Local Insight: The New Rules of the Texas Business Court Explained

1. Introduction
   

   The Business Court is a statewide, specialized trial court created to resolve certain complex business disputes. Composed of eleven geographical divisions consistent with the existing Administrative Judicial Regions, five of those divisions are now operational — the First Business Court Division in Dallas, the Third Business Court Division in Austin, the Fourth Business Court Division in San Antonio, the Eighth Business Court Division in Fort Worth, and the Eleventh Business Court Division in Houston. The introduction of new Business Court Local Rules in March 2025 marks a significant change for litigants and legal practitioners. Understanding these changes is crucial for effective litigation in the Business Court.

2. Background: Creation of the Texas Business Court
   

   The Business Court was established to create a specialized court to handle complex business disputes efficiently and consistently. The legislative basis for its creation focuses on providing a dedicated forum for resolving such disputes.
   

3. The New Local Rules: Key Updates and Changes
   

   The newly promulgated local rules, effective March 1, 2025, bring several key updates and changes. These rules supplement and clarify the application of the Texas Rules of Civil Procedure (“TRCP”) in the Business Court. For a comprehensive understanding, litigants are encouraged to review all local rules thoroughly. However, below are some key provisions that merit particular attention.

   • Rule 2: Assignment and Supplemental Jurisdiction

   Rule 2 contains two notable provisions to highlight. First, Rule 2 allows Business Court judges to exchange benches and act for each other in any matter pending before the Business Court. We have already seen this procedure in action, with judges sharing the caseload across Business Court Divisions, but this provision codifies that practice.

   Second, Rule 2 also includes a notable jurisdictional provision. Under Section 25A.004(f) of the Texas Government Code, the Business Court has supplemental jurisdiction over related claims that form part of the same case or controversy within its original jurisdiction. These related claims may proceed in the Business Court only if all parties and the presiding judge agree. If there is no agreement, the claim may proceed concurrently in a court of original jurisdiction alongside related claims in the Business Court. Rule 2 now provides that parties are deemed to agree to the Business Court’s supplemental jurisdiction of any claim unless they move to sever or object within 30 days of their appearance or the filing of the first pleading or removal notice. This increases the chances that the Business Court will exercise supplemental jurisdiction over related claims, sometimes based on a failure to timely sever or object.

   • Rule 4: Corporate Disclosures and New Procedures for Discovery Disputes

   Rule 4 focuses on case management and discovery procedures. Importantly, in a change bringing state court practice more in line with federal court practice,¹ Rule 4 now imposes an automatic corporate disclosure obligation, requiring parties to identify all entities financially interested in the litigation.

   Another notable requirement housed within Rule 4 is the procedure for resolving discovery disputes. Before filing a discovery-related motion, parties must first attempt to resolve the dispute in good faith. If unresolved, the party seeking relief must file a summary letter detailing the dispute and certifying efforts to resolve it. This letter, limited to 700 words, must include specifics of the consultation. Other parties have seven days to respond with their own letter, also limited to 700 words. No further replies are allowed without Business Court permission. The Business Court may then schedule a conference, order further briefing, or issue an order based on the submissions. If the dispute remains unresolved, a formal discovery motion may be filed.

   Litigants must therefore be concise and must work to narrow the discovery issues in dispute as much as possible without judicial intervention. This approach not only aligns with the Business Court’s requirements but also promotes a more efficient resolution process.

   • Rule 6: Mediation and Settlement

   Under Rule 6, the Business Court may refer a pending dispute to mediation, either on its own or at a party’s request. Rule 6 introduces the Mediation Wheel (the “Wheel”), a system for referring disputes to qualified Texas mediators. The Business Court Clerk will maintain the Wheel, and parties may agree to use mediators not on the Wheel, subject to judicial approval. If parties cannot agree, the judge will select a mediator from the Wheel on a rotating basis. Qualified mediators must contact the Business Court Clerk and submit an application form available on the Business Court’s website to join the Wheel. The Business Court judges review applicants annually for approval.

   • Rule 10(c): Artificial Intelligence

   Finally, Rule 10(c) addresses the use of artificial intelligence (“AI”) in filings. The rule warns that, while AI use is not prohibited, the filing attorney or party remains independently responsible for the accuracy of all filings and must comply with all legal and ethical duties, including TRCP 13 and Texas Civil Practice and Remedies Code, Chapters 9–10.

4. Comparative Analysis: Travis County, Harris County, and Dallas County Rules
   

   To provide a concise comparison of how different courts handle various procedural aspects, the below chart illustrates the differences between the local rules of the Texas Business Court, Travis County, Harris County, and Dallas County. This chart covers key areas such as assignment, consolidation, scheduling orders, corporate disclosure, discovery-motion prerequisites, motions, mediation, emergency relief, and vacation letters.

   Business Courts Local Rules Comparison Table
   
   By examining these elements side by side, we can better understand the unique practices and procedural nuances of each court, aiding litigants and legal practitioners in navigating the specific requirements and expectations of their respective jurisdictions.

5. Practical Implications for Litigants and Practitioners
   

   Litigators must be adept at navigating the new local rules of the Business Court and understanding how they differ from the local rules or common practices in other state courts. Indeed, Rule 1 emphasizes the critical role of the Business Court Clerk in monitoring compliance. The Business Court Clerk ensures that documents adhere to both the TRCP and Business Court Local Rules. If deficiencies are identified, the filer must correct them within two business days to avoid potential court action, such as striking the pleadings. Failure to comply with these rules can have significant consequences for a case, so practitioners should stay abreast of the requirements, as well as future changes, as both the Business Court and other local rules evolve over time.

¹See, e.g., Fed. R. Civ. P. 7.1 (requiring corporate parties to file a statement that identifies any parent corporation and any publicly held corporation owning 10% or more of its stock); N.D. Tex. Local Civ. R. 3.1, 7.4 (requiring a certificate of interested persons including “all persons, associations of persons, firms, partnerships, corporations, guarantors, insurers, affiliates, parent or subsidiary corporations, or other legal entities that are financially interested in the outcome of the case”).

²In Travis County, though cases are assigned through the Central Docket, it is a hybrid system. In certain scenarios, a case will be assigned to a specific judge, such as complex cases and administrative appeals. See Travis Cnty. Local R. 2.6, 10.4(a). Note that on February 7, 2025, Chief Justice James D. Blacklock asked the Supreme Court Advisory Committee to study “the replacement of the central-docketing system . . . with a statewide requirement that each case be assigned to a particular judge.”  Letter from Chief Justice James D. Blacklock to Chief Justice Tracy E. Christopher, Chair Supreme Court Advisory Committee (Feb. 7, 2025), https://www.txcourts.gov/media/1460025/scac-referral-_february-2025-1.pdf. The Chief Justice further requested that the Committee propose draft rule amendments to that end. See id. Accordingly, the long-term applicability of the Travis County Hybrid/Central Docket is in question.

³Where there is no specific local rule, there may be an applicable judge-specific standing order or policy. For example, while Dallas County does not have a specific local rule regarding scheduling orders, certain district judges provide a uniform scheduling order. See, e.g., Dallas County, Standard Orders for the 44th District Court, https://tinyurl.com/yvs8hk6z. Similarly, while Dallas County has no specific local rule regarding the appointment of mediators, certain courts have procedures stating that the court will appoint a mediator if the parties cannot agree to one. See, e.g., Dallas County, Policies and Procedures for the 95th District Court (Mar. 20, 2024), https://tinyurl.com/2zw6ch86.

⁴See District Courts of Harris County, Civil District Courts New Form Scheduling and Docket Control Order (Apr. 29, 2020), https://www.justex.net/events/1271.