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Bills being debated in the Texas Legislature would create two new statewide courts, which supporters say would be more efficient and lead to fairer decisions but opponents deride as unnecessary, politically motivated and potentially unconstitutional.
Senate Bill 1045 would create a 15th state appeals court with jurisdiction specifically in cases brought by or against the state of Texas; agencies, departments or boards of the executive branch; or state universities, including any of these entities’ officers. It would have five justices, elected statewide.
Senate Bill 27, with its companion, House Bill 19, would create a new state district court to hear business cases involving transactions larger than $10 million. It would have seven judges appointed by the governor every two years, and appeals would be heard by the new appeals court.
Texas has never had a specialized business court, though 26 states have some form of one. The Legislature last created a new appeals court in 1967, when it added a second court to the Houston area to manage caseloads in the state’s most populous region.
SB 1045 passed the Senate at the end of March, 25-6, and now sits in the House judiciary committee. SB 27 and HB 19 — a priority for House Speaker Dade Phelan — have not yet passed their respective chambers.
Business courts: Valuable expertise?
Corporate attorneys who testified in favor of the business courts idea at a Senate hearing March 29 said their clients value consistent, timely rulings. They said a court reserved for complex cases and run by judges with specific expertise in business law would provide both.
Under the existing system of district courts with general jurisdiction, large business cases often languish for years and soak up resources that are better used elsewhere, said lawyer Mike Tankersley of the nonprofit Texas Business Law Foundation.
“I think our judges are doing an amazing job, having been given a difficult, almost impossible task of having to manage these battleship-sized cases among the normal cases that the rest of the public has to see their rights adjudicated in,” Tankersley said. “Only a small fraction of cases will end up in this [new] court.”
Samuel Hardy, head of litigation for Dallas-based Energy Transfer, said some of the pipeline company’s cases have taken more than six years to resolve in Texas courts. Having a court that exclusively handles specific areas of business law would let judges with expertise make decisions more quickly.
“It is important that big commercial cases have a venue and a forum where their unique needs are met, where they don’t take away from family court and criminal proceedings, and they can be heard in a forum that will have the case resolved efficiently,” Hardy said.
Bryan Blevins of the Texas Trial Lawyers Association, which represents defense and plaintiffs attorneys, said the group opposes a business court because it would create two systems of justice. Because large companies can expect to have cases there frequently, opposing parties who are new to the court would likely be at a disadvantage.
“My clients expressed to me a concern predominantly of why … is there one set of justice for big companies and big claims versus my claim?” Blevins said. “How am I going to be treated in a court where the predominant players are large businesses and law firms?”
Lawyer Michael Smith of the Texas chapter of the American Board of Trial Advocates said the organization opposes the bill in part because members believe it would make cases more complex, not less, as parties fight over which court a case belongs in. And he warned that allowing the governor to appoint judges every two years would leave the system susceptible to political pressure, as parties with cases before the court could seek to influence the governor’s selections.
“This doesn’t give us an independent judiciary,” Smith said. “It gives us employees of the executive branch which are serving two-year terms.”
Does Texas need a specialized appeals court?
Texas needs a new court of appeals because issues impacting the state deserve to be heard by judges elected statewide, rather than the Austin-based 3rd Court of Appeals, said Sen. Joan Huffman, a Houston Republican and author of SB 1045.
These types of cases, she said, contain “complex and nuanced legal issues,” and the heavy workload has prompted the 3rd Court to transfer many cases elsewhere. A new court would help alleviate that problem.
“Creating a 15th intermediate court of appeals with statewide jurisdiction in civil cases brought by or against the state will allow judges to apply specialized precedent in subject areas important to the entire state,” Huffman told the Senate Jurisprudence Committee on March 22. “These are not regional issues; they are issues of statewide concern. Judges selected statewide should be deciding them, and they should be experts in these types of cases.”
Texans for Lawsuit Reform general counsel Lee Parsley, the only witness at the hearing to testify in favor of the bill, echoed Huffman’s argument about how voters statewide should be able to select the judges who vet the constitutionality of state laws.
Four Democratic appeals court justices testified against the bill, arguing that it is a solution in search of a problem.
Justice Gisela Triana of the 3rd Court of Appeals said the Legislature has published no studies justifying why a new court is needed, which has typically been the case with past judicial reforms. Her own research found that only about 10% of cases before the 3rd Court would have been transferred to the proposed court, or about 130 cases annually.
“Right now, the 80 (appeals court) justices we have statewide carry a load of about 130 cases each,” Triana said. “This court of five would basically be doing the work of one justice.”
Justice Cory Carlyle of the Dallas-based 5th Court of Appeals said a new statewide appeals court would be contrary to the Texas tradition of allowing citizens to appeal their cases to locally elected judges. He said it would also take power away from rural areas of the state, noting that of the 18 justices on the current statewide courts, the Supreme Court and Court of Criminal Appeals, 15 are from Dallas or Harris counties.
“It’s been that way for a long time, and I think we can accurately forecast where it will go from here with this court,” Carlyle said.
Are the proposed courts constitutional?
Several opponents argue that the proposed courts would be illegal.
The Texas Constitution requires appeals courts to have “appellate jurisdiction co-extensive with the limits of their respective districts,” which has been understood to mean each court must represent a particular geographic area of the state.
For district courts like the proposed statewide business court, it says “the State shall be divided into judicial districts.”
Amy Befeld, a lawyer with Texans for Lawsuit Reform, which supports the bill, noted the constitution also states the Legislature “may establish such other courts as it may deem necessary and prescribe the jurisdiction and organization thereof.”
The Texas Supreme Court has repeatedly given deference to state lawmakers in reshaping the courts as they see fit, Befeld said.
“In other words, the effect of the language is to place the subject at the complete disposal of the Legislature,” she said at the March 29 Senate committee hearing.
Are Republicans trying to pack the courts?
Opponents of both bills also see them as another attempt by Republicans to usurp power from Democrats, who have come to dominate elections in the state’s largest urban areas. Other bills proposed by Republicans this session would limit the ordinance-making power of cities and allow the state to take over local elections offices.
Most Texans recall the 2018 midterm elections as the time Democrat Beto O’Rourke came within 3 points of unseating U.S. Sen. Ted Cruz. But down the state’s notoriously long ballot, a Democratic wave swept through the judiciary. Democrats won 31 of the 32 contested elections for state appeals court seats. They became the majority on half of the 14 state appeals courts, when previously they had held seats on only three courts.
Between 2018 and 2022, the 3rd Court of Appeals switched from all Republican to all Democratic justices. Because the judicial district includes Austin, the seat of state government, most cases involving state laws, agencies or officials are filed there..
While the all-Republican Supreme Court can overrule appeals courts — and reversed the 3rd Court 10 times between 2016 and 2022, according to Triana — the high court hears fewer than 10% of filed appeals.
A new appeals court with justices elected statewide would likely result in an all-Republican bench. Democrats have not won a statewide office since 1994, and the two courts currently with statewide jurisdiction consist solely of Republicans.
“Given how adamantly Republicans have opposed ‘court-packing’ at the federal level in recent years, the hypocrisy is more than a little galling,” Steve Vladeck, a University of Texas law professor, wrote of the legislative proposals in a recent op-ed.
Huffman in 2021 authored a bill that would consolidate the 14 appeals courts into seven, a move Democrats said would allow Republicans to take control of at least five. She later withdrew the bill in the face of opposition.
In the March 22 hearing, Dallas Democratic Sen. Nathan Johnson asked Huffman if the new appeals court would result in a “dramatic shift in partisan affiliation” among the judges hearing cases involving the state. She downplayed the impact.
“As of today, but maybe not in five years,” Huffman said. “I can’t predict.”
Disclosure: Energy Transfer, Texans for Lawsuit Reform and Texas Trial Lawyers Association have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
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