Texas’ top three political leaders want to create a specialty court that would handle disputes between business: Gov. Greg Abbott, Lt. Gov. Dan Patrick and House Speaker Dade Phelan each identified a business court as a top legislative priority for this session. Critics say such a court could lead to unequal justice.
John Moritz, an Austin-based reporter for the USA Today Network who wrote about the proposal, told Texas Standard that the proposed Texas court is modeled on Delaware’s chancery court. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: If I’m not mistaken, Delaware has certain courts to deal with corporate affairs. Are Texas leaders thinking about something similar in Texas?
John Moritz: It’s pretty much modeled along those lines. The proposal that we have seen so far – all three of the legislative leaders, including the governor, have endorsed this concept – but so far, there’s only one bill, and that’s in the House. And that bill would seem to model the Delaware court system pretty closely.
Chancery courts in Delaware have been powerful magnets for a lot of businesses to come where they believe that they can get, if not preferential treatment, a more perhaps sympathetic ear from judges there in that court system. What do you make of this idea? Is this to attract more businesses to Texas? And would it indeed set up essentially a two-tier kind of legal system?
Yes, and yes. As most of the of the [listeners] probably already know, Texas is a very, very pro-business state. We pride ourselves on low unemployment, low taxes, low regulations. And this idea would basically say, instead of waiting on line, with assault cases, family violence, etc., a business would have its own court. The court would be highly specialized. The judges would have to meet certain standards and qualifications, and they’d have to basically understand it. Now, proponents say it doesn’t tilt the scales one way or the other because it’s business on business. One business is going to win and one business is going to lose. But it does offer big corporations and others that consistency that you wouldn’t get one verdict, say, in El Paso and another in Corpus Christi and a third in Dallas-Fort Worth.
What are opponents saying? You mentioned that, for instance, there’d be a de facto fast track for businesses to have their legal disputes settled. What about when it’s individuals versus business? Would that be handled through the chancery or through like civil courts, that sort of thing?
I think people versus business would go the traditional route. What the critics are saying is that we would be, in effect, greasing the skids for business cases. Say you and I were in a legal dispute. We might wait weeks or months or maybe even longer to hear our case while others are on the fast track gliding past us.
So what kinds of cases would likely be heard by this new court?
Well, it would basically be retailer A suing supplier B, that sort of thing, over whether the contracts were breached or whether everybody was treated fairly.
The best example I could find recently that people might relate to in Delaware was the Twitter case involving Elon Musk. He wanted to buy Twitter for a fair amount of money. Then he backed out. Twitter said, ‘No, sir, we’re going to take you to court.’ And he ended up in chancery court. As a result, Elon Musk decided to go ahead and drop his opposition and complete the sale.
Are critics’ objections likely to hold sway here? I’m thinking about the support of the state’s top three leaders. Typically, that means that gets on a fast track and moves through the Legislature fairly quickly without a whole lot of opposition. What are you hearing, and what are you sensing?
Well, given the three individuals who are most out in front on it and given the opponents in a short legislative session, I’d rather be on the side of the three state leaders who want it, than being on the side of those trying to kill a bill that would seem to have this much importance.
Who seems to be behind this? I understand that there’s something of a lobbying push here.
Yeah, Texans for Lawsuit Reform is a pretty influential lobby group here in Texas, they’re probably the most out-front. And there are other pro-business, pro tort reform groups that are also playing a role, perhaps not quite as high a profile. But clearly, this is something the business-friendly government leaders and the business lobby are behind.