State v. Volkswagen Aktiengesellschaft

692 S.W.3d 467

The STATE of Texas, Petitioner,

v.VOLKSWAGEN AKTIENGESELLSCHAFT, Respondent

The State of Texas, Petitioner,

v.Audi Aktiengesellschaft, Respondent

No. 21-0130, No. 21-0133

Supreme Court of Texas.

OPINION DELIVERED: November 18, 2022

On Petition for Review from the Court of Appeals for the Third District of Texas

Patrick K. Sweeten, Nanette Marie Dinunzio, Mark A. Steinbach, Austin, for Other interested party.

Patrick K. Sweeten, Austin, Atty. Gen. W. Kenneth Paxton Jr., Jacob Petry, Jeffrey C. Mateer, Austin, Abigail Frisch Vice, Mark A. Steinbach, Austin, Amy Rodriguez, Judd E. Stone II, Rance L. Craft, Nanette Marie Dinunzio, Austin, Brent Webster, Kyle Hawkins, Houston, Ryan Lee Bangert, David Terry, Dallas, for Petitioner.

Samuel Acker, Dallas, Jeffrey S. Levinger, Jeffery B. Wall, Richard A. Sayles, Dallas, Robert J. Giuffra Junior, William Sandy Snyder, Robert Sayles, Dallas, Michael H. Steinberg, Judson Littleton, William B. Monahan, for Respondent.

PER CURIAM

We lift the abatement order issued June 24, 2022, and reinstate these cases to our active docket.

Following the voluntary recusal of two of the Court’s nine justices, the Chief Justice, pursuant to Texas Government Code Section 22.005(a), requested that the Governor of the State of Texas appoint two qualified and active appellate justices or district judges to participate in the Court’s determination of these consolidated appeals. Respondents VW Germany and Audi Germany¹ objected and urged the Chief Justice to rescind the request on the basis that allowing the Governor to appoint justices in this case would create both due-process and ethical problems because the State is a party. Respondents argue that the Court should dismiss the petitions as improvidently granted if five of the seven remaining justices cannot concur on a decision, as the Texas Constitution requires. See Tex. Const. art. V, § 2(a); Tex. R. App. P. 56.1(d). For the reasons explained below, we deny Respondents’ requests.

I. Background

The Attorney General of the State of Texas, acting on behalf of the Texas Commission on Environmental Quality (TCEQ), sued two related foreign corporations—VW Germany and Audi Germany—asserting violations of Texas environmental statutes² in connection with an alleged vehicle-emissions cheating scandal that has come to be referred to as "dieselgate." Respondents filed special appearances challenging Texas courts’ authority to exercise personal jurisdiction over them. The trial court concluded Respondents are subject to personal jurisdiction in Texas, and Respondents appealed. A divided court of appeals reversed and dismissed the State’s claims. 665 S.W.3d 22 (Tex. App.—Austin Dec. 22, 2020). The State sought review, and this Court granted both petitions and consolidated them for oral argument, which was heard on February 22, 2022. While the cases have been pending, two of the Court’s nine justices recused sua sponte. The Court abated the cases on June 24, and the Chief Justice, relying on Section 22.005 of the Government Code, requested by letter that the Governor "commission two persons with the qualifications prescribed for Justices of the Supreme Court, each either an active appellate court justice or active district court judge, to participate in the deliberation and determination of these cases." By letter dated August 25, 2022, Governor Abbott responded, appointing two active appellate court justices to participate in the Court’s determination of the cases.³

Respondents submitted letters to the Court on June 29 and July 13, 2022, objecting to the Governor’s appointment of the two substitute justices. They correctly point out that Section 22.005(a) is not mandatory but, rather, vests the Chief Justice with discretion to request appointment of justices under these circumstances. And they argue the Chief Justice should rescind his request because employing the statutory process here would violate the principle that "no one may be the judge in his or her own cause." Respondents advance various theories in support of this core complaint. Although they acknowledge the Governor, the Attorney General, and TCEQ (the client-agency in this case) are different actors, Respondents urge us to treat them—and the commissioned substitute justices—as if they were all one, contending that employing the Section 22.005 certification process "would effectively allow the State to be the judge of its own cause." Next, relying on Caperton v. A.T. Massey Coal Co., 556 U.S. 868, 129 S.Ct. 2252, 173 L.Ed.2d 1208 (2009), they argue that even if the Governor is not technically a named party, he "has the kind of stake in these cases" that would violate constitutional guarantees of due process and due course of law if he were to commission justices under Section 22.005(b). Third, they contend any justice appointed in this case would be required to recuse under Texas’s procedural rules and ethical canons. Respondents proclaim there is but one path forward if five of the seven remaining justices cannot concur on a decision as required by our Constitution: to dismiss the petitions as improvidently granted under Rule of Appellate Procedure 56.1(d), leaving the jurisdictional question the cases present to be resolved in a future case.

II. Governing Law

[1–4] The United States Constitution guarantees that a state shall not deprive any person of life, liberty, or property without due process of law. U.S. Const. amend. XIV, § 1. The Texas Constitution includes a similar but not identical guarantee. See Tex. Const. art. I, § 19 ("No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the due course of the law of the land."). A fair trial in a fair tribunal is a basic requirement of due process. In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 99 L.Ed. 942 (1955). A fair tribunal, in turn, requires a neutral and detached hearing body or officer. See Brumit v. State, 206 S.W.3d 639, 645 (Tex. Crim. App. 2006) (citing Gagnon v. Scarpelli, 411 U.S. 778, 786, 93 S.Ct. 1756, 36 L.Ed.2d 656 (1973)). "The due process clause entitles a person to neutrality in adjudicative proceedings in both civil and criminal cases. This neutrality helps to guarantee ‘that life, liberty, or property will not be taken’ " in error "while preserving ‘both the appearance and reality of fairness.’ " Texaco, Inc. v. Pennzoil, Co., 729 S.W.2d 768, 844 (Tex. App.—Houston [1st Dist.] 1987, writ ref’d n.r.e.) (citation omitted) (quoting Marshall v. Jerrico, Inc., 446 U.S. 238, 242, 100 S.Ct. 1610, 64 L.Ed.2d 182 (1980)). "To this end no man can be a judge in his own case and no man is permitted to try cases where he has an interest in the outcome." Id. (quoting In re Murchison, 349 U.S. at 136, 75 S.Ct. 623). But that interest cannot be defined with precision; "[c]ircumstances and relationships must be considered." In re Murchison, 349 U.S. at 136, 75 S.Ct. 623.

[5, 6] While these constitutional guarantees protect the state’s strong interest in judicial integrity, they rarely are implicated in disputes regarding judicial disqualification and recusal. See FTC v. Cement Inst., 333 U.S. 683, 702, 68 S.Ct. 793, 92 L.Ed. 1010 (1948) ("[M]ost matters relating to judicial disqualification [do] not rise to a constitutional level." (citing Tumey v. Ohio, 273 U.S. 510, 523, 47 S.Ct. 437, 71 L.Ed. 749 (1927))). "[O]nly in extreme cases would disqualification on the basis of bias and prejudice be constitutionally required." Texaco, 729 S.W.2d at 844 (citing Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813, 821, 106 S.Ct. 1580, 89 L.Ed.2d 823 (1986)). Allegations of bias and prejudice typically are not enough to sustain claims that constitutional due-process rights have been violated. See Aetna, 475 U.S. at 821, 106 S.Ct. 1580. Rather, the judge or justice must have "a more direct stake in the outcome" of the case. See id.

A further reason that constitutional guarantees are only rarely implicated in disputes regarding judicial disqualification and recusal is that Congress and the states, by legislation and rule, have imposed more rigorous protections of judicial integrity than our Constitutions mandate. The result is that most cases involving questions of judicial disqualification and recusal are determined under nonconstitutional standards. Tumey recognized this:

All questions of judicial qualification may not involve constitutional validity. Thus matters of kinship, personal bias, state policy, remoteness of interest, would seem generally to be matters merely of legislative discretion.

273 U.S. at 523, 47 S.Ct. 437 (citing Wheeling v. Black, 25 W. Va. 266, 270 (1884)).

Indeed, the Supreme Court of the United States has recognized only three situations in which the Due Process Clause requires disqualification:

(1) when the judge has a financial interest in the outcome of the case, see id. (judges may not preside over cases in which they have a "direct, personal, substantial pecuniary interest");

(2) when the judge seeks to preside over a contempt proceeding against a witness who testified in secret before the judge, see In re Murchison, 349 U.S. at 137, 75 S.Ct. 623 (a judge may not act as a grand jury and then adjudicate contempt charges against "the very persons accused as a result of his investigations"); 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." Caperton, 556 U.S. at 884, 129 S.Ct. 2252.

Outside of these situations, determinations whether disqualification or recusal is required are made by reference to the Texas Code of Judicial Conduct, the Texas Rules of Appellate Procedure, and the Texas Rules of Civil Procedure.

The grounds for disqualification and recusal under Texas law are set out in Rule of Civil Procedure 18b. Relevant to ...