Denials from the Texas Supreme Court on motions for rehearing tend to be routine procedural dispositions. But on rare occasions, they're accompanied by a statement from a Justice regarding the denial – which provides key insights into what that Justice is thinking. 

The most recent example comes from In re Greystar Development & Construction, L.P. This case considers the requirements for suspending – or “superseding” – execution of Texas trial-court judgments while an appeal is pending. Under Texas law, a party seeking to supersede a judgment for money must post security equal to the amount of the money award, plus costs and interest for the estimated duration of the appeal. But the law also provides that the amount of required security cannot exceed the lesser of (1) 50% of the judgment debtor's net worth, or (2) $25 million. 

As I wrote about previously, in a splintered opinion, the Court answered one important question engendered by Section 52.006: Does the $25 million cap apply per judgment, or per judgment debtor? The 5-4 majority answered: Per judgment debtor. 

The Greystar Defendants subsequently sought rehearing, which the Court denied. But accompanying that denial was a statement by one member of the Greystar majority, Justice Hawkins – which was joined by Justices Young and Sullivan, two members of the Greystar dissent. 

Justice Hawkins's statement raises another important question. In Texas state court, large supersedeas bonds come with high administrative costs (think bond premiums and interest) that, unlike a money award, cannot be recovered if the judgment is reversed on appeal. Requiring judgment debtors to front these sums not only results in more expensive appeals, but also threatens to lead to resolving cases based on economic pressure rather than the merits. 

Federal law, however, is different. Under that regime, trial-court winners may demand as large a supersedeas bond as the law permits, but they must pay the costs of the bond should they lose on appeal. 

Judge Hawkins would adopt the cost-shifting approach that applies in federal court supersedeas practice. To him, this approach has two advantages. First, it accords with the “venerable presumption” that prevailing parties are entitled to their costs. Second, it better aligns the economic incentives. If security costs are shifted to the appellate loser, judgment creditors would be discouraged from demanding maximal bonds in cases with dim appellate prospects, while judgment debtors would be deterred from pressing weak appeals lest they be forced to pay security costs in addition to the judgment. Adopting federal supersedeas procedure in Texas state courts would also leave both sides better positioned to negotiate a fair settlement by emphasizing the case's merits rather than leveraging financial pressure points. 

Important in Justice Hawkins's statement is the relative ease with which this change could be adopted. No legislation is required; in his view, the Court need only amend Texas Rule of Appellate Procedure 43.4 to expressly include the costs of a supersedeas bond as taxable “costs” on appeal. If adopted, this would make a significant shift to Texas supersedeas practice. 

Key takeaways

• The requirements for superseding judgments in Texas state courts continue to evolve. The nuances of Texas's supersedeas regime have sharply divided courts and jurists across the state, including at the High Court. Texas practitioners should pay careful attention, because the landscape can quickly change.
• Justices continue to champion harmonizing state procedural rules with their federal counterparts. Recently, multiple justices have advocated for bringing state court practice more in line with the federal courts. Given many of the Justices' experience and expertise with federal practice, expect this trend to continue in other areas of Texas procedural law.