13 minute read
Special Judge Trials Are an Alternative to Arbitration
By Paul T. Curl
Most lawyers are familiar with arbitration, which offers the opportunity to litigate a dispute privately and away from the courthouse. But are you aware that your case can also be tried by a “special judge” with many of the same advantages as arbitration—and some key differences? Lawyers and their clients may find that trial by a special judge provides an attractive alternative to a trial at the courthouse or to arbitration.
Special judge trials are governed by Tex. Civ. Prac. & Rem. Code ch. 151. Parties who want a trial by a special judge, however, must have a pending civil or family law case filed in a district court, statutory probate court, or statutory county court (county court at law):
On agreement of the parties, in civil or family law matters pending in a district court, statutory probate court, or statutory county court, the judge in whose court the case is pending may order referral of the case as provided by this chapter and shall stay proceedings in the judge’s court pending the outcome of the trial. Any or all of the issues in the cases, whether an issue of fact or law, may be referred.
Id. § 151.001 The statute makes no mention of referral of a case from a constitutional county court, in which you might find yourself if you are in one of Texas’s less-populated counties.
Like arbitration, a special judge trial can occur only if the parties agree to the process, and, like arbitration, a special judge trial is strictly nonjury. Section 151.002 of the Texas Civil Practice and Remedies Code requires requires all parties to agree to: (1) request referral by the court in which the case is filed; (2) state the issues to be referred; (3) state the time and place for the trial; (4) identify the special judge; (5) confirm that the judge has agreed to hear the case; and (6) state the fee to be paid to the special judge. Thus, the parties must not only agree to the process, but must also agree to the specific judge who will serve as special judge. If the parties cannot agree on the judge, then there will be no special judge trial. Because Chapter 151 provides no procedure for picking a special judge if the parties cannot agree on the judge, a special judge trial may not be suitable in highly contentious disputes in which the parties cannot agree on much of anything.
By contrast, in arbitration, either the parties’ agreement or the rules of an arbitration service—such as the American Arbitration Association (AAA) or JAMS—will provide a procedure for selection of the arbitrator. If the parties can agree upon an arbitrator, all the better, but if the parties cannot agree, then an arbitrator can be selected for them through a neutral process, into which the parties have input, established under the rules of the arbitration service. An arbitrator may have specific expertise that is valuable to the parties, such as in construction or securities law, or may not, and the parties will be stuck with the selected arbitrator.
Although anyone—even a non-lawyer— can serve as an arbitrator, not just anyone can serve as a special judge. A special judge must be a retired or former judge of a district court, statutory probate court, statutory county court, or appellate court. Tex. Civ. Prac. & Rem. Code § 151.003. (Again, the statute does not mention a constitutional county court.) A special judge must also have served at least four years as a judge; must have developed expertise in his or her area of specialty; must not have been removed from office or resigned while under investigation for discipline or removal; and must be current on continuing legal education. Id. Given these requirements, the pool of candidates qualified to serve as a special judge is relatively limited when compared to the pool of persons who can serve as an arbitrator.
If the parties agree on a special judge, they must then submit an agreed order to the court referring the case to the special judge and specify the issues that are being referred. Tex. Civ. Prac. & Rem. Code § 151.004. In Bexar County District Court, the order of referral logically should be presented to the Monitoring Court, since the parties will be removing the case from the regular trial docket. Because there is no limit on the issues that can be referred, the order of referral can refer “all issues” in the case to the special judge for trial.
Chapter 151 speaks in terms of referring a “trial” to a special judge and does not directly address the question of whether pretrial matters—such as discovery disputes, motions to exclude expert witnesses, motions for summary judgment, and requests for injunctive and other pretrial relief—can also be referred to a special judge. The Bexar County District Court has, however, more than once referred all matters—including pretrial proceedings— to a special judge. Eventually, the question of whether this is allowable under Chapter 151 will be answered when a dissatisfied litigant appeals or seeks mandamus of a pretrial ruling by a special judge and challenges the special judge’s authority to rule on such matters.
A special judge, like an arbitrator, must be paid. The parties must split the cost of the special judge in equal shares. Tex. Civ. Prac. & Rem. Code § 151.009(a)(1). The statute neither says whether a special judge can charge more for a case with more parties, as mediators often do, nor limits the amount a special judge can charge the parties.
Chapter 151 requires that a record be taken down by a court reporter. Tex. Civ. Prac. & Rem. Code § 151.008. The parties in a special judge trial must equally share the cost of the court reporter, along with any other administrative costs. Tex. Civ. Prac. & Rem. Code § 151.009(a)(2). Since a special judge trial must begin as a pending court case, moreover, the only filing fee is the same fee that the plaintiff would pay to file any lawsuit at the courthouse. There are no administrative fees. If the parties have other “administrative” expenses, such as the cost to rent a location for the trial, they will be required to share those expenses equally.
By contrast, in arbitration, there is no record unless the parties agree to a record or—absent an agreement—one party is willing to pay for a record; and speaking of administrative costs, the costs imposed by AAA or JAMS just for handling the case can be exorbitant. Both require a filing fee that can run into thousands dollars, and in addition to the arbitrator’s fees, both AAA and JAMS charge administrative fees during the pendency of the arbitration proceeding.
Although, in arbitration, the arbitrator usually can reallocate the costs of the arbitration—including the arbitrator’s fees— according to the outcome of the arbitration, Chapter 151 has no provision for reallocating the cost of the special judge, the court reporter, or any other expense. As in any case before an active judge, however, the special judge can award court costs, such as the filing and service fees. Costs that are unique to one party are borne by that party. Tex. Civ. Prac. & Rem. Code § 151.009(b).
The parties must agree upon the time and place for the trial before a special judge. Tex. Civ. Prac. & Rem. Code § 151.002(4).
Trial is not to be held at the courthouse, and no public employee may be involved in the trial during regular working hours, “[u]nless otherwise ordered by a referring judge.” Tex. Civ. Prac. & Rem. Code § 151.010. Chapter 151 does not specify the possible grounds for allowing a trial by special judge at the courthouse, or with the assistance of a public employee during regular working hours.
Arbitration is private and not open to the public, but Chapter 151 does not make a trial before a special judge private, although sometimes a special judge is referred to as a “private judge.” In fact, nothing prevents a member of the public from attending a trial before a special judge, other than the fact that hearing and trial dates are not ordinarily publicized.
Pleadings and evidentiary documents used in an arbitration are not available to the public, but in a case referred to a special judge, pleadings, motions, and other documents are still filed with the clerk of the referring court and can be seen by the public. A party wanting to restrict documents from public view must follow Tex. R. Civ. P. 76a, just like a party in any other case filed at the courthouse and heard by an active judge. In arbitration, the rules of evidence and procedure are usually relaxed, but not so in a trial before a special judge. In a trial before a special judge, the rules of procedure and evidence that apply in the referring court also apply before the special judge. Tex. Civ. Prac. & Rem. Code § 151.005. For all practical purposes, it is the same as a trial at the courthouse before an active judge, with the only difference being that a special judge cannot hold a person in contempt unless the contemptuous act occurred in the judge’s presence. Tex. Civ. Prac. & Rem. Code § 151.006.
At the conclusion of the case, the special judge “must comply with the requirements for a verdict by the court.” Tex. Civ. Prac. & Rem. Code § 151.011. Chapter 151 is not clear about whether a “verdict” means findings of fact and conclusions of law, though, or whether “verdict” simply means the court’s judgment. The verdict must be delivered within sixty days after the conclusion of the trial, “[u]nless otherwise specified in an order of referral.” If the referring court does not authorize a later verdict—and the special judge does not timely issue a verdict under the default rule—then the court may grant a new trial. Chapter 151 does not specify the possible grounds for allowing the special judge’s verdict to be delivered more than sixty days after the trial concludes.
In most instances, the result of an arbitration is not appealable. This is a doubleedged sword of arbitration—the prevailing party prefers an unappealable outcome, whereas the non-prevailing party may want to appeal. By contrast, a special judge’s verdict can be appealed just like any other case tried at the courthouse before an active judge. Tex. Civ. Prac. & Rem. Code § 151.013. Any appeal “is from the order of the referring judge’s court.” Id. This language has been construed to mean that the referring court must sign off on the judgment of the special judge, and that appellate deadlines run from the date of the referring court’s signature. Rainier Income Fund I, Ltd. v. Gans, 501 S.W.3d 617, 622 (Tex. App.—Dallas 2016, pet. denied). The fact that a judgment rendered by a special judge can be appealed reveals another important difference between arbitration and trial before a special judge—an arbitrator is not strictly bound to follow the applicable substantive law; however, since the ruling of a special judge can be appealed, it necessarily follows that the special judge is bound to follow the procedural and substantive law that applies to the case.
An arbitrator’s ruling cannot be immediately enforced. If the losing party refuses to comply with the arbitrator’s award, then suit must be filed to confirm the award and convert it into a court judgment that can be enforced by legal process, such as a writ of execution. The judgment of a special judge, on the other hand, is a judgment that can be enforced according to the same rules and timeframe that apply to any other court judgment.
As mentioned, a special judge trial—like arbitration—can occur only by agreement of the parties. Arbitration, however, is usually something that the parties have agreed to in a contract signed long before any dispute arises. Can the parties agree by contract that any dispute will be resolved by trial before a special judge, in the same manner that the parties can stipulate in a contract that they will submit any dispute to arbitration? The fact that the parties must agree to the specific judge would make this complicated, but one solution might be to provide, in the contract, a method of selecting a special judge. If the parties agree on a method for selecting a special judge, and that method is strictly followed, would a court consider the selected judge to be one that the parties have agreed upon? Until someone tries this and a court rules on it, the answer is “maybe.”
Can the parties to an arbitration agreement opt, instead, for a special judge trial? Definitely. If the parties agree to waive arbitration, agree to seek a special judge trial, and agree upon the judge, someone must first file a lawsuit (preferably before anyone has paid a filing fee to AAA or JAMS), then the parties must submit an agreed order referring the case to the special judge.
The point here is not to pick on arbitration. For many, the enhanced privacy, relaxed adherence to the rules and substantive law, and lack of an available appeal are attractive features of arbitration; and in certain cases, having an arbitrator with specialized expertise may be a big advantage. Trial before a special judge, though, offers a viable alternative to arbitration or to litigating at the courthouse. The parties must agree to it, and to the judge, but the advantages of a special judge trial should be persuasive to lawyers and their clients. A special judge trial offers the certainty of knowing what judge will try the case, the structure of the Texas rules governing evidence and procedure, and the flexibility of scheduling hearings and the trial at whatever times and dates to which the parties and the special judge may agree— including times and dates when an active judge may not ordinarily be available. It offers more privacy than a trial at the courthouse, albeit less than arbitration. A special judge trial is no more expensive, and likely less expensive, than arbitration. It also offers, for better or for worse, a right of appeal to anyone who is dissatisfied with the outcome of the case. A special judge trial is worth considering and discussing with your clients.
