Strictly Business

In a consolidated opinion, the Texas Supreme Court stepped into the fray and resolved disputes between the First, Thirteenth, Fourteenth, and Fifteenth Court of Appeals about the jurisdiction of the newly created Fifteenth Court. The Cliffnotes answer is that litigants do not get to choose whether they appeal to the Fifteenth Court or the appellate court with territorial jurisdiction, even in significant business cases.

The first case, Kelley v. Homminga, was an appeal from a final judgment in Galveston County awarding more than $1 million in damages arising from a construction dispute. Ordinarily, it would be appealed to the First or Fourteenth Court. The second, Devon Energy v. Oliver, was an appeal from a final judgment in DeWitt County awarding over $1 million in damages arising from an oil royalty dispute. Ordinarily, it would be appealed to the Thirteenth Court.

The defendants in both cases filed their notice of appeal indicating an intent to appeal to the Fifteenth Court. The plaintiffs filed motions to transfer venue arguing that the Fifteenth Court lacked jurisdiction over the cases. In response, the defendants argued that the Fifteenth Court has statewide general jurisdiction and, because multiple courts had concurrent jurisdiction, they could elect which court to take their appeal.[1] They also contended that the cases presented issues aligned with the Fifteenth Court of Appeals’s specialization because they involve “thorny business issues.”

A divided panel of the Fifteenth Court denied the motions to transfer but requested the First, Thirteenth, and Fourteenth Courts weigh in on whether they agreed with the Fifteenth Court’s interpretation of its jurisdiction—the First Court agreed while the Thirteenth and Fourteenth Courts disagreed. Because of the thorny jurisdictional issues in play, the Fifteenth then requested the Supreme Court weigh in under Texas Rule of Appellate Procedure 27a(d)(1).

Consolidating both cases, the Supreme Court granted both motions to transfer. In a per curiam opinion, the Supreme Court explained that under Section 22.220 of the Government Code, the courts of appeals have “appellate jurisdiction of all civil cases” within their district, except as provided in subsection (d). Subsection (d) is the newly added section providing the Fifteenth Court with exclusive jurisdiction over civil cases (1) brought by or against the State, (2) those involving challenges to the constitutionality or validity of a statute or rule, and (3) “any other matter provided by law.” But, as the Supreme Court reasoned:

[T]his jurisdictional premise alone does not establish that the Legislature intended to grant every civil appellant the option of litigating in the Fifteenth Court. To the contrary, several textual clues indicate that this is not what the Legislature intended at all.

Primarily, the Supreme Court reasoned, the various statutory provisions regarding transferring cases into or out of the Fifteenth Court provide the answer. When cases outside of the Fifteenth Court’s exclusive jurisdiction are filed in the Fifteenth Court, they are “inappropriately filed.” Thankfully, this does not provide a trap to the unfortunate litigant who does not read this opinion before assuming they have a choice of where to appeal their case. The statutory remedy, according to the Supreme Court, is that the case “must be transferred” to the appropriate territorial Court of Appeals—not dismissed for lack of jurisdiction with its attendant risks of waiving the right to appeal.

Another factor that the Supreme Court found significant is that the Fifteenth Court is limited to three justices, yet under its interpretation of its own jurisdiction, each of the 5,000 civil appeals filed each year would have a choice of filing in the Fifteenth Court or the territorial Court of Appeals governing the district court in which they sit. “Burdened with thousands of civil cases of every stripe, the Fifteenth Court justices would be unable to give special attention to those cases the Legislature has defined as critical to the State’s interests.” This would defeat the manifest objective of the Fifteenth Court and so cannot be the result the legislature intended; “the Legislature did not intend the Fifteenth Court to hear every civil appeal within its statewide jurisdiction.”

What this means for litigants is that if you are in district court, you should appeal to the territorial court of appeals with jurisdiction over that district court unless you fall within the Fifteenth Court’s statutory jurisdiction. Just because the Fifteenth Court has statewide jurisdiction over those cases the Legislature intended does not mean that it has general statewide jurisdiction.

Tim Delabar is an associate in Cokinos Young’s Insurance/Risk Management, Commercial Litigation, and Appeals & Legal Issues Sections, representing construction companies in complex litigation involving a wide variety of issues ranging from insurance coverage to misappropriation of trade secrets to breach of contract and fiduciary duty claims. Tim has extensive experience in both state and federal courts in and outside of Texas and has taken cases to verdict—either as trial or appellate counsel—in Texas, Oklahoma, and Colorado.

Tim earned his law degree from Baylor Law School where he survived the rigorous Practice Court program. He also succeed in both inter- and intra-school moot court competitions. He takes his passion for appellate advocacy to UNT Dallas College of Law where he hosts a an appellate writing workshop and coaches moot court teams.

In his free time, Tim enjoys watching TCU football and baseball and annoying his wife with fun facts about the Roman Empire.

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[1] In this, they relied on a Supreme Court case involving the unusual Gregg County, which lies within the territorial jurisdiction of both the Sixth and Twelfth Courts; litigants in Gregg County can elect to appeal to either the Sixth or Twelfth. That same rationale, it turns out, does not extend to the Fifteenth Court.