Texas Business Court and Texas Rule of Civil Procedure 166(g)

The Texas Business Court (the Court) has recently used Texas Rule of Civil Procedure 166(g) to decide early legal issues in cases nearing trial.¹ This rule, which “empowers a trial court to convene a pretrial conference”² in order to “assist in the disposition of the case without undue expense or burden to the parties”³ is helping the Court achieve its output and efficiency goals.

Rule 166 is not a new rule and it is not unique to the Court, but the Court’s recent, novel uses of Rule 166(g) are notable. Rule 166 has been a part of the Texas Rules of Civil Procedure since 1941, but “it was little used until broadened by amendment in 1990.”⁴ Rule 166 allows trial courts to hold pre-trial conferences to consider a variety of issues, including discovery deadlines, stipulations of fact, the exchange of witness lists, proposed jury charges and settlement, among other matters. Subsection (g) “authorizes trial courts to decide matters that, though ordinarily fact questions, have become questions of law because ‘reasonable minds cannot differ on the outcome.’”⁵ It is this subsection that the Court has relied upon to decide legal issues in two cases: Marathon Oil Co. v. Mercuria Energy America and Primexx Energy Opportunity Fund, LP et al. v. Primexx Energy Corporation et al.

In Marathon Oil Co., the Court used 166(g) to rule on two issues—a dispute over the controlling terms of the parties’ agreement⁶ and the applicable damages theory⁷—allowing the parties to streamline trial preparation. In another case, Primexx Energy Opportunity Fund, LP et al., the Court relied on 166(g) to dismiss a cause of action prior to trial⁸ and also invoked the Rule to “direct[] the parties to brief [further] issues.”⁹

In Marathon Oil, the case followed a fast timeline of eight months from filing to trial, and Rule 166(g) assisted the Court in the efficient administration of the case. The Court issued a scheduling order in mid-May ordering the parties to “file a Joint Advisory on Early Legal Issues” by the end of July. Once the parties’ joint advisory was filed, the Court issued an order four days later “invit[ing] legal briefing on two such issues identified by both parties for early resolution.” Briefing on both issues was due only two weeks later. The Court ruled on the first issue in September,¹⁰ and it ruled on the second issue in October.¹¹ Thus, the Court determined both issues before the case’s November 3 trial date.

A similarly swift timeline occurred in the Primexx Energy case. In early March, the Court issued an opinion and order on a summary judgment motion that directed the parties, pursuant to Rules 166(g) and (p), to brief certain salient issues that the Court had identified but that the parties had not directly addressed in previous briefing. The Court limited the briefs to “no more than ten pages.”¹² Four days later, the Court issued a scheduling order, and by mid-May both parties had filed their supplemental briefs. Less than one week from when both briefs were filed, the Court issued its ruling on the issue.¹³ The timeline from the Court’s identification of the issues to its ruling was just under two and a half months.

The speed with which Rule 166(g) allowed the Court in both Marathon Oil and Primexx Energy to identify and rule on legal issues bodes well for litigants and attorneys eager to see the Court maintain its commitment to timely resolution of complex business issues.