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TEXAS: An Introduction

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Among other trends and developments in 2021, Texas is becoming a venue of choice for states and industry groups challenging the Biden Administration’s new policies related to energy, the environment and immigration. In March, for example, a coalition of twenty-one Republican-leaning states sued in federal court in Galveston challenging President Biden’s revocation of the necessary cross-border permit for the Keystone XL Pipeline, which would have transported millions of barrels of Canadian crude oil into the United States for refining.

The trend began just two days after President Biden took office in January, when the State of Texas sued in federal court in Victoria to enjoin the new Administration’s declared “100-day pause” on the deportation of aliens already subject to a final deportation order (a federal judge issued a temporary restraining order and later, a preliminary injunction against that policy). In April, states filed three more legal challenges in federal courts in Texas to the Administration’s immigration policies: one in Victoria over the alleged refusal to take custody of criminal aliens as required by federal law; one in Amarillo over the suspension of regulations that required certain aliens to remain in Mexico pending adjudication of their immigration claims; and one in Fort Worth over policies that allegedly have spread COVID-19 among detained aliens.

These lawsuits continue a trend from last December, when ten states sued Google in federal court in Sherman, alleging that the online search provider and advertising giant is violating federal and state antitrust laws and deceptive trade practice laws using an array of exclusionary tactics and an unlawful agreement with its ostensible competitor Facebook.

The Sherman court has long been a popular venue for prosecuting patent infringement claims, with a reputation as a “rocket docket” with efficient patent-related rules, relative short times to trial and experienced judges who could manage procedurally and technically complex cases. A 2017 Supreme Court decision that changed the application of venue rules for patent cases has resulted in a substantial decrease in cases filed in the Eastern District of Texas. But other federal courts in Texas have taken up the slack: the Western District and particularly Judge Alan Albright in Waco have drawn many new filings, as has the Southern District and particularly Houston, where some two dozen Fortune 500 companies are headquartered. All told, more than one-third of the approximately 4,000 patent cases filed around the country in 2020 were filed in Texas.

Houston is an increasingly popular venue for bankruptcy filings as well. For business-related bankruptcies, annual bankruptcy filings in federal court in Houston have surpassed even those in its counterpart in New York City. The new popularity of the Southern District of Texas for national-scale bankruptcy filings is attributable to the implementation of reforms in the court’s management of large, complex corporate restructurings. Those reforms have included the creation of a special two-judge panel (Judges Marvin Isgur and David Jones) to whom all complex Chapter 11 restructuring cases are assigned. The assignment of all cases designated as complex to those judges has increased access to the court for hearings and led to faster and more predictable procedures and rulings. As a result, more large business bankruptcies have been filed recently in Houston than any other bankruptcy court in the country. Recent filings in Houston have included those by retailers JC Penney, Men’s Wearhouse and Neiman Marcus, and by energy giants Noble Corporation and Chesapeake Energy. This trend is expected to continue.

Among new legislation enacted by the Texas Legislature in 2021 is a measure that amends liability for attorney’s fees in certain civil cases. Previous law authorized recoveries of fees against individuals and corporations. Effective in September, the new law will authorize recoveries against limited liability corporations, limited partnerships and other business entities. Religious organizations, charitable organizations and charitable trusts are exempted. The Legislature also created new trial courts serving Austin, Dallas, Fort Worth, Houston, Waco, and environs.