness Combination Agreement does not contain the MetroPCS Rights Agreement, dated as of March 29, 2007, which Golovoy described in his motion as the Poison Pill and sought to suspend in its entirety. The record shows no verified facts or evidence other than the Business Combination Agreement to support the TRO. Therefore, we conclude the trial court abused its discretion by granting the TRO. See Tux. R. Civ, P. 682: see also Operation I?escue-Nat 7. v. Planned Parenthood of Houston & Se. Tex., 975 S.W.2d 546, 560 (Tex. 199$) ( a trial court has no discretion to grant injunctive relief.., without supporting evidence. ). We decide in favor of relators on their third issue. In light of our disposition of relators third issue, we need not address relators fourth issue. b. Priority as to Relators Motion to Dismiss Next, we consider together relators first and second issues, in which they assert the trial court abused its discretion by (1) not staying Golovoy s motion for a temporary restraining order and order compelling expedited discovery until after deciding relators Motion to Dismiss pursuant to the mandatory exclusive forum selection provision and (2) refusing to rule on relators Motion to Stay. Golovoy responds in part that no abuse of discretion can be attributed to the trial court for deferring a ruling on an unsettled, non-jurisdictional legal issue that was not even before the trial court, to address the more immediate concerns of irreparable harm raised by Plaintiff s TRO, which was the only issue set for hearing that day. 13 The Texas Supreme Court has consistently granted petitions for writ ofmandamus to enforce forum selection clauses because a trial court that improperly refuses to enforce such a clause has clearly abused its discretion. hi reALMS hivestor Servs.. Inc.. 304 S.W.3d 371, 374 (Tex. 2010) (orig. proceeding) (citing In re AIU Ins. Co., 148 S.W.3d 109, 114 15 (Tex. 2004) (orig. proceeding)); see In reLisa Laser USA, Inc., 310 S.W.3d 880, 883 (Tex. 2010) (orig. proceeding) ( A trial court abuses its discretion when it fails to properly interpret or apply a forum-selection clause. ) (citing hi re Laibe Coip.. 307 S.W.3d 314 (Tex. 2010) (orig. proceeding)); accord hi re AutoNation, 228 S.W.3d 663,667 70 (Tex. 2007) (orig. proceeding). hi re AuloNation involved a suit filed in Florida by relator AutoNation, Inc. against Garrick Hatfield to enforce a covenant not to compete. See 228 S.W.3d at 664. In the employment contract containing the covenant, AutoNation and Hatfield had agreed to litigate any disputes arising under the contract in Florida under Florida law. Id. Hatfield later sued AutoNation in Texas under the contract. Id. The Texas trial court declined to dismiss or stay the Texas action and enjoined AutoNation from pursuing its Florida lawsuit Id. AutoNation filed a notice ofaccelerated appeal ofthe trial court s injunction order, and the following week it filed a petition for writ of mandamus in the court of appeals. Id. at 666. The court ofappeals denied mandamus reliefon grounds that an adequate remedy at law was available to AutoNation, namely its earlier-filed interlocutory appeal. Id. AutoNation filed a petition for writ of mandamus in the Texas Supreme Court, seeking relief from the anti-suit injunction and dismissal or abatement ofthe entire case pursuant to the mandatory forum selection clause. IS The court of appeals proceeded to decide and issue an opinion in the interlocutory appeal of the injunction order, concluding [blecause the Texas Supreme Court has held that flmdamental Texas public policy requires application of Texas law to the question of enforceability of a non-compete agreement, we are unable to hold that the trial court abused its -14- discretion in issuing an injunction to halt the Florida proceeding and allow the Texas case to proceed to triaL Id, at 667. The supreme court conditionally granted AutoNation s petition for writ of mandamus. Id. The supreme court observed that [s]ubjecting a party to trial in a forum other than that agreed upon and requiring an appeal to vindicate the rights granted in a forum-selection clause is clear harassment harassment that injures not just the non-breaching party but the broader judicial system, injecting inefficiency by enabling forum-shopping, wasting judicial resources, delaying adjudication on the merits, and skewing settlement dynamics contrary to the parties! contracted-for expectations. Id. at 667 68. Further, the supreme court stated that its decisions regarding the propriety of mandamus relief in forum-selection cases comport with the principle that parties generally have the freedom to negotiate agreements as they see fit. Id. at 66$. The court concluded that under controlling precedents on forum-selection clauses, the parties bargained-for agreement merits judicial respect, and the dispute should be heard in the Florida action as the parties contracted. Id. at 669 (citing In re Automated Collection Tech., Inc., 156 S.W.3d 557 (Tex. 2004) (orig. proceeding); in reAIUJns. Co., 148 S.W.3d at 109). in the case before us, relators Motion to Dismiss and Motion to Stay were filed prior to the hearing on Golovoy s motion for a temporary restraining order and order compelling expedited discovery. Further, the forum selection provision in question was addressed by both Golovoy and relators during the hearing and in the parties post-hearing filings, which included an objection by relators to the trial court s failure to rule on their objections and Motion to Stay. The record does not show the trial court ruled on the Motion to Dismiss or the Motion to Stay before signing the TRO. On this record, we conclude the trial court abused its discretion by granting injunctive relief without first ruling on relators motions respecting the forum selection clause in question. See id. 15 at 668 70: see a/so In re Boehme. 256 S.W.3d 87%. 880 (Tex. App. Houston [14th Dist.] 2008, orig. proceeding) (mandamus relief granted to overturn temporary injunction order and dismiss case based on forum selection clause). We decide in favor of relators on their first and second issues. 6 2. Adequate Remedy Finally, we address relators assertion that they lack an adequate remedy by appeal. Relators argue [a]llowing the TRO Order to stand, and allowing the temporary injunction hearing to proceed as ordered, deprives Relators of the benefits of the forum selection clause, violates the requirement that injunctive relief be supported by prooi maintains a clear and prejudicial error of law, and interferes with a multi-billion dollar transaction and itself could cause irreparable harni to the many MetroPCS stockholders who have not complained and those who honored the Bylaws provision for any litigation to occur in Delaware. Thus, relators contend, the benefits of mandamus review outweigh any detriments. Golovoy argues [t]here arc no urgent circumstances present here justifying the extraordinary remedy of a writ of mandamus. Specifically, according to Golovoy, because he has not yet executed and filed a bond as required by the TRO, the TRO Order is not ripe for judicial review by this Court. Additionally, Golovoy asserts because it is unknown how the trial court will rule on defendants Motion to Dismiss or Stay, Relators application for mandamus is premature. In support of his argument that the TRO is not ripe, Golovoy cites to a concurring statement involving a criminal case. See Lizcano v. C hatharn, No. WR-68,348-02, 2011 WL 4596044, at *1_2 (Tex. Crim. App. Oct. 5, 2011) (orig. proceeding). However, unlike the case 6 To the extent relstors first issue is construed to raise the merits of the arguments asseed in their Motion to Dismiss respecting the validity of the forum selection provision in question, we conclude mandamus relief respecting that portion of relators first issue is not available because the trial court has not yet had a hearing orruled on the Motion to Dismiss. See In re Sierra Club, No. 08 I 2 00236- C V. 2012 WL 5942912, at *4 (Tex. hi Paso Nov. 28. 0 2, orig. proceeding). - --16 before us, Lin.uno involved a discovery order the court concluded was vague. See Id. Because Lizcano is distinguishable on its facts, we do not find it persuasive. In the case before us, the record shows the trial court has signed the TRO. Golovoy cites no authority, and we have found none. supporting the position that, on these fads, the TRO is not ripe. Further, while the record does not show a ruling on relators Motion to Dismiss or Motion to Stay, the relief requested by relators in this Court pertains to obtaining a ruling on those motions before moving forward with other matters in the case. [bus, we cannot agree with Golovoy that the fact that it is unknown how the trial court will ultimately rule on relators motions renders their petition for writ of mandamus premature. Generally. an appellate remedy is inadequate when a trial court improperly refuses to enforce a forum-selection clause because allowing the thai to go forward will vitiate and render illusory the subject matter of an appeal i.e., trial in the proper forum. In re Lisa Lacer, 310 S.W.3d at 883 (citing In reAlU Ins. Co., 148 S.W.3d at 115); see In reAuto Nation, 228 S.W.3d at 668 (failure to enforce contractual forum selection clause constitutes a clear abuse ofdiscretion for which there is no adequate remedy by appeal ) (citing In re Automated Collection Tech., Inc.. 156 S.W.3d at 558). Further, the Texas Supreme Court has stated that because temporary restraining orders are not appealable, a party agiinst whom a temporary restraining order has been granted has no remedy by appeal. In re Office ofAttorney Gen., 257 S.W.3d 695,697 98 (rex. 2008) (orig. proceeding); see Hamilton Guar. Capital, LLCv. Orphan House Prods., LLC,No. 05-I 1-01401-CV. 2012 WL 2359881, at *1 (Ta. App. Dallas June 21, 2012, no pet.) (mem. op.). In the case before us, the record shows the trial court granted Golovoy s motion for a temporary restraining order and set a temporary injunction hearing without deciding relators pending motions respecting enforcement ofthe forum selection provision in question. Accordingly, on this record, we conclude relators lack an adequate remedy by appeal. See In re Lisa Lacer, 310 17 S.W.3d at 883; hi re Q/Jice ofAtiornev (len.. 257 S.W.3d at 697 98; hi re AntoNotlo,,, 228 S.W.3d at 668; hi ri Auiwnaiecl C olkction Tech., Inc. 156 S.W.3d at 558; hi re AIU Ins. C o., 148 S.W.3d at 115; Lf In re Team Rocket, L.P.. 256 S.W.3d 257.262 (Tex. 2008) (orig. proceeding) (mandamus relief proper where trial court subjects taxpayers, defendants, and. . . the state s district courts to meaningless proceedings and trials by ma[king] no effort to follow venue nile). Ill. CONCLUSION We decide in favor of relators on their first, second, and third issues. We need not address relators fourth issue. Because we conclude relators have shown the trial court abused its discretion and they have no adequate remedy by appeal, we conditionally grant relators petition for writ of mandamus. A writ will issue only in the event the trial court fails to (1) vacate the November 16, 2012 TRO, including, the setting for the temporary injunction hearing on November 29, 2012; (2) deny Golovoy s motion for a temporary restraining order; and (3) grant relators motion to stay the case until relators Motion to Dismiss is decided. DOUGLA 121577F.P05 -18- .LANG

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.