The Texas Supreme Court on Friday determined 5-4 that Texas Civil Practice and Remedies Code Section 52.006(b)(2), which applies a $25 million cap on bonds posted to appeal, applies per judgment debtor.
The ruling was issued in the case in which Greystar Development & Construction and two related entities posted a joint $25 million supersedeas bond to appeal an $860 million verdict a jury rendered against them in April 2023. In the underlying case, a crane collapse killed Kiersten Smith. Her parents, Michele Williams and James Kirkwood, sued Greystar Development & Construction, Greystar Development & Construction, LP-Gabriella Tower Contractor Series and Gabriella Tower.
Justice Brett Busby authored the majority opinion, joined by Chief Justice Jimmy Blacklock and Justices Debra Lehrmann, John P. Devine and Kyle D. Hawkins.
“Applying the statute’s plain language and definitions, we hold that the cap applies to a bond posted by a debtor,” Justice Busby wrote. “Read together, the relevant sections provide that ‘the amount of security’— defined as ‘a bond … posted … by a judgment debtor to suspend execution of the judgment during appeal’— ‘must not exceed . . . $25 million’ or ‘50 percent of the judgment debtor’s net worth.’ This debtor-focused language is consistent with the law’s general per-debtor approach to matters involving appellate rights, execution, and suspension of execution. On the other hand, straying from the text to adopt an all-debtor cap would create problematic inconsistencies for courts to resolve without any statutory guidance.”
Both camps reiterated throughout their respective opinions they were accurately following the text of the law and referred to the other’s interpretation of the relevant statutes as “atextual.”
Justice Rebeca Aizpuru Huddle authored an opinion concurring in part and dissenting in part, which was joined by Justices Jane Bland, Evan A. Young and James P. Sullivan.
All nine of the court’s justices agreed on one point: that the trial court abused its discretion when it determined the $25 million bond applied only to one Greystar entity and declared the other two immediately unsecured without allowing them an opportunity to post additional security. The court sent the case back to the trial court to allow “a reasonable time to post sufficient bonds under Section 52.006(b)(2)’s per-debtor cap.”
“We are confident that the court will comply, and the writ will issue only if it does not,” the opinion reads.
In the partial dissent, Justice Huddle wrote that the Texas Supreme Court in 2015 had reached the opposite conclusion in In re Longview Energy Co., a “case involving five jointly and severally liable defendants who secured a joint $25 million bond,” where “the Court described Civil Practice and Remedies Code Section 52.006(b)(2) as ‘an absolute cap.’”
“If the holding comes as a surprise — as it surely does for relators — it is for good reason,” she wrote. “The Court’s holding is at odds with the statutory text, which nowhere manifests a legislative intent to disturb the longstanding rule permitting joint bonds in supersedeas practice. The Court’s holding rewrites the statute, appending words to convert the cap to ‘$25 million per judgment debtor’ when it reads ‘$25 million’— full stop.”
Justice Huddle wrote, “more is at stake here than ivory-tower textualism,” and warned that the majority’s holding will increase appellate costs in cases with multiple defendants, will hamper the Legislature’s intent to make the right of appeal more accessible and will have the greatest impact “in nuclear-verdict cases, which are increasingly common and can cripple judgment debtors regardless of the likelihood of their success on appeal.”
The majority’s holding will also result in situations, in some cases, where the amount of a joint bond would exceed the amount of a judgment, Justice Huddle wrote, offering a hypothetical situation involving five defendants found jointly and severally liable for $100 million.
“The Court’s rule would seemingly require any joint bond to be in the amount of $25 million per defendant for a total security of $125 million — an amount exceeding the judgment,” she wrote. “That does not make supersedeas more easily available or protect the right of appeal. Far from it. Because the Court’s decision rewrites the careful balance the Legislature struck in Section 52.006, the Legislature may wish to reconsider whether the statute as currently written best protects the important competing interests at play.”
The majority opinion held that Greystar’s position is “is in tension not only with the statute’s text but also with the overall scheme of statutes and rules governing supersedeas practice.”
“Their position would also require courts to craft exceptions without textual guidance just to become workable,” Justice Busby wrote.
“The other policy considerations the Greystar Entities ask us to consider include bad pleading incentives for plaintiffs, inadequate protection of the right to appeal without a per-judgment cap, chilling effects on appellate rights, and piecemeal execution on a judgment,” Justice Busby wrote. “None are persuasive.”
The Texas Civil Justice League filed the only amicus brief in the case, in support of Greystar, explaining it has long advocated for supersedeas bond reform, starting in 1989 after the landmark $10.5 billion verdict in Pennzoil v. Texaco.
“In our view, the plain language of the reformed Chapter 52 caps the amount of security at $25 million, period,” TCJL told the court. “For what it’s worth (and as a matter of statutory construction our opinion and $8 will buy you a cup of coffee), no one involved in drafting and eventual enactment of section 52.006 ever thought that the $25 million cap was to be applied on a per judgment debtor basis. As one of two statewide civil justice reform organizations that was directly involved in that process, we can emphatically assert that had we thought that the statute should be applied that way, the Legislature would have said so.”
Counsel for Greystar declined to comment Friday, and counsel for the family did not immediately respond to a request for comment.
Greystar is represented by Anne Johnson and Stephani A. Michel of Norton Rose Fulbright, Wallace B. Jefferson, William J. Boyce and Rachel A. Ekery of Alexander Dubose & Jefferson and Ben Mesches and Ryan Paulsen of Haynes Boone.
The family is represented by Byron K. Henry of Henry Hill, Jeffrey S. Levinger of Levinger PC, Michael P. Lyons, Christopher J. Simmons and P. Wes Black of Lyons & Simmons and Jason A. Itkin, Cory D. Itkin and Parker J. Cragg of Arnold & Itkin.
The case number is 24-0293.