Last week the Texas Supreme Court issued a per curiam opinion in response to objections lodged by two German automakers, Volkswagen and Audi, to the gubernatorial appointment of two substitute justices to participate in decision. The issue arose when Justices Blacklock and Young voluntarily recused themselves from the case following oral arguments last February. Under § 22.005, Government Code, the chief justice may request the governor to commission an active intermediate appellate court justice or district judge to sit in the case in the place of a recused justice. In this instance, the governor appointed Chief Justice Bonnie Sudderth of the Fort Worth Court of Appeals and Corpus Christi Court of Appeals Justice Jaime Tijerina to fill in for Justices Blacklock and Young. The automakers objected asked the chief justice to rescind his request on the basis that allowing the governor to appoint substitute justices raised constitutional due process concerns and would violate judicial ethics. They further requested that if the remaining five justices of the Court could not concur on a decision, the Court should dismiss the petitions for review as improvidently granted. The Court abated its consideration while it considered the automakers’ arguments.

The State of Texas v. Volkswagen Aktiengesellschaft (No. 21-0130) and The State of Texas v. Audi Aktiengesellschaft(No. 21-0133) arose out of VW and Audi’s decision in 2006 to develop “defeat-device” software for its diesel vehicles in order to evade U.S. emissions tests. The EPA discovered the fraud in 2015 and brought a civil enforcement action for violations of the Texas Clean Air Act, resulting in VW Germany’s agreement to pay billions in civil penalties. VW Germany also paid a $2.8 criminal fine. Texas’ share of the booty amounted to $209 million for environmental remediation, $1.45 billion of relief for Texas consumers, and $92 million to compensate Texas dealers. The Texas Attorney General’s office, joined by numerous local governments, launched its own enforcement proceeding for violations of the Texas Clean Air Act. Those cases were consolidated in a multi-district litigation court in Travis County.

The German automakers filed a special appearance contesting the trial court’s jurisdiction. The MDL court denied their special appearance. On interlocutory appeal, the Austin Court of Appeals, in a 2-1 decision, reversed and rendered for the automakers. In an opinion by former Chief Justice Rose and joined by Justice Smith, the court of appeals found that they did not have the requisite minimum contacts with Texas for personal jurisdiction to attach. Applying the “purposeful availment” test, which requires a nonresident defendant to “purposefully direct” activities to the forum state in order to receive some benefit, advantage, or profit by availing itself of the jurisdiction, the majority concluded that their activities were purposefully directed at the United States as a whole, not to Texas.

Justice Triana dissented. She took issue with the majority’s reliance on the plurality opinion J. McIntyre Machinery, Ltd. V. Nicastro, 564 U.S. 873 (2011), which on similar facts reached the same conclusion as the majority, noting that SCOTX has not adopted Nicastro’s reasoning. She would find that VW Germany purposefully availed itself of Texas by virtue of its importer agreement with VW America, in which VW Germany exercises a “significant degree of control over the recall-tampering activities in Texas and elsewhere.” Put another way, the dissent agrees with the state’s characterization of VW Germany’s minimum contacts. “I would not conclude,” Justice Triana states, “that a nonresident may purposefully avoid a particular jurisdiction merely by conducting activities directed at every state in the United States, and by avoiding any special treatment of one or a few states.” Having found purposeful availment, the dissent would likewise find that the exercise of personal jurisdiction over VW Germany would comport with traditional notions of fair play and substantial justice based on the state’s strong regulatory interest and absence of an undue burden on VW Germany.

SCOTX granted the state’s petition for review and heard oral arguments in Feburary, setting the stage for Justices Blacklock and Young to step aside and the governor to appoint Chief Justice Sudderth and Justice Tijerina. Last summer the automakers submitted letters to the Court arguing that the appointment of substitute justices violated the principle that “no one may be the judge in his or her own cause.” They contended that the governor in effect embodied the “state,” conflating him with the attorney general and TCEQ, and therefore any appointment of substitute justices would violate due process, as well as mandate the recusal of the appointed justices.

In a fairly lengthy opinion, the Court rejected the automakers’ objections. The opinion carefully reviews both SCOTUS and SCOTX precedents dealing with the recusal of judges for bias and prejudice. Accordingly, the Court reached the conclusion that “only in the most extreme case would disqualification on the basis of bias and prejudice be constitutionally required” (citing Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 844 (Tex. App.—Houston [1st Dist.] 1987, writ ref’d n.r.e.)). (As you may recall, in Texaco v. Pennzoil Texaco tried to disqualify the trial judge because he had received a substantial campaign contribution from Joe Jamail, Pennzoil’s lead lawyer.) Under SCOTUS case authority, only three situations exist in which the Due Process Clause mandates disqualification: (1) the judge has a direct, personal, substantial pecuniary interest in the case; (2) the judge seeks to preside over a contempt proceeding against a witness who testified in secret before the judge; and (3) when “a person with a personal stake in a particular case had a significant and disproportionate influence in placing the judge on the case by raising funds or directing the judge’s election campaign when the case was pending or imminent.” The Court found that none of these “extreme” situations present themselves in this case.

The Court further took issue with the automakers’ characterization of the governor as the “state,” thus rendering him a part with a substantial interest in the outcome of the case. In fact, the Court reasoned, the governor has very little interest in any case involving state regulatory and enforcement actions. Though he appoints boards and commissions, he does not oversee their regulatory functions or have any direct regulatory power (except in a declared emergency). Moreover, the attorney general, who is independently elected, decides whether to launch an enforcement action, not the governor. And just because the state would receive a big chunk of cash for the general fund if it prevails does not mean that the governor has a financial stake in the outcome. The legislature, not the governor, ultimately decides how to spend the money. Finally, the Court opines that a commissioned justice does not become “the State’s judge. By this, we mean that the mere fact of being appointed by the Governor does not taint a judge with partiality in the State’s favor.” If that were the case, no appointed judge or justice could ever hear a case in which the state is a party (including criminal matters), bringing the wheels of justice to a “grinding halt.”

The Court closes by questioning the automakers’ contention that the governor’s appointments “would necessarily create in reasonable minds a perception that these justices or judges would be unable to carry out their responsibilities with integrity, impartiality, and competence; otherwise every eligible justice or judge would necessarily be disqualified.” In other words, the two substitute justices are subject to exactly the same ethical standards as the recused justices and must make their own determinations of when recusal is appropriate. We find it interesting that SCOTX took the time and effort to opine on an issue it really didn’t have to address in the first place. But we’re certainly glad they did. The governor appoints dozens of judges and justices every year, and dozens more are hearing cases every day in the interim prior to their first election. The notion that the governor has anything in particular to be gained, especially in a pecuniary sense, from appointing an otherwise qualified person to fill a vacancy (which is essentially what § 22.005 permits in the circumstances of this case) seems preposterous to us. Of course there is often a political relationship or rationale that contributes to the governor’s decision to appoint that person, but so what? At its core, the Court’s opinion states just that, albeit in the context of a constitutional and ethical analysis. In any event, lawyers seeking to recuse a judge would be well-advised to study this opinion. It might save a lot of trouble and expense.

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