Published on:

First challenge to new “business courts” legislation filed in Supreme Court

In re Dallas County, Texas and Marian Brown, in her official capacity as Dallas County Sheriff, No. 24-0426, Texas Supreme Court, filed May 23, 2024.

In 2023 the Texas legislature passed Senate Bill 1045. The bill creates a new system of “business courts” having jurisdiction of high-stakes business cases. Notably, the judges of these new trial courts are not elected but are appointed by the Governor. The bill also creates a new 15th Court of Appeals to hear appeals of such cases, as well as any case against the State, state agencies and state officials.  This is the first case to challenge the constitutionality of SB 1045. Before the bill, suits against the State were filed in Austin and appeals went to the 3rd Court of Appeals in Austin.

Dallas County and others sued members of the Health and Human Services Commission in Travis County, alleging that HHSC has failed to timely transfer inmates from the Dallas County jail to state hospitals who have been held not competent to stand trial or not guilty by reason of insanity, as required by law. The trial court denied the defendants’ plea to the jurisdiction, and defendants appealed that ruling to the Austin Court of Appeals. The defendants filed a statement in that court indicating that, on September 1, 2024 (when the 15th Court of Appeals becomes effective), the appeal would be automatically transferred to the new 15th Court created by SB 1045, because the suit involves a case against state officials.

The plaintiffs have now filed a special proceeding in the Texas Supreme Court, a Petition for Writ of Injunction, alleging that SB 1045’s effort to create a new 15th Court of Appeals violates the State’s constitution.

SB 1045 provides that the new 15th Court of Appeals has state-wide jurisdiction. Until the creation of the new 15th court, Texas had 14 intermediate courts of appeal, each responsible for appeals from trial courts in their respective districts. Texas Constitution Article 5 Section 6 provides that

The state shall be divided into courts of appeals districts, with each district having a Chief Justice, two or more other Justices, and such other officials as may be provided by law. The Justices shall have the qualifications prescribed for Justices of the Supreme Court. The Court of Appeals may sit in sections as authorized by law. The concurrence of a majority of the judges sitting in a section is necessary to decide a case. Said Court of Appeals shall have appellate jurisdiction co-extensive with the limits of their respective districts, which shall extend to all cases of which the District Courts or County Courts have original or appellate jurisdiction, under such restrictions and regulations as may be prescribed by law. Provided, that the decision of said courts shall be conclusive on all questions of fact brought before them on appeal or error. Said courts shall have such other jurisdiction, original and appellate, as may be prescribed by law.

Until enactment of SB 1045, Texas law contained a similar provision. Section 22.201(a) of the Government Code provided that “The state is divided into 14 courts of appeals districts with a court of appeals in each district.” SB 1045 amended that section to add the 15th court of appeals and modified section 22.201(a) to read “The state is organized into 15 courts of appeals districts with a court of appeals in each district.”

Plaintiffs argue that under the Constitution all intermediate courts of appeals must preside over a district that is a subdivision of the state. So the legislature cannot create a state-wide district for the new 15th court of appeals.

Contact Information