El Paso Electric Co. v. Texas Department of Insurance
The Texas Supreme Court addressed whether the State Insurance Liquidator, acting as a receiver or conservator for an insolvent insurance company, qualifies as a 'state agency' under Chapter 105 of the Texas Civil Practice and Remedies Code. Chapter 105 permits litigants to recover fees and expenses if a state agency brings a frivolous claim. Reversing the lower courts, the Supreme Court determined that the receiver and conservator primarily perform a public, regulatory function under the ultimate control of the State Board of Insurance (or Department of Insurance). Therefore, their actions are attributable to the Board for Chapter 105 purposes. The case was remanded to the trial court to determine if the counterclaim was, in fact, frivolous.