The Texas Business Courts (the “Business Courts”) began hearing cases on September
1, 2024.1 The purpose of the Business Courts is to provide a specialized venue for commercial
disputes presided over by judges with a smaller docket and judicial or litigation experience in
complex commercial matters. The Business Courts are codified in Chapter 25A of the Texas
Government Code. In effect, the Business Courts will allow commercial litigants an alternative,
and perhaps more ‘specialized’ forum to litigate business disputes as opposed to Texas state
courts. The below outlines several considerations commercial litigants should consider in
determining whether to proceed in filing a commercial dispute with the Texas Business Courts.
Procedure:
The Business Courts are governed by the Texas Rules of Civil Procedure, just as Texas
state courts. A litigant in the Business Courts retains its right to a trial by jury. Commercial
disputes are not required to be filed in the Business Courts, but rather provide litigants an
alternative to Texas state courts.
Judges:
Judges for the Business Courts are appointed to the Business Courts by the Governor of
Texas and serve a term of two (2) years. Judges are appointed to the Business Courts, and are
required to meet specific requirements, including at least 10 years’ experience in practicing
complex civil business litigation; practicing business transaction law; serving as a civil judge
within the state; or a combination of the three.
Venue:
The Business Courts are slit into eleven (11) divisions, each of which presiding of a
particular region of the State. The divisions of the Business Court are as follows:
District | County Seat |
First | Dallas |
Third | Travis |
Fourth | Bexar |
Eighth | Tarrant |
Eleventh | Harris |
Jurisdiction:
The Business Court has limited concurrent jurisdiction with state district courts. That is,
the Business Courts will be able to hear some, but not all, of the cases Texas state courts are
able to hear. Litigants will need to assess which court best suits the goals of their case. The
Business Courts are able to hear three general categories of cases:
- Cases with at least $5 million in controversy if the action relates to corporate
governance or derivative proceedings; by an organization or owner against the
organization or owner concerning an act or omission by the owner in their organizational
capacity; is against an owner, controlling person or managerial official of an organization
for breach of a duty owed to the organization; seeks to hold the owner or governing
person of an organization liable for an obligation of the organization; state and federal
trade or securities-related actions against an owner, controlling person or managerial official; or, arises out of the Business Organizations Code; - Cases exceeding a $10 million amount-in-controversy if the action arises out a
qualified transaction (a transaction, which is not a loan by a bank, with an aggregate
value of at least $10 million); involves contractual or other commercial transactions in
which the parties agreed that the Business Court has jurisdiction over the action (except
insurance contracts); or, is against an organization or officer arising out of a violation of
the Finance Code or Business and Commerce Code, subject to specific exclusions; and - Cases against publicly traded companies regardless of the amount in controversy
A case originally filed in Texas district courts can be removed to the Business Courts
either by a party’s motion or by the district court’s own request. Removed cases may be
remanded.
Appeals:
Appeals from the Business Courts will be heard exclusively by the newly created
Fifteenth Court of Appeals. The Fifteenth Court of Appeals is located in Austin, Texas. It holds
statewide civil intermediate appellate jurisdiction and exclusive intermediate appellate
jurisdiction over matters arising out of or related to a civil appeals brought by or against the state
or a board, commission, department, office, or other agency in the executive branch of the state
government, including a university system or institution of higher education as defined by
Section 61.003, Education Code, or by or against an officer or employee of the state or a board,
commission, department, office, or other agency in the executive branch of the state
government arising out of that officer’s or employee’s official conduct (subject to certain
exceptions).2 In addition, the Fifteenth Court has exclusive jurisdiction over appeals from the
Texas Business Courts, involving cases dealing with business disputes valued at more than $10
million.