TEXAS: An Introduction to Litigation: General Commercial
Dallas-Fort Worth and its Legal Environment in 2022
DALLAS IS BOOMING
“It’s as big as Dallas!” is an old Texas saying. And in 2022, the Dallas-Fort Worth (D/FW) metro area has grown bigger than ever, along with the complexity and maturity of the legal environment that surrounds it, and the talent of the legal counsel who shapes it.
The Census Bureau recently confirmed what has been apparent for months to anyone driving area freeways – D/FW is the fastest-growing metropolitan area in the United States. The region added almost 100,000 new residents over the past year and is closing rapidly on a total population of eight million. D/FW now ranks as the fourth-largest metropolitan area in America, and it is only a matter of a few years until D/FW passes Chicago in population size. D/FW International now ranks as the second busiest airport in the world (and that is not counting traffic through Love Field near downtown Dallas).
IT’S A GOOD PLACE FOR BUSINESS
People move here because businesses choose to locate here. Twenty-two companies listed in the Fortune 500 now have their headquarters in this area. Businesses such as those bring with them rich intellectual capital and diverse work forces from a wide range of backgrounds. At the same time, our strong technology sector (the integrated circuit was invented here at Texas Instruments in 1958, and Lockheed now builds the F-35 'wonder jet' here) fuels a steady stream of innovative startups. Dallas has even been rated as the second-best city in the country for remote work. The future looks very bright for commerce involving all sizes of business enterprises and market structures.
THE ACCELERATION OF LITIGATION IN TEXAS
The surging D/FW population and economy, coupled with the long-awaited decline in COVID-19 cases, has had at least three major effects on the area’s business-litigation practice.
First, after a two-year freeze, jury trials have restarted. Eager to clear out backlogs that built up over many months, trial judges are now aggressively managing their trial dockets to move cases to verdict. As a practical matter, this trend means that a court may now require five or more cases to be at the ready for a particular trial setting, as opposed to only the oldest one or two. Or, a court may require that the parties stay ready for trial throughout a “rolling” docket of a week or longer, instead of only a single day’s docket call. These practices have two, somewhat inconsistent, effects on pretrial. Some cases may seem to linger indefinitely because of the continuing jury-trial backlog, while other cases may be suddenly called to trial on short notice. That uncertain situation places considerable stress on trial lawyers and firms, who must be “ready for anything.”
Second, the widespread expansion of virtual business practices, encouraged and in many cases now standardized as a result of the pandemic, is transforming the personal jurisdiction law that defines who can be sued in a Texas forum. The Dallas Court of Appeals is leading the way in that evolution, putting aside old jurisdictional tests about online activity that turned on issues made irrelevant by advancing technology. In Shopstyle, Inc. & Popsugar, Inc. v. rewardStyle, Inc., for example, that Court recognized that the long-recognized “Zippo test” for personal jurisdiction, based on a website’s interactivity, had little to offer for modern e-commerce sites that facilitate transactions between third parties. 2020 WL 4187937 (Tex. App.—Dallas July 21, 2020, no pet.). Another significant case found an online forum-selection clause unenforceable when the defendant’s website made the clause too difficult to locate for review. In re: Freightquote.com, 2019 WL 995791 (Tex. App.—Dallas March 1, 2019, orig. proceeding). These changing standards have produced a vibrant online community that observes Texas business law, and we have led the way in that innovative effort with our award-winning blogs, 600camp.com and 600commerce.com, which track the commercial cases in the two key courts of appeal for our area.
And third, especially after recent events abroad, the oil-and-gas industry is booming. The many deals that came together during the energy-sector bankruptcies of 2020-21 will likely come under fresh scrutiny if those transactions now turn out to be highly profitable. In particular, businesses that worked together to develop a particular opportunity may now have to confront the question whether they formed a partnership under Texas law and with that partnership, created duties of loyalty. Our state’s partnership law generally follows the national model statute, and allows the creation of a business partnership by conduct without regard to the parties’ subjective intent—but with some critical variations, that will likely be tested in this kind of litigation. See Energy Transfer Partners, L.P. v. Enterprise Prods. Partners, L.P., 593 S.W.3d 732, 737 (Tex. 2020) (listing partnership-formation factors stated in Tex. Bus. Orgs. Code § 152.052(a)).
THE BARRISTER/SOLICITOR DISTINCTION WILL GROW MORE PRONOUNCED:
These trends are all developing in the context of a rapidly evolving bar. The barrister/solicitor distinction, never formalized in the United States but recognized as a practical matter as a distinction between “office lawyers” and “courthouse lawyers,” has grown more pronounced in Texas trial practice. That trend has long been the case in Texas and particularly in D/FW, as its surging population and economy have attracted law firms from around the country and world. Most large national firms have offices here now, many of which had no Texas presence as recently as ten years ago. The result is more options for sophisticated in-house counsel who are searching for the right firm for the particular problem at hand.
We predict that the barrister/solicitor divide will become more pronounced as specialization and efficiency continue to become the touchstones of D/FW trial practice. We are excited about the coming opportunities to litigate critical and interesting issues in state and federal court, involving new and old industries, and to meet and work with the many bright and talented people moving to our area.