Texas Supreme Court Reaffirms Strong Presumption That Texas Statutes Do Not Apply Extraterritorially
Client Alert | May 13, 2025
Pohl v. Cheatham, No. 23-0045 – Decided May 9, 2025
On May 9, the Texas Supreme Court held that Texas’s civil barratry statute doesn’t apply to soliciting legal-services contracts outside Texas.
“We reaffirm our longstanding presumption that a civil statute does not have extraterritorial effect unless the Legislature makes clear that such effect is intended.”
Justice Huddle, writing for the Court
Background:
Two Texas lawyers entered into legal-services contracts with clients in Louisiana and Arkansas to represent those clients in personal-injury cases filed in courts outside Texas. After those cases settled, the clients sued the Texas lawyers under Texas’s civil barratry statute, seeking to void their legal-services contracts. The clients alleged that the lawyers directed and financed out-of-state case runners to solicit clients, and that the lawyers coordinated and funded these efforts from their Texas offices.
The Texas lawyers moved for summary judgment, arguing that Texas’s civil barratry statute doesn’t apply because the alleged solicitation occurred outside Texas. The trial court granted summary judgment, but the court of appeals reversed. It held that applying Texas’s civil barratry statute wouldn’t be impermissibly extraterritorial because some of the lawyers’ acts, such as financing the out-of-state runners, occurred in Texas.
Issue:
Does Texas’s civil barratry statute apply to acts of solicitation that occurred outside Texas?
Court’s Holding:
No. Nothing in the civil barratry statute’s text overcomes the strong presumption against extraterritoriality. Applying the statute to the clients’ claims in this case would be impermissible because the statute’s focus is on the acts that procured the legal-services contracts—all of which occurred outside Texas.
What It Means:
- The Court reaffirmed the strong presumption against extraterritoriality: “[T]he Legislature generally legislates with Texas concerns in mind, and Texas legislation therefore is meant to apply only within Texas’s borders.” Op. 15. The decision makes clear that defendants can challenge a plaintiff’s statutory claim on the ground that it seeks to give the statute an impermissible extraterritorial effect.
- The Court rejected the position that a civil statute should be applied extraterritorially “merely because some or any conduct related to the violation occurs in Texas,” explaining that “the presumption would be meaningless if any domestic conduct could defeat it.” Op. 21–22. Instead, the Court stressed that courts must “home in on the core conduct the Legislature sought to address—the object of the statute’s solicitude—and determine where that conduct occurred.” Op. 22.
- Relying heavily on the U.S. Supreme Court’s extraterritoriality precedents, the Court adopted a two-step framework for analyzing the extraterritoriality of Texas statutes. First, Texas courts consider whether the statutory text expresses a clear intent to overcome the “strong presumption against extraterritorial application of a Texas statute.” Op. 17–18. If not, courts must then assess whether applying the statute to the plaintiff’s claim would be an impermissible extraterritorial application. To do so, courts must “identify the ‘focus’ of the Legislature’s concern underlying the provision at issue” and “ask whether the conduct relevant to that focus occurred within or outside Texas.” Op. 21.
The Court’s opinion is available here.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding developments at the Texas Supreme Court. Please feel free to contact the following practice group leaders:
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Allyson N. Ho +1 214.698.3233 aho@gibsondunn.com |
Julian W. Poon +1 213.229.7758 jpoon@gibsondunn.com |
| Brad G. Hubbard +1 214.698.3326 bhubbard@gibsondunn.com |
Related Practice: Texas General Litigation
| Trey Cox +1 214.698.3256 tcox@gibsondunn.com |
Collin Cox +1 346.718.6604 ccox@gibsondunn.com |
Gregg Costa +1 346.718.6649 gcosta@gibsondunn.com |
| Mike Raiff +1 214.698.3350 mraiff@gibsondunn.com |
Russ Falconer +1 214.698.3170 rfalconer@gibsondunn.com |
This alert was prepared by Texas of counsels Ben Wilson and Kathryn Cherry and Texas associates Elizabeth Kiernan, Stephen Hammer, and Andrew Mitchell.
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