Texas is establishing specialized business courts to handle complex commercial disputes more efficiently. These courts are set to commence operations on September 1, 2024, for cases filed on or after this date.
The new specialized Texas business courts are authorized by Chapter 25A of the Texas Government Code.
Here are some summary points about the new Texas business courts:
1. Jurisdiction and Cases:
- The Texas business courts will have original jurisdiction over disputes with an amount in controversy exceeding $5 million. This includes derivative actions, governance disputes, securities claims, and more. Publicly traded companies will fall under the business courts’ jurisdiction regardless of the amount in controversy
- The Texas business courts will have original jurisdiction over most disputes involving publicly traded companies.
- However, certain cases, such as those involving personal injury, death, legal malpractice, or claims under specific codes (e.g., Family Code, Estates Code), are excluded from the business courts’ jurisdiction unless supplemental jurisdiction is agreed upon by all parties and the judge.
2. Judges and Structure:
- Judges for the Texas business courts will be appointed by the governor for two-year renewable terms, subject to Senate confirmation. Candidates must have at least ten years of relevant legal experience and must reside in the court’s division.
- There will be eleven business court divisions.
- Dallas, Austin, San Antonio, Houston, and Fort Worth will start September 2024.
- The remaining six divisions, covering more rural areas, are expected to be established by the 2025 legislature.
- All appeals will be taken to the new 15th Court of Appeals, which will also start operations on September 1, 2024.
3. Rules and Procedures
- The Texas Supreme Court has adopted Rules of Practice in the Business Court related to the administration and procedures for the business courts, which will be integrated into the Texas Rules of Civil Procedure and Rules of Judicial Administration. Click here for analysis of the new rules.
- All Appeals with conforming subject matter and parties will be transferred to the Fifteenth Court of Appeals on September 1, 2024. Parties are asked to confer and advise the Court if you believe your appeal is subject to transfer to the Fifteenth Court of Appeals.
- A new expanded Appellate Docketing Statement is designed to help parties assess whether their appeal is within the exclusive jurisdiction of the Fifteenth Court of Appeals. See Section XV
4. Advantages of Texas business courts:
- The Texas business courts are designed to provide more predictable and consistent application of business laws. This may lead to the development of a body of precedential case law that can provide predictability to businesses operating in Texas.
- The Texas business courts are expected to provided consistent and efficient case management.