Payola Justice: How Texas Supreme Court Justices Raise Money from Court Litigants

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In the late 1980s, a corruption scandal engulfed the Texas Supreme Court. The nation's leading newspapers editorialized against the freewheeling way that Texas justices:

• Conferred outside of the court room with parties from just one side of a dispute; and
• Raised huge sums of campaign money from parties with business before the court.

This heightened media scrutiny peaked in December 1987, when the investigative program "60 Minutes" broadcast its Texas Supreme Court feature "Justice for Sale."

At the crux of the scandal was a simple disbelief. Could Texas Supreme Court justices be schizophrenic enough to rake in $1 million in campaign contributions with one hand while impartially swinging the gavel with the other? This was all the more of a stretch given that parties with business before the court doubled as the justices' leading contributors. Concerns about this seamy side of the court reflect the relatively recent collision of the Texas Constitution (which mandates the election of supreme court justices) with exorbitant modern political campaigns¹. Texas is the largest of just nine states in which voters select Supreme Court justices through partisan elections².

In a 1973 trickle down from Watergate, the Legislature tightened campaign reporting requirements for Texas candidates, making it harder to ignore these judicial conflicts of interest. In the latter half of the 1970s, a little-known Supreme Court candidate pulled off an unusual upset. This upset benefited from voters who confused the names of the winning candidate with the names of unrelated public figures³. Such flukes convinced political consultants that name recognition is the name of the game in statewide races at the periphery of the electorate's radar screen. When candidates cannot cash in on a famous name, name recognition must be manufactured with huge advertising expenditures.

Like today, the court majority prior to the 1980s was widely seen as favoring defense lawyers and their corporate clients over plaintiffs' trial lawyers, who typically represent citizens in damage suits filed against corporations and insurance companies. In the late 1970s and early 1980s a high-stakes battle broke out for control of the Texas Supreme Court. The battle pitted corporate interests against the interests of plaintiffs' trial lawyers. By 1983, justices backed by plaintiffs' trial lawyers had garnered a court majority.

Two of the new trial lawyer-backed justices, Bill Kilgarlin and Ted Robertson, came to office with tens of thousands of dollars from controversial oil man Clinton Manges or his attorney, Pat Maloney. In 1982, a trial court found that Manges, as manager of oil leases that he co-owned with a South Texas family named Guerra, had violated his fiduciary duties to that family. In a decision upheld by an appellate court, the jury removed Manges as lease manager and awarded the Guerras $882,000 in damages.

Manges and Maloney appealed to the Supreme Court. After unsuccessfully trying to persuade the court to sign a draft opinion in which the Guerras would "take nothing," trial lawyer-backed Justice C. L. Ray wrote a final court opinion that preserved Manges' role as lease manager and cut his total damages from $882,000 to $382,000. Manges-backed Justice Robertson initially indicated that he would recuse himself from the case, but reversed himself when it became clear that Justice Ray needed his vote to prevail⁴.

McGinnis, Lochridge & Kilgore, the law firm representing the Guerras, then filed a request for the court to rehear the case without the participation of Justices Kilgarlin and Robertson. This highly unusual request trained a spotlight on the financial conflicts of the justices. Manges v. Guerra and similar scandals prompted investigations of Supreme Court justices by the House Judicial Affairs Committee and the behind-closed-doors, Supreme Court-controlled Commission on Judicial Conduct.

It soon became clear that many interests with business before the court were busily stuffing the coffers of Supreme Court candidates in the 1980s. Pennzoil and its lead attorney, Joe Jamail, contributed heavily to justices around the time that the court declined to review an $11 billion judgment that Pennzoil won against Texaco. The Texas Medical Association's PAC also spent freely to elect justices who were likely to sympathize with the medical establishment in malpractice suits. Going into the 1988 election, the Texas Medical Association's PAC spent $27,500 on Justice Gonzalez alone.

When Chief Justice John Hill tried to confront the raging court crisis in 1987 by resigning to promote the merit selection of judges, Republican Governor Bill Clements appointed Tom Phillips as a temporary replacement. Chief Justice Phillips first ran for the office in 1988, when he limited contributions to his campaign to $5,000 and headed a bipartisan "Clean Slate" of Supreme Court candidates backed by the business interests. Reacting to the Supreme Court scandals, voters tossed out incumbent Democratic justices financed by trial lawyers and replaced them with "Clean-Slate" justices financed by corporations and their defense lawyers.

To this day, Phillips campaign materials credit him with salvaging the court's reputation from being "ridiculed and pilloried." Yet Phillips and three other incumbent justices raised more than $1 million each in their 1996 races and much of this money came from contributors with business before the court. Phillips campaign materials also omit the role of citizen groups. After "60 Minutes" aired "Justice for Sale," Texas Public Citizen, Common Cause Texas, the League of Women Voters of Texas and similar groups kept up the reform drumbeat. In 1992 and 1993, reformers released a two-part report called "Political Contributions to the Supreme Court of Texas: An Appearance of Impropriety."

Responding to cries for reform, the Texas Legislature enacted the 1995 Judicial Campaign Finance Act. Though touted as fundamental reform, this law set indulgent contribution limits that allow Supreme Court candidates to take up to:

• $5,000 from individuals;
• $30,000 from PACs and lawyers associated with any given law firm⁵; and
• $300,000 from political action committees.

Few people realize that candidates can tap donors for these limits as many as three times: once for the primary, once for the runoff and once again for the general election.

Ten years after "Justice for Sale" aired, this study concludes that—while the faces and ideologies of the justices and their paymasters have changed—justices continue to take enormous amounts of money from litigants who bring cases before the court. The fact that the parties who finance the justices' campaigns repeatedly reappear on the court's docket documents the extent to which justice is still for sale in the Texas Supreme Court.

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