Prelude to the Busin ...

Prelude to the Business Court and 15th Court of Appeals: More Questions Than Answers | Tyler Talbert

June 13, 2024 | by D. Todd Smith

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The Texas legal landscape will change significantly on September 1, 2024, with the launch of the Business Court and the 15th Court of Appeals. While the start date is set, many details are still uncertain. In this episode, Tyler Talbert, a board-certified civil appellate lawyer from Waco, joins hosts Todd Smith and Jody Sanders to delve into these groundbreaking new courts. Among the topics covered are what practitioners should expect when the courts open, the strategic implications for litigation, and the potential challenges that lie ahead. Tyler shares insights on the specialized jurisdiction of the Business Court, the statewide reach of the 15th Court of Appeals, and how these changes could reshape legal practice in Texas.

Our guest is Tyler Talbert from Waco. Welcome to the show, Tyler.

It’s good to be here.

Appellate lawyers in Texas, we’re a tight-knit group. Jody and I know you, but why don’t you give an introduction for our readers who may not know you?

I do appellate work in the big city of Waco. I grew up around here. I went to Baylor undergrad. It’s always interesting to hear how people became lawyers. I was one of the ones who took the meandering route. I never intended to be a lawyer until the 11th Hour came. I was destined to join the Peace Corps. A girl I had met and fallen in love with. I said, “I might not be back when you come back from Columbia or the Congo.” I changed plans. Several years later, after law school, I am practicing appellate.

Tell us about how you got into appellate law since the law wasn’t on the horizon, at least at one point in your post-college life. How did you make the decision to go to law school? Tell us about what you did there.

I prepped myself. I studied in Argentina, Costa Rica, and Peru. I’m prepping myself to live somewhere different. I learned Spanish and French. On the 11th Hour, I thought, “Let’s stay here. Let’s make this work.” The girl I fell in love with is now my wife. We would’ve gotten off to a weird start had it been some other woman.

That’s quite a lead-in.

I made that assumption, but I’m glad you confirmed.

The way I pursued that was by thinking, “What skills do I have?” At that point, it was writing, research, and arguing. I’d done an undergrad. I sought out a program that did international law. I found a guy at Case Western Reserve. He’s a man when it comes to international law. He said, “Look at the end of your degree. If you want a job at the ICJ, the International Court of Justice, and the ICTY, The International Criminal Tribunal for the former Yugoslavia, you’ve got it. I can get you that.”

At some point, it’s like a mag. I got attracted to appellate work. I interned with a trial court judge and an intermediate court of appeals judge. I spent a summer with the Supreme Court of Texas. I loved the research, writing, and analytical. What is the law? Why is the law that way? How do we do that? I’ve been attracted to it and found my way there.

In practice, you’re now a partner with a named partner these days with a firm there in Waco. You’re a board-certified civil appellate lawyer. You’ve got all your bonafide at this point. It’s always interesting to hear people’s paths to not only the profession but to doing what it is that we do for a living. There is every variation you can think of, and some are out there. That’s interesting. I didn’t know that about you.

I spent a few years doing trial work, thinking that is what an attorney should be. You’re in the courtroom. You’re cross-examining witnesses. It’s high-stakes, snap decisions. After several years, I realized I could hold my own, but that wasn’t what I loved doing. A couple of things came across my desk several years ago. It clicked that analytical finding an answer. There’s great value there, as we all know in Texas law.

It’s so much more genteel than trial work and conducive to family life because I know you’re a busy dad of twin boys. I would imagine that doing what you do for a living now is much easier for you to have more time at home and spend time with your family than it would be if you were going around doing trial work.

I can get out of here at 5:30, spend the evening with my children, and have dinner. If I need to hop on and crank out a brief after I put them to bed, there’s no reason I can’t work from 9:00 to 2:00 or whenever I need to. There are those few weeks a year where we do trial support. You’re in Dallas or Austin, and that’s how it is. It is much more conducive to a family life than the 9:00 to 5:00 litigators.

We’ve been meaning to have you on the show from a general perspective because we like to talk to our peers and get different perspectives from folks who practice in different cities. Waco is a unique place. What we thought about talking with you about today was a while back, you did a presentation to the business disputes CLE about the upcoming business courts. That is still a hot topic here in our state, as we are now on the countdown.

When you did that presentation, it seemed like maybe something was off on the horizon. It was a whole year away, but now we’re heading into the throes of summer. September 1st, 2024, is fast approaching. We thought it’d be a good idea to have you on and have a three-way conversation about business courts and, hopefully, the 15th Court of Appeals because, as we were talking about before we started recording, it’s still unclear how this is going to work even though a lot of people are talking about it. We thought we would get the three of us together.

In addition to whatever else comes up, we workshop those topics and see if we can maybe get a better understanding of what we can expect heading into this. Before we started recording, you had indicated that one of the reasons for speaking about this way back in September 2023 was to start talking to lawyers about preparation, even though things are uncertain about what lawyers can do to get ready. Why don’t we launch into that topic of business course?

In the genesis of this presentation, that thought process was like last summer. I was talking to a justice and one of his clerks. I said, “How are you all going to handle this new 15th Court of Appeals?” Part of the 15th Court of Appeals is that they will take existing cases on their dockets. If they fall within the 15th Court of Appeals, they transfer them over. I said, “Are you flagging those cases? Are you going to try and get them out quickly? Are you going to hold them and send them?” We had a back-and-forth.

The justice also responded. He said, “What are you all doing, practitioners, to get ready for the business court?” I thought, “That’s a good question.” I assumed it would barrel at us, and we would all figure it out. That thought process was, “Are there things we could be doing now to prepare for the business courts? Are there clauses or language we should be thinking about inserting into contracts now that we might avail ourselves 90 days from now? Are there strategic decisions about when to file?

Might sit on a case for another six months if I wanted to be in business courts. Might I go ahead and file it now if I want to avoid it? Do I omit an arbitration clause because I want to be in business courts?” Even supplemental jurisdiction. If this went south, could I get all my claims in one form? There are lots of ways that strategic practitioners can position themselves for the forthcoming business court. I’ve not seen that get a lot of attraction or attention. That’s something I wanted to flag for discussion.

Let’s talk about it. You’re doing what I was going to do.

One of the things that is novel about this bill is that it’s not a business court for everyone. It comes September 1st, 2024. The business court structure is what I’ve called the Texas two-step. About half of the operating districts in Texas, the judicial administrative regions, will get business courts. Think about the big urban centers, Dallas, Fort Worth, Austin, San Antonio, and Houston, where five of those eleven districts will have business courts come online in 90 days on September 1st, 2024.

Business Court: One of the things that is novel about this bill is that it’s not a business court for everyone come September 1, 2024.

It’s about 150 plus counties because your rural counties are less populated. The other six districts will not get a business court until September 1st, 2026, and even then, only if the legislature funds it. That opens up tons of possibilities. If I wanted to be in a business court, I would think about how to get a venue within one of those operating districts. If, for some reason, I didn’t want to be in business court, I’d be thinking about how to file to avoid business courts. This piecemeal implementation lends itself to people who have thought ahead. That’s one aspect of how you could make use of some of the gray areas in the build to your advantage.

Let’s talk about what types of cases are going to end up because it’s now codified in Chapter 25A of the government code. What are we looking at when we say business court? What’s going on there? To the extent we know.

Let’s start with the basics. 25A of the government code is going to create a business court. I sometimes slip up and call it business courts, but it is a business court with multiple operating districts. We think the Western District of Texas. It’s in Austin and Waco. It has got multiple districts. It is a specialized court that handles business disputes.

When we talk about business disputes, I’ve heard practitioners say, “It’s four tiers. It has three categories.” I like to think of it as two big categories. The first is business governance disputes. Disputes about how the company is being run. That’s my shorthand for it. You can read the statute derivative proceedings and proceedings related to an entity’s organization affairs, securities claims, and breach of duties by the controlling persons.

Those categories of claims think business governance disputes where the amount and controversy exceeds $5 million. A quick caveat here is that it is economic damage. We’re not talking about statutory penalties, liquidated damages, attorney’s fees, or court costs. We’re talking damages. Your first category is those business governance disputes.

There’s a little wrinkle there because if you are a publicly traded company, you’re in. If you’ve got a business governance dispute, we don’t care if it meets the $5 million threshold. That’s a big deal. We get you in. That’s category number one. Category number two is what we call commercial disputes. My shorthand there is, do you have a contract dispute that involves more than $10 million where somebody was going to give, exchange, sell, and trade items, services, or things worth more than $10 million? If so, you’re in that second big category. You are the commercial disputes.

We could make use of that. What’s going to become interesting when we talk about starting to plan ahead is the supplemental jurisdiction aspect. Those claims are in. We know that. If there are related claims, there’s this open question mark. Could you get other claims in? That’s going to be the source of a lot of dispute there.

It feels like a Federal court. The court is going to take it or not. You may not know until you get there, unfortunately.

When I say supplemental jurisdiction, that could mean anything. I like to call it piggyback jurisdiction because it’s easier for me to think of. If you’ve got a qualifying claim that is making its way into business court, could you put something on its back and make its way over there? The answer is yes, generally, but what’s fascinating is that it conditions the ability to do that on everybody’s agreement. You have to want to take your claim there. The other side has to agree, and not just that. The judge has to agree, “Yes, these are claims arising from the same action or controversy that I do feel comfortable exercising jurisdiction over.” That’s going to lead to some disputes about piecemeal litigation versus getting everything done in a single forum.

Do you have any sense, and I don’t know if anyone has or has not looked, of how many cases would fall that are out there in business court jurisdiction?

I’ve asked everybody I can find that question. That’s the million-dollar question. I’ve asked that of judges, justices, the rulemaking committee, Jerry Bullard, and people pinning memos about why it’s a good idea or a bad idea. There’s not a good sense out there about how many cases are going to make their way over there.

That’s some of the justification for why we heard that it was a two-step system. They said, “Wouldn’t it be terrible if everyone went online and all these judges were sitting there twiddling their thumbs going, ‘I wish I had some cases?” One of the explanations was, “Let’s put it in the big urban centers where we know there will be at least some of these disputes, and let’s see if we need more elsewhere later.” It could be floodgates or crickets. I have no idea at this point.

I was making the comment before we started recording that the more I look at this, the more confused I get. We’re used to certainty. We like certainty even though we work in gray areas and that level of uncertainty in terms of not knowing what the docket’s going to look like. We make observations like that on the show. We follow it up by saying, “It’s great news for appellate lawyers.”

That’s true here because there are going to be whole issues of transferring venues and pleas to the jurisdiction. We’re not even talking about the constitutional challenges to the court mandamus. Removal and remand. Do we need to start drafting opinions for our business court judges, who now have to issue written opinions, not pro forma orders?

One thing that I don’t know, and piggybacking off of this, is what the staffing is going to look like. Are these judges going to have staff attorneys more like the appellate judges? Are they going to be like a lot of our trial courts in Texas on their own out there relying on the parties to draft their orders and now, in this case, opinions?

Uncertainty is certainly the name of the game. It creates this environment in which folks like us and folks who want to sit down and scrutinize the law are valuable because what do clients want? They want certainty. Business clients say, “It’s the law. It should be black and white. I should know what to expect.” You go, “I hear you. You’re right. If there wasn’t the gray, I wouldn’t have a job. We wouldn’t exist.”

Business Court: Uncertainty is certainly the name of the game. It creates this environment in which folks who want to sit down and scrutinize the law are valuable.

In terms of injecting uncertainty, you’re right, Todd. Who are the judges going to be? Who will their staff be? Where will they sit? We’ve not even touched the threshold question. Is that constitutional? It is a ripe area for folks to go in and make sense of this law. As far as one of your specific questions, are they going to have staff?

My understanding is that that’s the intention that they would. What I saw in the bill is they have been funded in those first five operating districts. They will have two judges each. You’re going to have ten judges come online On September 1st, 2024. Ten million was the amount that was appropriated. Jerry Bullard will send me an email if I get that wrong. They have funding for the judge’s operations staff facilities. The bill says, “We’re asking you all to sit in existing facilities. You can sit anywhere in your district you want. There’s no reason for us to create a big new fancy business court.”

The intention was they would have staff. That intention is manifested in the opinion writing portion, where we now have rules that say, “Yes, we do want opinions in certain circumstances.” We should expect these to be high-functioning, quick-moving, robust, savvy courts that have the staff to support that operation.

You mentioned the judges. They have different qualifications than your typical district court judge. They’ve got to have some specific experience in business or business transactions or judicial experience to even get appointed. That’s a different take on it.

What the statute says is that we want folks who have at least ten years of experience practicing complex civil business litigation, practicing business transaction law, serving as a judge, or any combination of those. That goes hand in hand with the past several years of effort to scrutinize who our judges are. We’re not talking about business courts.

Over the past several years, we’ve seen even filing requirements. Your court of appeals justices have to file these disclosures that say, “Here’s my experience and qualifications.” Who our judges are has been a topic not from Chief Justice Hect and every one of his state of the judiciary addresses, but that’s something that’s been at the forefront of our collective mind here, which is fascinating. You see it borne out in the text of the statute.

One of the interesting features of the judges is they are relatively short-term. I’ve heard it said or asked many times in conversations with other lawyers and some of our elected judiciary who are serving a minimum of four-year terms, “Whoever heard of a business dispute being resolved in two years. It’s this refrain that I hear repeated often these days.

That may be true, but that two-year term is going to be interesting because they can be reappointed, as I understand it, but there’s no guarantee of reappointment. It’ll be interesting to see if there are reappointments after the first two years. If there are not, and you’re bringing in somebody new, it seems like it nullifies one of the potential benefits of the court, which was to have judges be up to speed on more specific cases and types of cases than they would’ve been if they were the usual district judge assigned and sitting in some rural county in Texas.

I don’t have a good explanation for why that’s the case. I could make one up. I invite people to correct me. Cunningham’s law is the best way to get an answer. It’s not to post a question on the internet but to say the wrong answer. I don’t know why. The two-year term is fascinating because Texas was intentional about looking at other jurisdictions and how they had modeled and crafted their business courts.

Texas didn’t create this in a vacuum. Texas is now the 30th state to have some specialty chancery business court. Texas looked to Delaware and New York. We like to think, “We’re not California. We’re not New York.” You talk about geographic diversity. New York was a good template. I’ve seen some good case studies comparing Delaware, North Carolina, Georgia, and Wyoming. Each of those has longer than two-year terms. Most of them have an appointment process. Some of them have nominating committees. I don’t know what the thought process was on the two-year. It certainly lends itself to the exact questions you ask. Can we get this done? Are we going to have to educate a new judge?

My assumption was simply that because we’re doing the two-step rollout you talked about, we’re not 100% sure that we’re going to have business courts beyond a two-year term.

Maybe that’s something to change. We’ve heard Jeff Leach say, “There’s no such thing as perfect legislation. This bill will be tinkered with.” As we see it roll out, we go, “We need to adjust here. We need to toggle here, assuming that the appointment of judges is constitutionally kosher.”

It’s another question because we don’t have any judges sitting for election, which makes it completely unique from every other court in the state.

We’re all curious about who the judges will be. We’re now 90 days out. We all saw the Texas Law Book article that said, “Here are a handful of people who’ve thrown their hat in the ring, but we don’t know who the judges are going to be now.” I can’t help but think that some of that constitutional uncertainty is lending itself to the reticence to apply because it would be a weird entry on your resume that it said, “It’s business court judge until it was found unconstitutional.” I don’t want to be that guy.

There is so much uncertainty surrounding it that it’s hard to throw your hat in the ring for a job that may or may not exist for a while.

There are several interesting things. One, they structured the 15th Court of Appeals differently. That’s an elected position but with statewide elections. Two, the legislature was thoughtful about structuring this bill in a way that they thought would survive constitutional scrutiny. They may be tweaks, tinkered with it, and changed the wording of this. There are fail-safe provisions.

It does a couple of things that say, “If and when the constitutionality is challenged, we’re not wasting time in Travis County or Harris County or any of these courts. You’re going straight to the Supreme Court of Texas.” Imagine being the lawyer who gets to handle an original proceeding. Are you cross-examining witnesses with Chief Justice Heck and sustaining your objections? Two, it says, “If it’s held unconstitutional, they go out of their way to address the scenario in which it’s unconstitutional.” They say, “We’re going to staff it with visiting judges until we figure something out.”

That was an issue that was hotly contested. You can find memos from TTLA, the Texas Trial Lawyer Association, and Texas For Lawsuit Reform. Both ways are opining on the constitutionality of these issues. People like Steve Vladeck and a qualified attorney practitioner have given their opinions on this. Uncertainty is the name of the game. It’s going to be a wild year coming up.

The idea of appointing retired or former judges to sit as visiting judges is interesting, but we have objections to visiting judges. It can be made in trial courts when they’re appointed to sit. Is there a procedure that’s going to be adopted for objecting to a visiting judge on a business court? There may not be an answer to that. It’s one more little tidbit of uncertainty out there.

As I read the statute, it’s subject to the same rules. You could object in the same way you could at the trial court. By and large, what the legislature wants to do is make the rules we use in district and business court unless there’s some alteration there. That’s the case.

That might be a good segue to talk about the rules. The Supreme Court has now issued preliminarily approved rules for the business courts. Those came out back in February 2024. It does seem, from viewing them, and the same is true for the 15th Court of Appeals rules, the rules advisory committee and the court have tried to fit the structure of those and the logic of those within what we’re used to dealing with already as trial and appellate lawyers. Let’s focus first on the business court since that’s what we’ve been talking about. Are there any features of the proposed rules that stand out in your mind, Tyler?

I did not post any comments. Last I looked, there was one comment, which I thought was interesting. They were straightforward to me. They did not wait off and answer questions of uncertainty. They codified what I thought we all could probably glean from the text. The only one that I thought there was an ounce of uncertainty that they clarified was the written opinion requirement. The statute says, “The Supreme Court of Texas and the rules advisory committee will promulgate rules for whether opinions are required or not.”

The intention always was that we wanted opinions, and we got that. What does Rule 359 say? Yes, we do want you judges to be authoring opinions when and what it says now is in connection with a dispositive ruling on the request of a party or any issue important to the jurisprudence of the state, regardless of the request.

You can see this intention that we want a robust, rich body of law that practitioners can come to and go, “I know what to expect.” What happens afterward? Are those opinions binding on other districts? Are they binding on successors? The judge who comes in three years from now, what do we do with those opinions? I don’t know that any of us know.

Going back to the Federal court model, we’re used to Federal district judges writing opinions in cases, but those are generally seen as persuasive authority. They don’t bind anybody. Only decisions from a higher court can bind a lower court. It’s unclear to me what stare decisis value those opinions are going to have.

The other thing that strikes me about it is looking at Rule 359. You’re going to issue a written opinion in connection with a dispositive ruling on the request of a party. That’s against the usual way that trial judges deal with dispositive rulings in terms of explaining their reasonings for those decisions. Is this separate and apart from findings of fact and conclusions of law? Those aren’t appropriate for dispositive rulings.

New judges are taught. I’ve been told this whole rule-and-run idea. I’m thinking mostly about this in terms of the context of summary judgments. You don’t want to explain your ruling because you have a better chance of getting your summary judgment affirmed if there are multiple grounds and you’re not disclosing the ground that it’s ruling you’re ruling upon. This is another area where it’s like, “This is a different animal.” It’s more what we see in Federal court than general state practice.

One area you touched on is how if at all, this is going to change some of the post-judgment proceedings. We are all trying to be careful when we file motions for a new trial and request findings of fact and conclusions of law, knowing that those extend out certain deadlines when we would’ve otherwise had a final judgment that we need to appeal. Is it like a Federal court? The judge says, “Yes, I’m disposing of the case on summary judgment.” You say, “I want an opinion, Judge. Do you have a final judgment? Do you still need to request findings of fact and conclusions of law? What do you do in those questionable finality issues?” It’s going to inject more uncertainty.

That’s the name of the game.

You’re going to have a lot of room, particularly for permissive appeal in those situations, because if you have a dispositive ruling, that may not dispose of the whole case. There you go. You’ve got a great opinion to send it on up to the court of appeals and say, “Take this for us.”

I could see the wheels turning in your head on that, Jody, when we were first talking about this subtopic because you’re going to have a permissive appeal from a business court with a potentially dispositive ruling. How do those two rules overlay each other? I know It’s yet to be determined. Going back to my statement earlier about how I get more confused every time I look at this, there are many unanswered questions. We’re going to have to get down in the trenches and slug it out to find out the answers. This is between the three of us, but it’s not. I get excited about that.

I’ve heard the TCPA, the Anti-SLAPP Act referred to as the Appellate Lawyer Full Employment Act, and it may be the business court’s 15th Court of Appeal statutes that are going to be for a few years.

Identifying areas that are ripe for dispute. That’s one of them, post-judgment, permissive stuff, fighting about the amount and controversy. How much are we going to dig into that removal issue? You’ve got a 30-day clock. If it’s not agreed, when should a practitioner have reasonably discovered facts that they should have been in business court?

The biggest question mark for me, other than the constitutionality aspects, is conducting trials. How are you going to do it? Where do you do it? There’s a little bit of guidance there. That was the one area in the rules that I thought I would’ve liked some more clarity on the actual trial procedure. The ambiguities in the statute have led people to say, “I’m reading articles that say, ‘It’s not even clear to me that the business court judge would be the judge to preside over trial rather than a district court judge.” I’m going, “Hold on that. That’s crazy.” I’m reading it from respected practitioners. I read, and I go, “I could see some ambiguity there. I don’t agree with it, but weird uncertainties like that that someone will argue about it at some point.”

Yeah, because it’s not clear which county it’ll be in. Where do you draw your veneer from? Do you get a jury trial where there’s going to be some litigation over that all of that stuff because it is vague in the statute, and the rules don’t articulate it because they can’t necessarily, based on how the statute reads and all the various permutations that could possibly happen here? If you can have a trial in any county in which the case could have been filed, you’re going to have to have a fight about what that is because if you filed it in one county, that necessarily excludes other counties.

One of my favorite ambiguities is 25A015B. It says what you said. Let’s say you file within an operating district like in Harris County, but another party was in El Paso, in Brownsville, or somewhere without an operating district. There was also a venue there. You’ve got venue facts in both portions. It says, “It shall be held in any county in which the case could have been filed under the general venue statute.” Are you going to hold a business court trial outside the operating district? It seems you might be able to elect to do that, but it also sounds crazy.

As a plaintiff, you can potentially file in one place and have a trial in another, which has some big implications across the state of Texas as to who your veneer or judge is going to be.

We love our literal, plain-language statutory interpretation in our state. I hadn’t even thought of that one. That’s going to be interesting to watch.

I’ll tell you something I was excited about who made it, and I’ll reveal a little bit of my plaintiff’s bent, which I was glad that they preserved the right to a jury trial. It’s right there in the statute that says, “You have a right to a jury trial. What was fascinating to me, figuring out the lay of the land, is that it is not the norm by any means.

When I was talking about states like Delaware, North Carolina, Georgia, and Wyoming, the notion from practitioners was it would be antithetical to the business courts to create this nice system for complex, sophisticated parties and put people in the street off of it. They wouldn’t understand our complex disputes. That rubbed me the wrong way. I’m glad we still have the jury system, but you’ve seen states tinker with their constitutions to make sure they can get their statutes right in a constitutionally compliant way. I was glad that I made it in there.

It preserves good options for planning because do you put a jury waiver in your contract? It gives the parties a choice because if you want to fast-track something, you can elect not to have a jury trial. If you’re the plaintiff or the defendant, you still have the right to do so for that matter. You can make your election, which is good to have both because I can’t imagine serving on a jury for some of the things that look like they might be going to the business courts. That’s all right. I’m hopeful that people will.

It’s interesting that coming off the heels of the pandemic and Zoom jury trials, the statute doesn’t provide for remote jury trials. It goes so far as to say, “No remote evidentiary hearings.” There are good and bad. You could argue both sides of that. For courts with broad geographic jurisdiction, that’s an interesting play. I didn’t know if you had any further thoughts on that, Tyler.

I thought what they struck out seemed to represent the consensus amongst courts that if everyone is in agreement on a remote proceeding, we’re fine with it. We’re not going to categorically when it comes to hearings. You don’t need to drive to Lubbock to have a motion for continuance if everybody says, “Yeah, let’s do it by Zoom. What it says is, “We want to allow remote proceedings, but we’re not going to require you to do so. We are not going to mandate that you have to do it absent your agreement.” Oral testimonies are being presented. That’s fair. I like the notion that we’re leaning into an option if it works, except in evidentiary-type situations.

Let’s talk for a minute about the removal and remand part because that’s interesting, and anyone who practices in Federal court is used to it, but that’s unique for Texas State Court. What does that look like?

If you know you have a business dispute case, you could file directly in business court. That’s the easy one. The more pressing and thornier one that you talked about, Jody, was what happens when you file in district court and you have a case that is subject to the business court’s jurisdiction. It creates a removal procedure. You have a 30-day clock in which you discovered or reasonably should have discovered facts establishing the business court’s jurisdiction. If that’s you, like Federal court, you file your notice of removal. You’re supposed to file it in the district court as well as in the business court, and you get ferried over it.

You can have the same fights that you have in Federal court. Is it subject to removal? Do we remand that the 30-day clock doesn’t apply if the parties agree to it? The legislature was thoughtful about making sure that that didn’t become a quagmire. They say, “It’s not subject to the due order of pleadings rule. Because you file one of these motions or these removals, you’re not waiving challenges to personal jurisdiction or venue.”

They wanted to make sure that it gave parties a clear conduit to business courts where they could litigate all those disputes. That’s going to be the first issue that gets litigated. Do I belong in business court at all? I thought that was one of the areas where we had some solid guidance as to the mechanisms, timing, and procedure and how that all would work.

One question I have on the remand is how it is going to be reviewed. When can it be reviewed? Was it going to be a mandamus? Is it going to be an appeal? What do you do there? In Federal court, some types of remands are reviewable, and some aren’t. It’s not clear here what that’s going to look like.

I hadn’t thought of that. It has implications for the court’s review of the order. Am I appealing the initial order of removal that came from the district court, or am I appealing the remand order that came out of the business court? That might dictate whether or not I’m in the 15th Court of Appeals or the 3rd Court of Appeals.

Somebody needs to create a flow chart.

We’re going to do it by way of one appellate opinion at a time, Todd.

My OCD mind wants it all to be so that I know where things are going to be. As we’ve said, knowing it upfront takes some of the fun out of it. It’ll be interesting.

It will be a wild time to be practicing law. You all have been practicing longer than me. They’re an equivalent. It’s a poor analogy, but people talk about tort reform in ‘03, where wholesale med-mal defense lawyers put themselves out of business with a statute. Do you think there has been a change this seismic over the past several years?

This is going to be bigger. I was around for House Bill Four back in ‘03. People didn’t know what had happened until it was too late. It’s the exact example you gave, Tyler, of suddenly, there are whole mid-mal law firms gone because they couldn’t sustain themselves anymore or they tried to pivot to intellectual property. Here’s something like that, which did happen.

That and the first several years of the TCPA were the biggest seismic shifts I can think of over the last several years. This has the look of something that’s going to be even more significant because you’ve got new courts, statewide stuff happening, new removal remand procedure, and constitutionality. The difference is you won’t see it in everyday cases for so long. Even to some degree, this still happens. If you file a certain case in district court, you’re gonna have a TCPA motion to dismiss. You’re going to have to jump over that hurdle time and time again. We’ve seen that scale back a little in the last couple of years since there’s been some tightening up of the statutory language under the TCPA.

This is like that, but on a different scale and maybe a narrower but also a lot deeper. It’ll be interesting to see what happens. We hadn’t even gotten to the 15th Court of Appeals yet, which is another major topic of interest for us. With that segue, can we spend a little time talking about the 15th court? I know your focus and your paper were on business courts, but like Jody and me, appeals are what you do. Let’s spend some time talking about the 15th.

The 15th went hand in hand with the business courts. The way it’s structured now is that any appeal of orders, rulings, or judgments coming out of the business courts will feed up to the 15th Court of Appeal. What are the basics of the 15th Court of Appeals? It is a court with statewide jurisdiction to handle. The shorthand is thinking of big governmental disputes about the policy of the government. Are we challenging the constitutionality of a statute or how a particular agency makes its decisions or runs? Those big governmental policy things. That’s how I think of the 15th Court of Appeals. The business court’s decisions will go there.

What’s interesting is that all orders that come out of the business court starting September 1st, 2024, will go up there, but it will inherit some cases. It doesn’t have to wait to get new cases until after September 1st. Courts of Appeals that have cases that fall within that jurisdictional call are required to send them over. That’s what I was asking in Justice, “Is your goal to get them all out before that or send them over with your work in progress?” What’s interesting is the change or the differences. They chose to make that court elected on a statewide basis rather than appointed. That’s the high point of the 15th Court of Appeals, which will certainly change some of what we do. It has its own ambiguities, but less.

One feature that strikes me as much as any is that, on a statewide basis, we’re not used to a court that has to take appeals as a matter of right. You’re like, “What’s the real difference between this court and the Supreme Court other than the finer jurisdictional points that you mentioned?” The biggest one to me is you have an appeal as a matter of right from a final judgment, whether it’s going to be out of the business court or more traditional courts. We haven’t had anything other than discretionary jurisdiction as a statewide court.

You have the potential to see. They’re going to turn out more cases and opinions eventually. This is going to take some time to ramp up, but they don’t have the luxury, unlike the Supreme Court, picketing choosing their cases. That court could be potentially. This is another one of those seismic changes that come out of this overall legislative package. You’re gonna see a lot of law being developed out of the 15th Court of Appeals in the cases that it decides, which raises the issue. This has been talked about elsewhere about what that law is going to be because that court has no horizontal stare decisis going in.

We have a little bit better of a handle on how many cases will wind up in that court. When I asked the same question, and this time to appellate justices and intermediate ones, “How many cases are you thinking you all will transfer over?” By and large, the ones outside of Austin are saying, “5 to 10 cases.” Those cases were already getting filed in Travis and going up to the third. You’ll see the third lose a little bit of its workload, but they will have to work on day one for themselves, which may or may not be the case with business courts.

Does the 15th take all the administrative appeals away from the third? Is that how the statute works?

I don’t recall off the top of my head. That’s a good question.

I asked this because the administrative appeals were such a big part of the 3rd Court’s workload. Something to know going in for practitioners is you need to know if there’s any overlap between the third and the 15th. I want to say that the 15th has all the administrative appellate jurisdiction. There were some political issues that were brought to bear on that. That’s something I keep talking about uncertainty.

There are things that we do know. There are answers to questions that are knowable. There’s so much to it. Because we haven’t seen it all in practice yet, you could spend all your days trying to figure all this stuff out, but until you get that first case, you have to figure out where the rubber meets the road, and you’re not dealing with hypotheticals anymore. That’s where it’s going to become interesting when we start seeing real cases that get affected by both courts.

There’s going to be a lot of back and forth between the various courts about which goes where and going to the Supreme Court on all that.

I flagged this earlier, but it’s been an interesting evolution over the past decade. You all might remember it was last term or the one before. There was that SB11. That was going to take fourteen Courts of Appeals, put them in a bag, check them, and spit them out into 5 or 7. There are some political intentions behind what’s going on there, but this overall question about, how are we settling our cases? That’s a good question. We’re asking questions like, are partisan judges a good thing? Should we have an elected system? Who’s hearing particular types of cases? That’s, on the whole, a good thing and will lead to a better judiciary in the long run. We’re going to have some growing pains in the next couple of years making that leap.

Business Court: We’re going to have some growing pains in the next couple of years as we make that leap.

When you tell people outside of Texas that we have fourteen intermediate courts of appeals and two of them have the same jurisdiction but are different courts, you usually get a look from people or even in Texas when you say, “We’ve got them in all the major cities like Eastland, Amarillo, and Beaumont.” They start looking at you about that.

You start in Austin and wind up in Beaumont because of docket equalization.

That is another thing that is interesting.

This is being reminded about docket equalization and the overlapping jurisdiction. Think about it in certain counties, not in Houston. You have overlapping jurisdictions, mostly in East Texas. I can only imagine what our friends in states that have one intermediate court of appeals must think about our system. It’s like, “How in the world do you have many courts?”

What that would suggest is, with all those courts, you can make a good living being an appellate lawyer. The flip side of that is that there are few in other states. We have a much more developed appellate bar and recognition of appellate practices specialization than a lot of other states do. It’s all this is to say, “Texas is unique. It’s a big state with a lot of litigation.” Our legislature, when it meets every other year, keeps making it interesting

That’s one word for it.

Interesting is a good word for it.

We have proposed rules for the 15th Court of Appeals that have been put out. This is an even better example of the Supreme Court Advisory Committee and the court trying to work within the structure of existing rules. The business court rules, even though they’re within the rules of civil procedure and not standalone rules, they’re written from whole cloth for the most part. The changes that I see in the red lines are designed to leave the system in place as we know it but to factor in those instances in which we’ve got the kinds of cases that go up to the 15th Court and how those situations get dealt with. I’ll throw this out to either one of you guys. Are there rules provisions in the 15th Court rules that strike you and something that we ought to highlight for readers?

The ones that are going to be interesting are who decides when a case goes to the 15th, how it gets there, who decides whether to keep it, and how those disputes are going to get settled. The answer is it’s going to get settled quickly, but we are not going to know for the first little bit until somebody takes some test cases and the Supreme Court gives us an answer. A lot of the cases that are going to go will be fairly obvious to everyone, but some of them are not. Until we get one or two of those under our collective belts an answer from the Supreme Court, there are going to be some questions there.

The biggest outstanding one is who decides the question. Is it your case or not? Let’s say a trial court says, “Yes, it does fall within that, or no, it doesn’t. Which Court of Appeals do you go up to?” The other thing is, in the same way, I’ve heard some interesting. It is about the euphemism. There are some interesting theories about the business court.

I’ve heard some interesting ones about the 15th Court of Appeals. One person who I respect said to me, “The way the statute and the words are worded, anyone can get in the 15th Court of Appeals by simply electing to do so on their docketing statement.” I went, “I don’t know that’s true, but that’s right.” We build things for the consumption of the normal person. You never know who’s going to stick a pencil in it, pour honey on it, or say, “I want to elect to be in the 15th Court of Appeals.” Those one-off weird procedural issues will be fun to see it crop up like that.

I somehow think that if someone tried to do that, that loop would get closed quickly.

There are going to be some territorial issues that come up because I can understand that if you’re an intermediate court of appeals, there are some cases you’re happy to hand off, and there may be others you might not want to. That’s going to be interesting for litigants when you think about, “If I have my lawsuit here. I know where it’s going to go. There’s some predictability. Here are the judges, and now, maybe not. These are different judges you may or may not know. They’re not judges that you elected at this point.

This one will flag. It’s more than we have time for. It’s going to be subject to its own constitutional challenges. David Coles is not the one leading the charge in the challenge, but he has flagged some constitutional issues for having courts of statewide jurisdiction when the Texas constitution seems to speak to distinct, discreet geographic regions. It’ll be interesting to see how those challenges shake out as well. There are some good materials out there on that.

The operations date is the same as the business court, September 1, 2024. As you’ve noted, we’ve got the pipelines filling up for that court. They’re going to have work on day one. They’ll have jurisdiction over appeals that are perfected on or after September 1, 2024. They’re going to be headquartered here in Austin, but we don’t know where. We don’t know who the judges are, but we’re going to get our first three appointments within the next few months. We’ll start getting a better feel for what the landscape of that court’s going to look like.

Do we know what the parenthetical citations are going to look like after the text up and the em dash?

It’s got to be 15th. It can’t be Austin. That begs the question, do we do it like we do the 1st and the 14th and say, “Text up Austin, 3rd District, and the year. Text up Austin, 15th District, and the year.” We’re nerding out now.

There are 3L at UT working on the green book, and they are going, “I need answers.”

Why do we leave this to 3L at UT? Let’s start doing it the way we think it ought to be done. Let them adjust to us.

Let’s decide right here. We’re making a decision.

One other closing thought about the rules is you mentioned, Tyler, that if any public comments, that comment period is closed back on May 1st, 2024. What happens in the situation is the Supreme Court will review whatever input they’ve received, whether it be through public comment or other further discussions on the Supreme Court Advisory Committee. We haven’t seen the final version yet, but I suspect we’ll see those well in advance of September 1st, 2024, to know what we’re going to be dealing with.

I would suggest that anybody who thinks they’re going to have a case in business court or the 15th Court, as soon as those final rules come out, take a look at them and start thinking about the things that Tyler has highlighted here the strategic issues. You’re already behind the curve if you’re not doing that from the sound of things. As we’ve discussed, there are many things that are going to only become apparent once we’re dealing with real cases and disputes. It’s a fascinating time to be a lawyer in Texas.

Tyler, our tradition, as we close out, is to ask our guests for a tip or a war story. Anything you’ve got you want to share in our closing minutes?

That’s an excellent question, and I love it because it leaves so much room for any direction. Mine, I’m reminded, is that I thought back on cases I’ve argued and appeals I’ve handled. It was my first Fifth Circuit argument several years ago, and the importance of being flexible and interactive. We sometimes take for granted how valuable it is. We are getting peppered. We’re getting real-time feedback from the people who are making the decisions in our cases. I can’t imagine trial attorneys the luxury they would think that was if jurors had a little turn a dial. Yes, I like the argument. No, I don’t.

It was a pure question of statutory construction. The issue was if we were right, we didn’t know anything. If the other side was right, it was three times what we said we didn’t know. I would sometimes joke. If you’ve ever seen Zoolander where he goes, “This needs to be three times this big.” He’s the male model. I would make that joke.

We go in thinking, “We’ve got a good textual argument. We’ve got some good case law here. We’ve got what we perceive to be a good business-friendly court, and we were a business.” We feel solid on this. I went in, and you talk about a barrage of getting peppered about how maybe we weren’t reading the statute right or we had perverted the statute on its original meaning.

The other side had requested to certify the question to the Supreme Court of Texas. Our party line from the outset was like, “No, there’s good state and federal guidance. You don’t need to.” At the end of the argument, having that feedback, I stopped and said, “I’m starting to think certification may be appropriate in this instance.” One of the panelists was adamant that we were wrong, and I understood the concerns that he pinned a dissent to the certification. It was a fascinating one. We certify over and wind up winning 9-0. The Supreme Court of Texas says, “Yes, you’ve got the better of the two interpretations.”

I was reminded of Mike Tyson. Everyone’s got a plan until they get punched in the face. Take that not as an insult but as an opportunity to know what the court is concerned about and address it. Being prepared and flexible there, there’s no substitute for that. I love teaching 1L appellate procedure. I tell them, “Get up there and have fun. Address the court’s questions and have a good time.” The fun epilogue to that was I was in front of the same judge who wrote this some years later. I, in that case, had asked for certification. With a grin and a nod, he said, “I understand you’d like certification here, Mr. Talbert.” I did not get it, but we shared a moment there reminiscing fondly. That’s my war story.

Tyler, we appreciate this. This is helpful. If nothing else, to point out all the things that we don’t know at this point, which is going to be a good thing for everyone to keep in mind as it comes online here in a couple of months.

We’ve done with Jerry Bullard. We may have to do a one-year revisit, one-year post-business courts, 15th Courts, to see how it’s shaken out so far. Tyler, if you’re game for that, that’s something we ought to take a look at.

I love it. Let’s put it on the books.

Thanks for being with us, Tyler. We appreciate it.

Thank you all. It’s been a great time.

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