Texas Court’s Wider Authority Invites Shopping, Deluge (Correct)

An appeals court Texas launched in September to hear complex business matters and litigation involving the state instead is opening its doors to every type of civil case.

The legislation creating the Court of Appeals, Fifteenth District, gives an appealing party the choice of filing a case there or in the district associated with the trial court that decided the matter, the justices concluded in a stunning, split decision last month.

The development threatens to overwhelm the three-justice court, disrupt its intended purpose, and potentially bless state-level judge shopping to the all-Republican court based in Austin.

Two other appeals courts disagree and say the Fifteenth Court should stick exclusively to business and state cases, a split which has elevated the fight to the Texas Supreme Court. The high court hadn’t weighed in as of Friday.

“We’re waiting with bated breath,” said Stephen Barrick of Hicks Thomas LLP, who tried unsuccessfully to block the Fifteenth Court from hearing a client case that lacks state interest or complex business issues.

Rather than issue the decision about its wider jurisdiction in an easily found opinion, the Fifteenth Court added letters to dockets in two under-the-radar cases, which has kept the issue out of the spotlight.

“Very few people have any conception this is brewing,” Barrick said.

Barrick, representing the prevailing party in an oil royalty dispute, said his opponent is “exploiting some poor drafting in the statute.”

The legislation, known as S.B. 1045, prevents the state’s other 14 intermediary district appeals courts from intruding on the Fifteenth Court’s exclusive jurisdiction to hear matters involving the state or litigation arising from Texas’ new business courts. However, it doesn’t prevent the Fifteenth Court from hearing issues beyond state and business cases, the majority wrote in nearly identical decisions dated Jan. 6 and Jan. 13.

In a dissent, Chief Justice Scott Brister wrote “it would be inappropriate” for the court to entertain appeals in a broad array of cases and “inevitably shift time and attention away from our primary tasks.”

‘Clean-up’ Bill

The Fifteenth Court opened on Sept. 1, days after the Supreme Court rejected a constitutional challenge that sought to stop it. Filled by three Republican justices appointed by Gov. Greg Abbott (R), the court supplanted an all-Democratic Austin appeals court that had been hearing appeals in cases brought by and against the state.

Abbott’s office didn’t respond to a request for comment about the jurisdiction question.

The lawmaker whose House bill created the court, former state Rep. Andrew Murr (R), said he never intended to open the court to all civil matters.

“I expressly explained to my colleagues in the House that its jurisdiction was not similar to the other 14 existing courts of appeals,” Murr said.

Murr added: “I fully anticipate a clean-up bill,” in the current legislative session, which began in January and will wrap in June.

Lee Parsley, president of Texans for Lawsuit Reform, which urged lawmakers to create the court, said limiting its jurisdiction to state and business cases “ensures that such appeals are resolved in a timely manner, and most critically, enhances Texas’ reputation as the best state in the nation to incorporate, headquarter, and do business.”

Two Cases

Appeals in two cases triggered the question of wider jurisdiction—Devon Energy Production Company, L.P. v. Oliver and Kelley v. Homminga.

Angie Olalde of Greer, Herz & Adams LLP opposed the Fifteenth Court hearing the construction defect dispute in Kelley, but acknowledges “we have a lot of good legal minds looking at this and coming to different decisions.”

Opening the court to nearly any civil appeal means “you’d be looking at a pretty unmanageable docket quickly,” she said.

About 150 cases comprise the court’s docket, the vast majority of them involving state matters or complex business litigation. Few lawyers have attempted to stretch the court’s jurisdiction.

Olalde’s opponent, Brad Snead of Wright Close & Barger LLP, filed the appeal with the Fifteenth Court and called it a “positive development” that the court kept it.

He defended the move on the grounds that business disputes in most of the state must be tried in regular trial courts and not business courts, which are only in Houston, Dallas, Fort Worth, San Antonio, and Austin. The losing party ought to be able to appeal those cases to the Fifteenth Court but can’t unless the court embraces this broader jurisdiction, he said.

“If one of the Fifteenth Court’s aims is to develop a consistent and predictable body of jurisprudence in Texas, it is important that it has the jurisdiction to hear and decide these cases—even if they were not originally filed in the business court,” Snead said.

The case is Kelley v. Homminga, Tex. App., 15th Dist., No. 15-24-00123-CV, 1/6/25 and Devon Energy Production Co. v. Oliver, Tex. App., 15th Dist., No. 15-24-00115-cv, 1/13/25.