Texas Supreme Court Justice Evan A. Young called the new business court “the most significant overhaul of the state’s judicial system since 1891.”
Jerry Bullard, a Fort Worth attorney with more than 30 years of experience, is one of the first 10 judges. He was appointed by Governor Abbott to the Fort Worth division of the court. Bullard said he is happy in private practice and never imagined he would become a judge until a member of the bar encouraged him to apply for appointment.
“While I was happy to become a practicing physician, it was the call to service and the encouragement of others that led me to where I am today,” Bullard said.
Here’s everything you need to know about the new court system.
structure
The new court system aims to reduce the burden on the rest of the state’s judicial system by offloading complex business-oriented cases to judges with expertise in dealing with business law. Before September, these cases would have remained on state district court records.
Parties can bring suit either in local court or in the new business court system. Still, the new judicial system will only handle governance cases where the dispute exceeds $5 million, cases involving publicly traded companies, contract disputes and other “qualified transactions” where the amount exceeds $10 million.
The Business Court is divided into 11 divisions throughout the state of Texas. Five divisions are already operational, covering the state’s largest cities and surrounding counties.
Texas Business Court judges, unlike state district courts, issue written opinions. Bullard said he looks forward to writing the opinion and that the purpose behind it is to build precedent for business courts on how Texas law handles specific disputes.
“I think it benefits everyone,” Bullard said of writing an opinion piece. “It’s a benefit for the parties, it’s a benefit for the lawyers, and it’s a benefit for the public because the public knows what the court is doing and why it’s doing it.”
The new system adds Texas to the list of more than half of U.S. states that already have a business court system.
Ryan Wooten, a partner at the Orrick law firm who specializes in complex litigation, said Delaware’s equity is one of the reasons why more than 60 percent of Fortune 500 companies are first incorporated in the state. He said it was in court.
“For Texas to create a (business) court suggests that they want to create a court that looks similar to the courts in Delaware,” Wooten said. “Texas is saying to companies, ‘Come here, we’ll have a court that will help you resolve disputes in a very sophisticated way, and you can trust this state.’ I think so.”
Governor Abbott said these courts will provide more efficient and therefore lower cost decisions for companies doing business in Texas. He also spoke about the importance of having judges with experience in business matters adjudicating business disputes.
“Historically, there are people who are making business cases without any understanding of what’s going on in the business world,” Abbott said. “[Texas companies]deserve to hire well-qualified judges who have extensive experience either as former judges or as litigators who have been deeply involved in business litigation.”
What makes the new business court unique is that judges will be appointed by the governor rather than elected by ballot box, as is the case in state district courts. The governor’s nomination then requires approval by the Texas Senate. This is similar to the Delaware courts, except that Delaware judges’ terms are 12 years, while Texas Business Court terms are only two years.
Mr Abbott said he was closely involved in the nomination of the 10 business court judges, knowing they would be under intense scrutiny as the first to take office.
Opponents in the Business Court and the accompanying Court of Appeals have already expressed dissatisfaction with the new system. Adrian Shelley, Texas state director for the progressive advocacy group Public Citizen, was critical of the new court’s staffing.
“Moving from a court where certain cases are heard by elected judges to a court where certain cases are heard by judges appointed by the governor is concerning to us,” Shelley said.
Appointed judges may not reflect the ideology of the community, Sherry said. He was particularly concerned about how it would affect the environmental issues that make up much of his group’s work in Texas. Appeals of these types of cases brought against state agencies will be heard in the new statewide 15th District Court of Appeals, rather than in the Democratic-leaning Travis County Court, as will corporate court cases. It turns out.
Five of the 13 judges appointed to the New Business Court and the New Court of Appeal were found to have worked on behalf of fossil fuel companies, according to a report by investigative news organization The Lever. All three judges of the new Court of Appeals were among these five.
At his swearing-in ceremony, Mr. Abbott alluded to criticism of the judge’s appointment and expressed his views.
“It doesn’t mean it’s predetermined who’s going to win or who’s going to lose,” Abbott said. “It is predetermined that there will be well-qualified judges who can ensure that cases get the attention they deserve and the knowledge they deserve.”
background
The Business Court was created when House Bill 19 was signed by Governor Abbott on June 9, 2023. A few months earlier, Abbott was in North Texas defending these new courts when he spoke to business leaders at the Arlington Chamber of Commerce.
KERA and WFAA reported that the governor critically assessed the legal situation of Texas businesses.
“Our court system, especially in our big cities, is a travesty of justice and operates out of the state of Texas,” Abbott said during a February 2023 hearing.
The governor, a former Texas Supreme Court justice, elaborated on these issues during his swearing-in speech in Fort Worth.
“The truth about our justice system is that the courts are gridlocked,” Abbott said. “Too many cases, whether civil or criminal, are being held up, delayed, not adjudicated, or not decided, which in some sense obstructs justice.”
The latest statewide data from the Office of Court Administration shows approximately 18,000 civil cases pending in Texas district courts from September 2023 to February 2024. In the case of civil litigation, the clearance rate, which indicates whether the court is keeping up with the number of cases, was 87%. A rate below 100% indicates that the court processes fewer cases than is filed.
Mr. Abbott and his colleagues in Congress see the new court system as a way to alleviate the problem by moving complex business cases to specialized courts staffed by judges experienced in those matters.
Mr. Abbott emphasized that Texas’ economy has grown to a size larger than that of Brazil, Italy, Russia, and Canada, and reaffirmed the need for a business court.
“We need a legal process system that can meet the inevitable challenges that arise in a situation of this magnitude,” Abbott said.
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