Justice Kyle Hawkins
In a setback for the business and health care communities’ longstanding efforts to place an effective cap on supersedeas bonds, the Texas Supreme Court has denied defendants’ motion for rehearing in In re Greystar Development & Construction, L.P.; Gabriella Tower, LLC; and Greystar Development & Construction, L.P.—Gabriella Tower Contractor Series (No. 24-0293; September 18, 2026).
In a 5-4 decision, SCOTX held that the $25 million cap on the amount of a supersedeas bond applies on a per judgment debtor basis. TCJL filed an amicus curiae brief in the case arguing that the statute, § 52.006, CPRC, establishes an aggregate, hard cap of $25 million, as we and other advocates for supersedeas reform thought we had achieved in 2003 after hard-fought negotiations with legislators.
As you may recall from our prior reports on the case, In re Greystar Development & Construction, LP; Gabriella Tower, LLC; and Greystar Development & Construction, LP—Gabriella Tower Contractor Series (No. 24-0293) involved dispute between judgment debtors and judgment creditors over whether the joint bond in the amount of $25 million posted by the debtors suspended enforcement of the judgment as to all judgment debtors or whether each debtor had to post security separately. The trial court ruled that each debtor had to post a separate bond. The judgment debtors filed a Rule 24.4 motion requesting the court of appeals to reverse the trial court and confirm the sufficiency of the $25 million joint bond as to all debtors. The court of appeals, however, affirmed the trial court. SCOTX granted Greystar’s petition for writ of mandamus and affirmed the court of appeals’ reading of the statute.
The revision to § 52.006(b) capping the amount of the bond constituted a fundamental part of HB 4, the 2003 tort reform legislation. Our brief argued that not only does the plain language of the statute impose a total cap of $25 million, regardless of how many judgment debtors there may be, but that is the only interpretation of the statute that makes any sense. The Court, however, disagreed.
Justice Hawkins, joined by Justices Young and Sullivan, released a statement on the court’s denial of rehearing. Observing that what should have been a straightforward statutory interpretation case split the Court down the middle, Justice Hawkins suggested that, in addition to clarifying the statute, perhaps the Court should consider the federal cost-shifting approach. Under that approach, the prevailing judgment creditor may demand as large a supersedeas bond as the law permits, “but the costs of that bond are taxable against the losing side following the resolution of the appellate process.” This method puts the plaintiff at risk for requesting too high a bond, but at the same time, as Justice Hawkins pointed out, it might deter a defendant from bringing a “weak” appeal. And even if the judgment was reduced but not reversed, the plaintiff would still bear a proportional share of the bond costs.
Since Texas courts have always considered “costs” as fees imposed by the courts themselves, a rule change would be required to implement the change. We would urge it do so. We continue to believe that the statute we helped craft didn’t allow plaintiffs to stack supersedeas bonds as part of a strategy to deter defendants from appealing large judgments. We don’t think the Legislature understood it that way, either, particularly with the advent of huge multidefendant cases we now see pretty routinely. It should also be pointed out that small to mid-size businesses will get caught up in the Court’s decision just as big ones such as Greystar. Forcing each one of them to post their own bond rather than chipping in with other defendants could well be disastrous. We hope that such an unintended consequence doesn’t occur, but experience tells that if it can occur, it will.
