A new law to create a pair of so-called business courts would violate a section of the state constitution prescribing the election of district court judges, attorney Bob Burke claimed during oral arguments to the Oklahoma Supreme Court on Tuesday. Ben Lepak, general counsel for Gov. Kevin Stitt, argued the new jurists and venues prescribed in Senate Bill 632 do not constitute state district courts, and he suggested the proposed “adjudicative bodies” are akin to boards and commissions.
“The Legislature is authorized to create agencies, boards and commissions that exercise adjudicative authority,” Lepak argued. “What we have here is the Legislature exercising its legitimate authority to create a body that is adjudicative in nature and is appealable to this court.”
Burke, who is representing fellow attorneys and plaintiffs Joe White and Jason Waddell, argued otherwise.
“This law is an unconstitutional attempt to usurp and strip away the constitutional right of voters to have their controversies heard by their elected court judges,” Burke said. “The most constitutionally repugnant part of this bill my co-counsel has spoken about in the law takes away your right, my right and the rights of everyone in this court room (…) to elect district judges.”
About an hour after oral arguments ended Tuesday, the court issued a stay pending the conclusion of the litigation about SB 632, which would otherwise take effect Sept. 1 and make cases eligible to be filed in the business courts Jan. 1. Vice Chief Justice Dana Kuehn, Justice James Winchester, Justice James Edmondson, Justice Douglas Combs, Justice Noma Gurich and Justice Richard Darby favored the stay, while Chief Justice Dustin Rowe, Justice M. John Kane IV and Justice Travis Jett dissented.
Passed by Oklahoma lawmakers at the end of this year’s legislative session, SB 632 would establish “specialized courts” in Tulsa County and Oklahoma County “with specific jurisdiction over actions involving business issues.” Proponents of the bill, chiefly Stitt, argue that having judges specialized in business law will create a more business-friendly legal system in the state and align Oklahoma with other states that have established business courts. Such courts would take on cases in which alleged damages meet or exceed $500,000, and rulings by the new business court judges would be appealable to the Court of Civil Appeals and Supreme Court.
Opponents of the new business courts have criticized their proposed jurisdiction as being too broad, and they have argued that that Stitt and the Legislature are trying to circumvent a constitutional requirement that district court judges be elected. Under SB 632, the governor would appoint business court judges from among three nominees presented by the speaker of the House of Representatives. The governor’s selection would then require State Senate approval.
Stitt is the lone defendant in the lawsuit, although Oklahoma Senate President Pro Tempore Lonnie Paxton (R-Tuttle) and Speaker of the House Kyle Hilbert (R-Bristow) were originally named alongside the governor before being removed.
‘Contrary to the will of the people’
Audrey Weaver, Stitt’s deputy general counsel, raised questions Tuesday as to whether the Oklahoma Supreme Court should have taken up the case challenging SB 632 at all.
She argued that White and Waddell have none of the three aspects of legal standing needed to bring the issue to the Oklahoma Supreme Court, as they can point to no specific “injury in fact” against them. They also argued the case fails to meet the causality standard, as its plaintiffs cannot directly trace any purported injury back to the governor’s actions.
“This court has consistently reaffirmed it does not issue advisory opinions resolving hypothetical disputes or abstract policy debates, yet that is what petitioners have asked this court to do,” Weaver said. “This court should decline that invitation.”
Lepak, who participated in negotiations over the scope and appointment authority of the business courts this legislative session, said he felt the case was only brought against Stitt because critics were on the losing end of a “policy battle.”
“The petitioners have lost a policy battle at the Legislature, so they now come here to ask this court to reverse the outcome,” Lepak said. “Not because Senate Bill 632 is clearly, palpably and plainly unconstitutional — it’s not — but because they simply don’t like it as a matter of policy.”
View Tuesday’s full oral argument on SB 632 here.But Burke said his clients’ arguments had nothing to do with whether they supported business courts from a political perspective.
“I’m not arguing policy, because I know the long-standing tradition — a proper one — that it is the Legislature’s duty to make policy, but they’re not given a total landscape to say, ‘We can pass anything we want to,'” Burke said. “They can’t violate the constitution. My entire argument is premised upon the fact that Article 7 of the constitution is violated, in several sections, by the passage of this law. The Legislature has attacked the judiciary, I believe, by saying we want to take over the appointment (…) of district judges.”
Article 7, Section 9 of the Oklahoma Constitution stipulates that “district judges and associate district judges shall be elected by the voters of the several respective districts or counties at a non-partisan election in the manner provided by statute.”
Because the new business courts would be established as divisions of existing district courts, Burke argued they should be considered district judges and subject to election, not gubernatorial appointment.
“It subverts the will of the people and the constitution,” Burke said, adding that the power to create additional courts falls to the judiciary, not the Legislature.
Burke highlighted two other concerns about the business courts: their specified $1,500 filing fee for cases and the fact rural litigants would be required to have their qualifying complaints heard in either Tulsa County or Oklahoma County.
Lepak disagreed with Burke’s assessment that the fee will restrict access to the new court because the law says qualifying cases “may” be filed in the business courts.
“(SB 632) expands access to the courts, it does not restrict it,” Lepak said. “The business courts are opt-in forums for complex commercial disputes. No party is required to file there. Traditional district courts remain open to everyone without a fee. This fact alone resolves the claim.”
Lepak argued that the business courts being divisions of existing district courts alone would not make the appointees district judges. Rather than viewing business courts as traditional courts, Lepak cited the Legislature’s authority Title 75, Section 250.2 to establish agencies and other “adjudicative bodies.” He said that power has previously been used to establish new systems like Oklahoma’s drug courts and the Oklahoma Workers’ Compensation Commission. The statute authorizing creation of drug courts, Title 22, Section 471.1, says “each district court of this state is authorized to establish a drug court program,” while SB 632 declares the business courts are “hereby created,” striking prior language that would give the Supreme Court authority to establish them.
When Lepak described the new courts as an “adjudicative body” with the ability to take on cases that could subsequently be appealed, Darby asked, “And what does that sound like?”
“A court,” Lepak answered, though he added he does believe the Legislature could create additional courts.
Combs repeatedly voiced his concern with the fact the new business court judges would be paid as much as an associate justice on the Oklahoma Supreme Court, and Gurich noted the new judges would have broader jurisdiction than the district courts they serve within while sharing some of the same staff.
Justices pondered the possibility of the Supreme Court using its power to sever particular portions of the bill to make it constitutionally compliant, such as the appointment method of the business court judges. Also discussed was the possibility of a constitutional amendment to create business courts, which would require a statewide vote.
Stitt counsel urges court not to issue ‘advisory opinions’
Before the Supreme Court should take up the case, Weaver argued, the issue at hand should make its way through lower appellate courts. Winchester seemingly disagreed, asking if it may be “more economical” to address the issue before the new courts are set up and judges are appointed.
“I think the constitutional limits of this court should be respected,” Weaver argued, “regardless of if it would be more efficient to take up the case now.”
Combs seemed unconvinced by arguments that the lawsuit largely rested on “hypothetical and speculative” damages.
“I don’t think it’s speculative to say these two judges never stand for election,” Combs said, adding that the statute would “disenfranchise” every voter in at least Tulsa County and Oklahoma County.
After Tuesday’s oral arguments ended, Lepak said his team felt the proceedings “went great.” Stitt issued a press release shortly after, urging the Oklahoma Supreme Court to make a favorable ruling and hinting at the broad belief that Oklahoma’s court system moves too slowly.
“This lawsuit is exactly what you’d expect from trial lawyers who treat the courtroom like a business model,” Stitt said. “They’re worried about losing billable hours and that’s why they’re scrambling to stop our progress before it starts.”
Speaking to the press after arguments, Burke expressed his hope that the court would at least issue a stay on the bill as it is currently written, which it did an hour or so later.
“We got to say what we wanted to, and they really couldn’t answer the question, ‘Is this a business court or is it a division?'” Burke said. “And either one of them are unconstitutional. (…) If they move the effective date of past the next Legislature, then the Legislature can try to fix it, because it was a poorly written bill.”
On Wednesday, Hilbert’s team updated its webpage detailing the business court appointment process to note the court’s stay of the new law.
“We will abide by the court’s temporary stay on establishing this business court and look forward to a timely resolution,” Hilbert said in a statement. “The House is committed to ensuring Oklahoma is a pro-business state and provides an effective court system for all Oklahomans.”
The House application to be considered as a possible business court judge is also posted online, and it asks applicants to list their political party affiliation “for tracking purposes only.” A spokeswoman for Hilbert said the application was modeled off of “the standard application we use for every appointment” and that some appointments require specific party affiliation while others do not
(Update: This article was updated at 2:10 p.m. Wednesday, July 16, to include comment from Hilbert and additional information.)
