The issue before the Fifth Court of Appeals in Dallas in Steward Health Care System v. Frank Saidara – a trade secrets and fraud dispute involving a virtual data room – was simple: Whether a plaintiff must meet its initial burden on a special appearance by pleading, in its petition, sufficient allegations to invoke jurisdiction under the Texas long-arm statute.
But a concurring decision by Justice David Schenck accusing fellow justices of intentionally delaying the public reporting of a decision by a three-judge panel in order to change the composition of the panel and possibly impact the decision has become the talk of the Texas appellate bar for the past three days.
In an 80-page concurring opinion, Justice Schenck wrote that he is in “the inevitable position of being legally and ethically compelled to disclose to the parties my objections to irregularities in the process by which this case was decided.”
According to his opinion, justices who were not on the three-judge panel repeatedly delayed the release of the original opinion of the three-judge panel for several weeks knowing that Justice Bill Whitehill, who was in the majority, had been defeated in the past election and would no longer be a justice on the Dallas appeals court. The three-judge panel initially included Justices Schenck, Leslie Osborne and Whitehill.
If no opinion was officially released prior to Justice Whitehill’s departure, a new justice would be appointed by the chief justice to fill the slot on the three-judge panel. The name of that fourth justice is unknown.
“The timing of this request, and the unprecedented nature by which it has been pursued (combined with the earlier events that delayed release of the panel decision), create an unavoidable appearance problem that, whether intended or not, undermines confidence in the apparent impartiality of the tribunal,” Justice Schenck wrote.
“Most importantly, one could question whether there was an orchestrated effort to forestall release of the panel opinion to the parties with the expectation that doing so would allow substitution of a new member who might support a desired result,” he wrote.
Justice Schenck declined to speak with The Texas Lawbook about the dispute.
In a separate concurring opinion, Fifth Court Chief Justice Robert Burns said Justice Schenck is simply mistaken in his views of what happened.
“This case has been handled in accordance with our rules and practices,” Chief Justice Burns wrote in a 17-page response. “There was nothing unconstitutional about the process, and certainly nothing nefarious or underhanded. Giving Justice Schenck the benefit of the doubt, he simply misunderstands the rules.”
Appellate law experts said they are stunned by Justice Schenck’s opinion and the chief justice’s decision to publicly respond.
“I’ve never seen anything quite like this,” said Chad Ruback, an appellate law specialist in Dallas. “It is clear that Justice Schenck and Chief Justice Burns put in a lot of thought and effort here, and both tried to do what they believe is right.”
Other legal experts, who declined to comment on the record, said Justice Schenck’s opinion shows how divisive it has become on a court once dominated by Republican judges and now almost completely comprised of Democratic jurists.
Justice Schenck is a Republican who is up for reelection next year. He is also frequently mentioned as a possible appointee to the Supreme Court of Texas. Chief Justice Burns was part of the Democratic sweep of the appellate courts in 2018.
The 13-member Fifth Court of Appeals agreed to decide the case en banc. Justice Lana Myers, also a Republican, wrote the majority opinion upholding the trial court’s decision to grant special appearance to the defendant.
Justice Myers’ decision, however, did not mention any of the allegations made by Justice Schenck.
While Justice Schenck’s opinion was issued Friday, none of the normal appellate blogs or appellate observers on Twitter have discussed the controversy. Four prominent appellate lawyers contacted by The Texas Lawbook declined to discuss the controversy.
The first 24 pages of Justice Schenck’s decision addresses the reasons he concurs with Justice Myers’ opinion.
In the final 56 pages, Justice Schenck confronts what he considers to be impropriety or rule-breaking by his colleagues. His opinion also provides appellate lawyers a unique behind-the-scenes tour of how decisions get made at the Dallas appeals court.
“A reasonable, objective observer having full knowledge of those events could conclude that justices of the court first sought to delay and, thereafter, obstructed the release of the opinion to the parties,” Justice Schenck wrote. “That obstruction came from a justice outside the panel in the form of electing to record a vote requesting a two-week study, which was cast late in the day of Dec. 29, and was only confirmed, despite my objection to the delay and appearance concerns, on the afternoon of Dec. 31 — far too late to permit recourse to the en banc conference to rectify.”
Justice Schenck said that he believes this effort was “contrary to the rules of appellate procedure and this court’s internal operating procedures.” He said the actions of the non-panel justices were “undertaken with knowledge of the age of the case, and that doing so would obstruct the clerk’s release of the opinion and create, at a minimum, legal issues and the appearance of attempting to manipulate the panel result by substituting a new member.”
“Thus, it was known that delaying release of the panel’s decision to the parties could serve only to create circumstances in which substitution of panel membership — and hence concomitant potential change in the result between the litigants — appeared to be intended by any justice embracing a contrary understanding of the rule regarding efficacy of a recorded decision,” he wrote.
No member of the Dallas appeals court requested en banc reconsideration prior to the expiration of the second panel member’s term of office, he said.
“Instead, an attempt was made to substitute a justice on the panel who would later cast a contrary vote,” he wrote.
“Out of an abundance of caution, I will say only that a majority of the court refused to permit a record of their vote with respect to the question of whether the parties or the public should be permitted to see the panel decision,” Justice Schenck wrote.
Never before has a three-judge panel’s decision been “withheld from the parties over the will of the panel majority and no duly recorded vote of a justice who fully participated in a decision has been eviscerated in the manner involved here,” he wrote.
Justice Schenck said he considers the actions of the court’s majority to be a constitutional violation. He said other justices on the court urged him to withdraw his discussion of the inner workings of the Dallas appeals court.
“I am constitutionally and ethically obligated to take appropriate action to avoid the appearance of acquiescence,” he wrote. “While that vague proscription might be satisfied — depending on the posture of the case, my role in it, and the history of other like efforts — simply by raising an objection internally, I do not believe that my raising further internal objections would be sufficient here for a variety of reasons, some of which I have conveyed above.”
“To be sure, the question of whether the outcome in this case affects our legal and ethical duties to address the irregularities that produced it is an interesting one,” Justice Schenck continued. “However, tempting as it is to, once again, avoid the unpleasantness and controversy that accompanies disclosure in this or other cases implicated by our recurring ‘administrative’ challenges, my research shows that harm to the litigants is irrelevant to the analysis or must be presumed, because, by its nature the error is structural.”
In his response, Chief Justice Burns said that the Fifth Court does not discuss internal discussions, deliberations or tentative votes.
“However, because Justice David Schenck has chosen to insert his disagreement with the court’s internal administrative procedures into this judicial opinion regarding a dispute between the parties, I feel compelled to respond,” the chief justice wrote. “In my view, because Justice Schenck suggests misconduct and bias on the part of the other twelve justices on this Court, the proper course of action for him to take would be to file a complaint with the judicial conduct commission.”
Chief Justice Burns said that Justice Schenck’s belief that a case is “decided” once a majority of a three-judge panel have agreed on the judgment is false. He said it is “common practice for justices to request a “two-week study” of the proposed panel decision.
“Here, after the panel refused to approve the original majority opinion, another panel member was assigned to author the majority,” Chief Justice Burns wrote. “That new proposed majority, as well as the original author’s dissent, was circulated to the full court for review and comment per a panel member’s request.
“Before the opinion issued and the review and comment period ended, two things happened. A panel member’s term of office expired, and a non-panel member requested a two-week study of the proposed majority opinion,” he wrote. “Consequently, the proposed opinions did not issue. As is the case here, the process of considering a case may result in various proposed opinions and preliminary votes, but the case is not ‘decided’ within the meaning of the rules of appellate procedure until the court issues its judgment and accompanying opinion explaining how that judgment was reached. That process may include requests for study and for en banc consideration after an opinion has been submitted to a panel and circulated to the full court.
“I disagree with Justice Schenck’s view that, once a panel has voted on a proposed opinion and judgment, a former justice’s vote is somehow final and can operate to ‘lock in’ the disposition of the case, rendering the case ‘decided’ prior to the court’s pronouncement of its judgment.”
Chief Justice Burns acknowledged that some cases take longer than they should.
“If the delay was the result of intentional, nefarious conduct, rather than the process of considering and disagreeing about issues in the case, it might be cause for complaint,” the chief justice opined. “Contrary to Justice Schenck’s assertions and inferences otherwise, that is not the situation presented in this case. This case proceeded like many others over the years. Once the panel had settled onto the proposed majority and dissenting opinions, those opinions were circulated to the full court for review and comment.”
Next stop: The Supreme Court of Texas.