Pohl v. Cheatham and the Territorial Reach of Texas Civil Barratry Law

Pohl v. Cheatham and the Territorial Reach of Texas Civil Barratry Law

I. Introduction

The Supreme Court of Texas’s decision in Michael A. Pohl v. Mark Kentrell Cheatham, Sr. (No. 23‑0045) confronts a recurring modern problem: how far Texas law can reach when Texas lawyers engage in allegedly wrongful conduct that targets clients in other states. Although we are provided only with Justice Busby’s dissenting opinion, that dissent—joined by Justices Lehrmann and Boyd—allows us to reconstruct the core holding and its significance.

The case centers on Texas-based attorneys who allegedly used “case runners” (paid solicitors) to obtain clients in other states, all while the lawyers themselves operated from Texas offices. The clients later sued in Texas to void their contingent-fee agreements and to obtain statutory remedies, invoking the state’s civil barratry statute, Texas Government Code § 82.0651.

Busby’s dissent reveals that the Court’s majority held Texas’s civil barratry statute could not be used in this scenario because doing so would be an impermissible extraterritorial application of Texas law. The majority applied the now-familiar, two-step “extraterritoriality” framework used by the U.S. Supreme Court in federal cases, identified “in-person solicitation” of clients as the statute’s “focus,” and concluded that, because those solicitations occurred outside Texas, § 82.0651 could not be applied.

Justice Busby disagreed sharply. He argued that:

  • The relevant statutes, read together, make this a purely domestic application of Texas law.
  • The Legislature deliberately drafted § 82.0651 to key off any “conduct violating” Penal Code § 38.12(a) or (b), not just in-person solicitation.
  • The allegedly wrongful “financing” and “offers to pay” the solicitors occurred in Texas, squarely within the state’s regulatory and territorial reach.

The dispute thus presents not only a technical conflict about statutory “focus,” but also a more fundamental question about institutional roles: when courts apply extraterritoriality presumptions, are they faithfully implementing the Legislature’s choices, or effectively rewriting those choices in the name of territorial restraint?

II. Statutory and Regulatory Framework

A. Texas Penal Code § 38.12 (Barratry and Solicitation of Professional Employment)

Texas Penal Code § 38.12 criminalizes various forms of barratry—improper solicitation of professional employment—with a special focus on attorneys and related actors. The opinion reproduces the full text of subsections (a) and (b), which are central: 

(a) A person commits an offense if, with intent to obtain an economic benefit the person:

(1) knowingly institutes a suit or claim that the person has not been authorized to pursue;

(2) solicits employment, either in person or by telephone, for himself or for another;

(3) pays, gives, or advances or offers to pay, give, or advance to a prospective client money or anything of value to obtain employment as a professional from the prospective client;

(4) pays or gives or offers to pay or give a person money or anything of value to solicit employment;

(5) pays or gives or offers to pay or give a family member of a prospective client money or anything of value to solicit employment; or

(6) accepts or agrees to accept money or anything of value to solicit employment.

(b) A person commits an offense if the person:

(1) knowingly finances the commission of an offense under Subsection (a);

(2) invests funds the person knows or believes are intended to further the commission of an offense under Subsection (a); or

(3) is a professional who knowingly accepts employment within the scope of the person's license, registration, or certification that results from the solicitation of employment in violation of Subsection (a).

Key features:

  • Multiple types of regulated conduct. The statute reaches:
    • Direct in-person or telephonic solicitation ((a)(2));
    • Paying or offering to pay prospective clients directly ((a)(3));
    • Paying or offering to pay third parties (case runners, family members) to solicit clients ((a)(4)-(5));
    • Accepting money to act as a solicitor ((a)(6));
    • Financing or investing in the barratry scheme ((b)(1)-(2)); and
    • Professionals knowingly accepting employment arising from illegal solicitation ((b)(3)).
  • Economic benefit intent. Subsection (a) requires “intent to obtain an economic benefit.”
  • Criminal offense. Violations are third-degree felonies. Busby notes Texas could prosecute these lawyers criminally because critical elements of the offense (offers to pay and financing) allegedly occurred in Texas.

B. Texas Government Code § 82.0651 (Civil Barratry: Voiding Fee Agreements)

In 2011, the Texas Legislature enacted § 82.0651 to create a civil remedy for barratry. As relevant here:

  • Subsection (a) establishes “an action to void a contract for legal services that was procured as a result of conduct violating Penal Code Section 38.12(a) or (b).”
  • Subsection (e) states the statute’s purpose:
    “to protect those in need of legal services from unethical, unlawful solicitation and to provide efficient and economical procedures to secure that protection.”

Two textual features drive the dissent:

  1. Breadth of the trigger. The Legislature chose the phrase “conduct violating” § 38.12(a) or (b). That phrase:
    • Is not limited to one form of conduct; and
    • Incorporates all the varied behaviors listed in § 38.12(a)-(b) (soliciting, paying, offering to pay, financing, accepting employment, etc.).
  2. Stated purpose. The explicit purpose in subsection (e) is not restricted to in-person solicitation alone; it is to protect legal consumers from “unethical, unlawful solicitation” in general, whatever form the underlying § 38.12 violation takes.

C. Texas Penal Code § 1.04 (Territorial Jurisdiction in Criminal Law)

Section 1.04 governs when Texas can prosecute criminal offenses. It grants jurisdiction where “conduct . . . that is an element of the offense occurs inside this state.” Busby emphasizes:

  • Offers to pay and financing, if they occurred in Texas, are elements of the barratry offense under § 38.12(a)(4) and (b)(1).
  • Thus, Texas criminal law clearly reaches the alleged misconduct; this underscores, in his view, the oddity of the majority’s conclusion that civil remedies do not reach the same conduct.

D. Disciplinary Regime for Texas Lawyers

Independently of criminal prosecution and civil barratry claims, Texas lawyers face professional discipline:

  • Government Code § 82.062 and the Texas Disciplinary Rules of Professional Conduct (especially Rules 7.03, 8.04(a)(9), and 8.05(a)) bar improper solicitation and professional misconduct.
  • In State Bar of Texas v. Kilpatrick, 874 S.W.2d 656 (Tex. 1994), the Court recognized disbarment as an appropriate sanction for barratry.

Busby notes that even under the majority’s approach, these other mechanisms remain in play. But he argues that the 2011 civil barratry statute evidences a legislative choice to add a powerful civil enforcement mechanism—one the majority now significantly narrows.

III. Factual and Procedural Background (As Reflected in the Dissent)

From the dissent we can reconstruct the following core facts:

  • The lawyers. The petitioners are Texas attorneys operating out of Texas offices.
  • The scheme alleged. While located in Texas, these lawyers allegedly:
    • Contracted with “case runners” (third-party solicitors) to obtain clients in other states; and
    • Paid or agreed to pay those case runners to solicit business for them.
  • The clients. The respondents are clients located in other states who were solicited there and who later hired the Texas attorneys.
  • The civil suit. The clients sued the attorneys in Texas, seeking:
    • To void their fee contracts under Government Code § 82.0651(a) as contracts “procured as a result of conduct violating Penal Code Section 38.12(a) or (b)”; and
    • Associated statutory remedies available under the civil barratry scheme (not fully reproduced in the dissent).
  • Alleged violations. The clients alleged violations of:
    • § 38.12(a)(4) – paying or offering to pay others to solicit employment; and
    • § 38.12(b)(1) – knowingly financing the commission of such offenses.
    The dissent stresses that, as pleaded, these offers to pay and financing activities allegedly took place in Texas.
  • Court of appeals decision. The court of appeals (First District, Houston) held that applying § 82.0651 in this context was a permissible domestic application of Texas law.
  • Supreme Court disposition. The Texas Supreme Court granted review and reversed (or otherwise rejected) the court of appeals’ conclusion, holding that applying § 82.0651 here would violate the presumption against extraterritorial application of Texas statutes. Busby dissents from that holding.

IV. Summary of the Supreme Court’s Opinions

A. The Majority’s Holding (As Reflected in the Dissent)

While we do not have the majority opinion text, the dissent extensively quotes and characterizes it, making the central holding clear.

  1. Adoption of a federal-style extraterritoriality framework.
    • The majority borrows the U.S. Supreme Court’s two-step framework used for federal statutes (e.g., Abitron Austria GmbH v. Hetronic Int’l, Inc., 600 U.S. 412 (2023)).
    • Step one: Presume statutes apply only domestically unless the Legislature clearly indicates extraterritorial intent.
    • Step two: If no clear extraterritorial intent is found, “identify the focus of the [legislative] concern underlying the provision at issue” and “ask whether the conduct relevant to that focus occurred within [domestic territory].”
  2. No clear extraterritorial intent at Step One.
    • The majority finds no explicit legislative statement that § 82.0651 applies to conduct in other sovereigns’ territories.
    • On that basis, it treats the statute as presumptively domestic in scope.
  3. Narrow “focus” on in-person solicitation at Step Two.
    • The majority identifies the statute’s “focus” as “the in-person acts of solicitation” that “procured the legal-services contracts.”
    • It characterizes the “core conduct the Legislature sought to address” as the actual solicitation of clients—essentially the behavior covered by § 38.12(a)(2).
    • Other forms of conduct listed in § 38.12(a) and (b) (financing, paying intermediaries, accepting employment, etc.) are not treated as determinative for territorial analysis.
  4. Application to the facts.
    • The clients were physically solicited outside Texas; the case runners’ “work” was completed in other states.
    • Because, in the majority’s view, the “conduct relevant to [the statute’s] focus” took place entirely outside Texas, using § 82.0651 to void the contracts would amount to an extraterritorial application of Texas law.
    • Accordingly, the civil barratry cause of action is unavailable on these facts.

B. Justice Busby’s Dissent

Justice Busby agrees that courts should apply a two-step framework but concludes that, properly applied, this is plainly a domestic case:

  1. The Legislature’s explicit focus controls.
    • Section 82.0651(e) expressly states the statute’s purpose: “to protect those in need of legal services from unethical, unlawful solicitation and to provide efficient and economical procedures to secure that protection.”
    • Subsection (a) specifies the trigger for that protection: a legal-services contract “procured as a result of conduct violating Penal Code Section 38.12(a) or (b).”
    • The “conduct relevant to that focus,” for extraterritoriality purposes, is therefore whatever conduct qualifies as a § 38.12(a) or (b) violation—not just in-person solicitation.
  2. Incorporating § 38.12 means incorporating all of it.
    • § 38.12(a)-(b) cover nine distinct types of conduct (soliciting, paying clients, paying others, paying family members, accepting money to solicit, financing offenses, investing in barratry, accepting tainted employment, etc.).
    • Per WesternGeco LLC v. ION Geophysical Corp., 585 U.S. 407 (2018), when a civil statute “works in tandem” with other provisions, courts must assess its focus “in concert” with those incorporated provisions.
    • Similarly, in RJR Nabisco, Inc. v. European Community, 579 U.S. 325 (2016), the U.S. Supreme Court looked to the extraterritorial scope of predicate criminal laws incorporated into civil RICO to determine RICO’s reach.
    • Thus, when § 82.0651 keys off “conduct violating” § 38.12(a) or (b), all listed conduct types bear on the statute’s focus.
  3. The relevant “violating conduct” occurred in Texas.
    • The clients’ live pleading allegedly asserts that the attorneys:
      • “offered to pay or give a person money or anything of value to solicit employment” in violation of § 38.12(a)(4); and
      • “knowingly financed the commission of such an offense” in violation of § 38.12(b)(1).
    • Those offers and financing decisions allegedly took place at the lawyers’ Texas offices.
    • Because those acts are themselves violations of § 38.12(a)-(b), and they occurred in Texas, the application of § 82.0651 is domestic under step two, even if other aspects of the scheme unfolded elsewhere.
  4. The majority’s approach improperly rewrites the statute.
    • By treating “acts of solicitation” as the sole “core” focus, the majority effectively:
      • Elevates § 38.12(a)(2) over the other eight forms of conduct the Legislature chose to regulate; and
      • “Cherry-picks” one type of conduct while discarding the rest for territorial-scope purposes.
    • Busby argues that courts should not select one “core” focus based on their own value judgments; instead, they must “stick to using traditional tools of statutory construction,” giving effect to all the text the Legislature enacted.
    • He quotes Fitzgerald v. Advanced Spine Fixation Systems, Inc., 996 S.W.2d 864, 866 (Tex. 1999): “When we stray from the plain language of a statute, we risk encroaching on the Legislature’s function to decide what the law should be.”
  5. Step One need not be reached.
    • Because the case involves a permissible domestic application at step two (in his view), Busby finds it unnecessary to decide whether the Legislature clearly authorized extraterritorial applications of § 82.0651.
    • He does, however, note that a federal district court (A.S. v. Salesforce, Inc., N.D. Tex. 2024) has made “a thorough case for extraterritoriality” under another Texas statute that incorporates Penal Code provisions, and that RJR Nabisco supports partial extraterritorial reach where predicate criminal statutes have that reach.
  6. Legislative–judicial dialogue and institutional costs.
    • Busby acknowledges that, in response to judicial decisions narrowly construing statutes, legislatures often amend the statutes to expand or clarify their reach.
    • He cites legal scholarship (e.g., Simowitz) describing this pattern in federal extraterritoriality cases, and references In re Doe, 19 S.W.3d 346 (Tex. 2000), for the idea that such dialogue can be salutary.
    • But here, he deems it “wasteful” because he believes the Legislature’s intent and statutory focus are already manifest from the text.
    • Requiring legislative “fixes,” he suggests, forces the Legislature to re-spend scarce resources to reassert a policy choice it already clearly made.

V. Precedents and Authorities Cited

A. Federal Extraterritoriality Cases

1. Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010)

Morrison is a landmark decision on the territorial scope of federal securities law (§ 10(b) of the Securities Exchange Act). Before Morrison, courts often applied:

  • a “conduct” test (if substantial wrongful conduct occurred in the U.S., the statute could apply); or
  • an “effects” test (if foreign conduct had substantial effects in the U.S., the statute might apply).

The U.S. Supreme Court rejected those approaches as unpredictable and manipulable, instead:

  • Reaffirming the presumption against extraterritoriality; and
  • Introducing the “focus” concept: the “objects of the statute’s solicitude” (e.g., the regulated conduct, the transactions, or the interests protected).

Busby’s dissent notes that commentators have criticized the focus test itself as indeterminate, mirroring the Court’s criticisms of the earlier conduct/effects tests.

2. RJR Nabisco, Inc. v. European Community, 579 U.S. 325 (2016)

RJR Nabisco addressed whether RICO (Racketeer Influenced and Corrupt Organizations Act) applied to foreign racketeering activity. RICO incorporates a long list of predicate criminal offenses. The Court:

  • Applied the two-step framework; and
  • Looked to the extraterritorial reach of the underlying predicate criminal statutes to determine RICO’s reach.

For Busby, this is an important analogy: just as RICO’s civil provisions inherit some extraterritorial reach from incorporated criminal statutes, § 82.0651’s civil remedy should be interpreted “in concert” with the breadth of Penal Code § 38.12.

3. WesternGeco LLC v. ION Geophysical Corp., 585 U.S. 407 (2018)

WesternGeco involved patent infringement and the award of foreign lost-profit damages. The Court again used the focus framework, emphasizing:

“When determining the focus of a statute, if it works in tandem with other provisions, it must be assessed in concert with those other provisions.”

Busby uses this principle to criticize the majority for focusing on § 82.0651 in isolation rather than in tandem with § 38.12(a)-(b), which it explicitly incorporates.

4. Abitron Austria GmbH v. Hetronic Int’l, Inc., 600 U.S. 412 (2023)

Abitron is the most recent U.S. Supreme Court case applying the two-step framework (here, to the Lanham Act’s trademark provisions). It provides the template the Texas Supreme Court majority adopts:

  • Step One: Ask whether the statute clearly indicates extraterritorial application.
  • Step Two: If not, determine the “focus” of the statute and whether the “conduct relevant to that focus” occurred domestically.

Busby accepts the use of this framework but disputes its application: he argues that, once one identifies the textual focus of § 82.0651 (especially through its incorporation of § 38.12), the conduct relevant to that focus occurred in Texas.

B. Texas Cases on Territorial Reach and Statutory Construction

1. Citizens Ins. Co. v. Daccach, 217 S.W.3d 430 (Tex. 2007)

Daccach concerned the applicability of the Texas Securities Act to transactions involving non-Texas residents and non-Texas conduct. The Court used traditional interpretive tools—text, structure, purpose, and context—to determine the statute’s reach. Busby suggests these kinds of methods, applied directly to statutory language, are preferable to a malleable “core focus” approach.

2. Coca-Cola Co. v. Harmar Bottling Co., 218 S.W.3d 671 (Tex. 2006)

In Harmar, the Court analyzed whether the Texas Free Enterprise and Antitrust Act applied to out-of-state conduct. It largely declined to apply the statute to foreign transactions that lacked “significant contacts” with Texas, again relying heavily on statutory text and legislative intent. Busby cites this as another example of Texas courts resolving territorial issues without relying on the federal “focus” test.

3. Marmon v. Mustang Aviation, Inc., 430 S.W.2d 182 (Tex. 1968)

Marmon dealt with applying the Texas wrongful-death statute to a plane crash in Mexico. The case is a classic in Texas conflicts and extraterritoriality. Busby references it to show that Texas has long used conventional interpretive tools to determine a statute’s territorial scope.

4. Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864 (Tex. 1999)

Fitzgerald reaffirms that courts must adhere to the statutory text and avoid substituting their policy judgments:

“[W]hen we stray from the plain language of a statute, we risk encroaching on the Legislature’s function to decide what the law should be.”

Busby deploys this principle against the majority’s decision to elevate one species of barratry (direct solicitation) as the statute’s “core” while marginalizing others.

5. In re Dep’t of Family & Protective Servs., 273 S.W.3d 637 (Tex. 2009)

This case underscores separation-of-powers concerns:

“[I]t is not for courts to decide if legislative enactments are wise or if particular provisions of statutes could be more effectively worded to reach what courts or litigants might believe to be better or more equitable results.”

Busby cites it to argue that if the Legislature chose to regulate a broad swath of barratry-related conduct, courts should not “trim” that scope based on their own sense of what is “core.”

6. In re Doe, 19 S.W.3d 346 (Tex. 2000)

Doe is referenced in the context of legislative–judicial dialogue: sometimes, when courts narrowly interpret a statute, the Legislature responds with amendments. Busby accepts that such iterative lawmaking can be clarifying, but he regards it as unnecessary here because the legislative intent is, in his view, already clear.

C. Other Authorities

  • A.S. v. Salesforce, Inc. (N.D. Tex. 2024). A federal district court decision (as described by Busby) that found partial extraterritorial reach for another Texas statute incorporating Penal Code provisions. It supports the idea that when civil statutes piggyback on criminal statutes with defined territorial reach, the civil statute may inherit some of that reach.
  • Law review articles. Busby cites scholarship (e.g., Franklin Gevurtz; Aaron Simowitz) critiquing the “focus” test as indeterminate and manipulable, paralleling the earlier criticisms of conduct/effects tests in Morrison.

VI. Legal Reasoning and Doctrinal Analysis

A. The Presumption Against Extraterritoriality

The foundational doctrine is that, absent clear legislative direction, laws are presumed to apply only within the enacting sovereign’s territory:

  • This protects comity and avoids conflict with other jurisdictions’ regulatory regimes.
  • At the same time, the doctrine must be applied carefully so as not to undercut legitimate domestic regulation of conduct with interstate or international dimensions—especially where some elements occur at home.

Both the majority and dissent accept that—barring explicit contrary language—Texas statutes are presumed domestic. The disagreement lies in:

  1. What counts as a “clear statement” of extraterritorial reach (Step One); and
  2. Whether this case involves an extraterritorial application at all (Step Two).

B. Step Two Dispute: What Is the “Focus” of § 82.0651?

The heart of the disagreement is methodological. The majority:

  • Treats the “focus” of § 82.0651 as the actual, in-person solicitation of clients—a narrow subset of the conduct covered by § 38.12(a)-(b).
  • Determines that only the location of that solicitation matters for territorial analysis.

Busby, in contrast, argues:

  • We cannot determine the focus of § 82.0651 by ignoring its explicit incorporation of § 38.12(a)-(b).
  • The statute’s focus includes all the conduct the Legislature has defined as “barratry” in § 38.12.
  • Where several types of violative conduct occur in different places (e.g., financing in Texas, solicitation elsewhere), the domestic occurrences can be sufficient to render the application domestic.

This is more than a technical quarrel. It affects:

  • The reach of Texas’s civil barratry enforcement;
  • The scope of liability for lawyers who structure schemes that cross state boundaries; and
  • The degree to which courts can “select” which statutory elements matter most for territorial purposes.

C. Reading “Conduct Violating § 38.12(a) or (b)”

Busby emphasizes that § 82.0651(a) is triggered when a contract was procured “as a result of conduct violating § 38.12(a) or (b).” From a textualist standpoint:

  • “Conduct violating” is an umbrella term; it does not single out one type of violation.
  • All nine categories in § 38.12(a)-(b) are equally “conduct violating” that statute.
  • Thus, a contract can be tainted if:
    • The lawyer directly solicited the client; or
    • The lawyer funded or orchestrated others’ solicitations; or
    • The lawyer knowingly accepted employment resulting from such solicitations.

The majority, according to Busby, effectively rewrites this phrase as “conduct consisting of in-person solicitation” and disregards conduct consisting of:

  • Offers to pay runners or family members (§ 38.12(a)(4)-(5));
  • Financing or investing in the scheme (§ 38.12(b)(1)-(2)); or
  • Knowingly accepting employment arising from such illegality (§ 38.12(b)(3)).

Under Busby’s reading, if any of that violating conduct occurs in Texas, applying § 82.0651 is domestic at Step Two. The majority’s approach essentially demands that the “core” violation (here, defined as direct solicitation) occur in Texas, even where other statutory violations indisputably did.

D. The Role of Criminal Jurisdiction (§ 1.04) in the Analysis

Busby buttresses his reading with § 1.04’s criminal-jurisdiction rule: Texas may prosecute if any element of the offense occurred within the state. The offers to pay and financing, if done in Texas, are such elements.

His logic runs roughly as follows:

  1. The Penal Code clearly contemplates Texas jurisdiction over barratry schemes where some critical conduct (e.g., financing) occurs in Texas, even if solicited victims are elsewhere.
  2. Section 82.0651 piggybacks on § 38.12’s definition of violative conduct and is designed to provide civil relief “in tandem” with the criminal prohibition.
  3. It would be anomalous to:
    • Allow Texas prosecutors and disciplinary authorities to act against lawyers in such scenarios; but
    • Deny civil clients the statutory remedy the Legislature created for contracts procured by that same violative conduct.

The majority, by contrast, appears to treat the criminal-law jurisdiction analysis as analytically distinct from the civil statute’s territorial reach. The dissent accepts that distinction doctrinally, but considers the criminal-law structure strong contextual evidence that the Legislature did not intend to exempt this type of conduct from the civil remedy.

E. Strengths and Weaknesses of the Competing Approaches

1. Majority’s Approach

Strengths:

  • Implements a clear, high-level rule: Texas civil statutes do not reach purely out-of-state solicitation absent explicit legislative authorization.
  • Reduces potential clashes with other states’ regulation of legal advertising and solicitation (e.g., where another state allows certain forms of solicitation that Texas forbids).
  • Aligns Texas law with the U.S. Supreme Court’s current extraterritoriality framework, providing symmetry and predictability for multi-jurisdictional actors.

Weaknesses (as the dissent frames them):

  • Relies on a judge-selected concept of “core conduct” instead of the full range of conduct the Legislature explicitly regulated.
  • Conflicts with the plain structure of § 38.12(a)-(b), which shows no legislative intent to rank some forms of barratry as more “central” than others.
  • Risks undermining the 2011 Legislature’s deliberate choice to provide a robust civil enforcement tool targeting unethical solicitation in all its forms.
  • Creates practical anomalies:
    • Lawyers could potentially insulate themselves from § 82.0651 by outsourcing in-person solicitation to out-of-state agents while making all strategic and financial decisions in Texas.
    • Clients are denied civil remedies even when the orchestrating misconduct clearly occurred in Texas.

2. Dissent’s Approach

Strengths:

  • Closely adheres to statutory text:
    • Gives full force to “conduct violating § 38.12(a) or (b).”
    • Interprets § 82.0651 and § 38.12 together, as WesternGeco and RJR Nabisco suggest.
  • Respects legislative design:
    • Recognizes that the Legislature intended to protect legal consumers through a broad private remedy.
    • Avoids judicial narrowing that might require statutory “fixes.”
  • Better matches Texas’s criminal jurisdiction structure, ensuring that conduct Texas can criminally punish can also support the civil remedy the Legislature created.

Potential concerns:

  • Could lead to Texas civil enforcement in situations where other states have their own, perhaps more permissive, rules about lawyer solicitation.
  • May increase multi-jurisdictional complexity when lawyers and clients are scattered across states and countries.
  • Raises questions about how far Texas can regulate conduct that, while partially occurring in Texas (e.g., financing decisions), is principally directed at other states’ residents and markets.

VII. Practical Impact and Future Implications

A. Cross-Border Law Practice and Case-Runner Arrangements

The direct practical consequence is for Texas lawyers who:

  • Operate from Texas but target clients in other states;
  • Use case runners or third-party marketers located near accident sites, natural disasters, or mass-tort events outside Texas; and
  • Structure their operations so that in-person contact with potential clients occurs out of state.

Under the majority’s approach (as described by the dissent):

  • Clients solicited outside Texas will face substantial hurdles invoking § 82.0651, even if:
    • All the strategic planning and financing decisions were made in Texas; and
    • The lawyers knew or directed that § 38.12(a)-(b) would be violated.
  • Lawyers may perceive a reduced risk of civil barratry exposure for cross-border schemes, though criminal and disciplinary risks remain.

This may incentivize “jurisdictional arbitrage,” where soliciting activity is deliberately located in other states to avoid the reach of Texas civil barratry law, even while the masterminds remain in Texas.

B. Enforcement Architecture: Criminal, Disciplinary, and Civil Remedies

Busby underscores that three interconnected systems regulate barratry:

  1. Criminal law (Penal Code § 38.12 + § 1.04 jurisdiction);
  2. Professional discipline (State Bar rules and Government Code § 82.062); and
  3. Civil remedies (Government Code § 82.0651 and related statutory provisions).

The majority’s territorial narrowing affects primarily the third leg:

  • Criminal prosecution of such schemes remains theoretically possible in Texas if an element occurs in the state.
  • The State Bar can discipline lawyers for barratry regardless of where the client is physically solicited, provided the lawyer is subject to Texas rules.
  • But clients may not be able to void their contracts and seek statutory damages under § 82.0651 when the “focus conduct” (as the majority defines it) is extraterritorial.

This rebalancing may:

  • Shift enforcement burdens from private litigants to public prosecutors and regulators; and
  • Reduce the economic disincentive for lawyers who consider barratry a calculated risk, especially in high-volume, multi-state mass-tort practices.

C. Legislative Response and Statutory Drafting

Busby anticipates (or at least contemplates) a legislative response:

  • The Legislature could amend § 82.0651 to:
    • Expressly state that it applies whenever any of the “conduct violating § 38.12(a) or (b)” occurs in Texas; or
    • Explicitly grant the statute extraterritorial reach where Texas lawyers or Texas-based conduct are involved.
  • Such amendments would likely use “clear statement” language tailored to overcome the majority’s extraterritoriality analysis.

Even beyond barratry, this decision sends a message about statutory drafting in Texas: if the Legislature wants civil statutes that incorporate Penal Code provisions to extend beyond state borders—or at least to cover multi-state schemes—it may need to say so expressly or specify the territorial triggers (e.g., “if any element of the violation occurs in Texas”).

D. Methodological Precedent for Texas Courts

The decision also establishes a methodological precedent:

  • Texas courts will now look to U.S. Supreme Court extraterritoriality cases such as Morrison, RJR Nabisco, WesternGeco, and Abitron when assessing the territorial reach of Texas statutes.
  • They will use the two-step framework and “focus” test, not just traditional Texas statutory construction, to decide whether an application is domestic or extraterritorial.

Future disputes may arise over:

  • Which provisions count as the “focus” of a statute;
  • How to treat statutes that incorporate other provisions (civil + criminal, or multiple statutes); and
  • How much weight to give explicit purpose clauses like § 82.0651(e) when determining the focus.

VIII. Explaining Key Concepts in Plain Terms

A. What Is “Barratry”?

“Barratry” is a term of art for improper solicitation of professional employment. In the legal context, it typically refers to:

  • Lawyers (or their agents) actively chasing clients—especially vulnerable ones like accident victims—in ways that violate ethical rules or statutes.
  • Paying “case runners” to drum up business near accident scenes, hospitals, or disaster sites.

Texas treats barratry as both a crime (Penal Code § 38.12) and a basis for professional discipline. Since 2011, it is also a basis for civil remedies, allowing clients to void their contracts and sometimes recover additional damages.

B. “Civil Barratry” vs. “Criminal Barratry”

  • Criminal barratry is prosecuted by the state. Convictions can lead to fines, imprisonment, and collateral consequences like loss of a law license.
  • Civil barratry is a lawsuit brought by the client. It generally aims to:
    • Void or reform the fee agreement; and
    • Obtain statutory damages or fee forfeiture as a deterrent and remedy.

Both forms hinge on “violations” of § 38.12, but their procedural posture and remedies differ. This case is about the civil remedy under Government Code § 82.0651.

C. Case Runners and Third-Party Solicitors

“Case runners” are individuals paid to recruit clients for lawyers. They may:

  • Visit accident scenes or hospitals;
  • Approach victims or their families; or
  • Use inside information to target people involved in a specific type of incident.

Paying runners to solicit employment is precisely the sort of conduct targeted by § 38.12(a)(4)-(6) and is at the core of the allegations against the lawyers in this case.

D. The Extraterritoriality “Focus” Test in Simple Terms

The “focus” test asks:

  1. What exactly does the statute care most about?
    • Is it the sale transaction?
    • The misleading statement?
    • The physical act?
    • The harm to a particular class of people?
  2. Where did that key conduct or event occur?
    • If it happened inside Texas, the statute applies domestically, even if some other conduct occurred elsewhere.
    • If it happened entirely outside Texas, the statute probably does not apply, unless the Legislature said otherwise.

The dispute here is over what § 82.0651 “cares most about.” Is it:

  • Only the in-person meeting where the client is approached (majority)?
  • Or any of the acts that make up the barratry scheme, including the financing and offers to pay runners (dissent)?

IX. Conclusion

Pohl v. Cheatham, as illuminated by Justice Busby’s dissent, marks a significant development in Texas law on two fronts:

  1. Territorial scope of civil barratry.
    • The Texas Supreme Court’s majority holds that Government Code § 82.0651 cannot be used to void fee contracts where the “acts of solicitation” occurred entirely outside Texas, even if Texas lawyers in Texas financed and orchestrated the scheme.
    • This narrows the civil barratry remedy’s reach in cross-border contexts, limiting clients’ ability to leverage § 82.0651 when their initial in-person contact with case runners occurs in another state.
  2. Adoption of the federal extraterritoriality framework in Texas statutory interpretation.
    • Texas courts will now employ the U.S. Supreme Court’s two-step, “focus”-oriented analysis to determine whether applications of Texas statutes are domestic or extraterritorial.
    • The selection of a statute’s “focus” will be a central, and potentially contested, step in future cases—especially where statutes incorporate multiple forms of conduct or multiple provisions.

Justice Busby’s dissent provides a robust textual and structural critique of the majority’s approach. He argues that:

  • The Legislature’s chosen language—“conduct violating § 38.12(a) or (b)”—and the breadth of § 38.12 itself show an intent to regulate a wide spectrum of barratry-related conduct, not just face-to-face solicitation.
  • Because the lawyers’ alleged offers to pay case runners and financing decisions occurred in Texas, applying § 82.0651 here is a straightforward domestic application, fully consistent with both Texas’s criminal jurisdiction and the statute’s protective purpose.
  • The majority, by isolating in-person solicitation as the statute’s sole “focus,” effectively rewrites the law and undermines the Legislature’s 2011 effort to empower clients with a meaningful civil remedy against unethical solicitation.

Going forward, the decision will shape how Texas regulates the interstate business strategies of its lawyers, particularly those who rely on case runners and out-of-state solicitation to build dockets. It also sends a signal to the Legislature: if Texas wishes its civil statutes to apply to multi-state schemes involving Texas-based actors and conduct, it may need to speak with even greater clarity about when and how those statutes reach beyond state borders.

In this sense, Pohl v. Cheatham is not just about barratry. It is a foundational case on how Texas courts will approach the increasingly important boundary between domestic regulation and extraterritorial restraint in an era of cross-border legal practice and nationwide solicitation campaigns.

Case Details

Year: 2025
Court: Supreme Court of Texas

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