Long before Elon Musk tried to buy a U.S. Senate seat or a Texas State Park, big business shelled out money to create its own court system in Texas.
Texas lawmakers approved a new business court to take complex, high-dollar legal disputes out of the hands of locally elected judges — often Democrats in the major urban centers — during the 2023 legislative session.
To handle challenges to its rulings, they also created a new statewide appellate court, which they gave immediate appellate jurisdiction over cases involving state officials, as well.
After last week’s blue wave, however, legal experts and business leaders are scrambling to size up a new landscape that put both courts under Democrats’ control.
Power to appoint business court judges will soon be in the hands of incoming Democratic Governor Gina Hinojosa, who campaigned vowing to reclaim power from big business in Texas.
Meanwhile, inaugural justices to the new 15th Court of Appeals, who were also appointed by Abbott, appeared on the ballot for the first time this November.
All three lost to Democratic challengers in a statewide sweep — upending Texas GOP leaders’ efforts to reshape the state’s judiciary.
“They would have never done it if they had had a crystal ball and seen this election,” said Dallas County Commissioner Andy Sommerman, a Democratic attorney who challenged the new court’s authority.
‘A smashing success’
San Antonio is home to one of the five business court divisions, where judges Marialyn Barnard and Stacy Sharp just recently finished setting up shop in a building off North St. Mary’s Street several months ago.
Barnard said Monday that they’ve been incredibly busy, working on cases involving Valero, NuStar Energy, the Kampmann family’s automobile groups and others handed off by divisions in other parts of the state.
“Our cases have just skyrocketed,” Barnard said. “With all the companies that are coming to Texas and reincorporating … Houston and Dallas have been exploding, and so Austin, San Antonio, and Fort Worth, we have been taking some of the overflow to help out.”
Unlike other Texas judges, Barnard and Sharp were appointed by the governor, who just reappointed each of them to another two-year term in September.
But after last week’s election, their futures — along with other gubernatorial appointments — are unclear headed into Texas’ 90th Legislative Session.
They need confirmation from two-thirds of the Texas Senate, which would lock them into their roles for two more years before the incoming governor can appoint her own judges.
Republicans don’t have the votes to do that on their own, but could perhaps take advantage of a narrow window in which the new governor hasn’t yet been sworn in, but Democratic state Sens. Sarah Eckhardt (D-Austin) and Nathan Johnson (D-Dallas) have already moved on to their new roles as Comptroller and Attorney General.
If the judges aren’t confirmed by the Texas Senate, they could remain in their roles until the legislative session ends in May.
At that point, Hinojosa could make her own nominations — or Democrats could sunset the courts, returning their cases to the district court judges who previously handled them.
“A lot of folks on the Democratic side opposed it, so I’m not sure if there’s going to be a motion afoot to try and kill them,” Sommerman said.
Hinojosa voted against the court’s creation while serving the Texas House, but hasn’t said much about her plans for it since she was elected governor, according to Texans for Lawsuit Reform CEO Ryan Patrick.
Texans for Lawsuit Reform was the driving force behind the new business court over many legislative sessions, saying that Texas governors from both parties have historically been pro-business — and would choose more qualified judges than the district court judges who must get elected to their seats.
Now the political tenor has changed with the election of Hinojosa, who made holding big business accountable a major feature of her campaign.
“My concern would be that the court lurches to the left and becomes very ideological … looking more like the Delaware Chancery Court that we were trying to get away from — and is the reason companies are coming to Texas,” Patrick said.
Can’t shake the Musk
Looming large over the court’s future is Musk, who put big money behind losing GOP candidates this election cycle.
Musk famously went up against the Delaware court over his Tesla compensation several years ago few ago — and then became one of the biggest donors to Texans for Lawsuit Reform’s efforts as he moved more of his business interests to Texas.
“He was a strong advocate for this system. It was clearly an attempt to try and put the thumb on the scale of justice,” Sommerman said. “I think that’s the reason why he contributed hundreds of millions of dollars to this campaign.”
Hinojosa launched her long-shot campaign against Abbott because she said he was too cozy with major donors — in particular Musk, who Abbott tried to direct big rural broadband money to before state lawmakers intervened, and who was reportedly on the verge of purchasing Boca Chica State Park for SpaceX operations shortly after the election.
Now Democrats are in control, and most believe Hinojosa will reshape a court she once opposed in her own image.
“More likely than not, because of inertia … the governor is going to be appointing a lot of folks to business courts,” Sommerman said.
