Insight, Analysis, and Resources Covering the Evolving Texas Judicial System

Texas Governor Greg Abbott signed House Bill 19 on June 9, 2023, codifying the new Texas Business Court.

The goal of the new Business Court is to utilize commercially focused judges to adjudicate cases more efficiently than in the traditional court system.  Removing certain matters from the traditional docket should also lighten traditional judges’ dockets, quickening the pace of litigation in all state courts in Texas.

September 1, 2024

The Business Court has jurisdiction over certain specific categories of commercial cases, where the amount in controversy exceeds $5 million in some instances, and $10 million in others, and the case involves specific business-related issues, such as corporate governance and internal corporate affairs issues, securities litigation, breaches of fiduciary duties, actions arising out of the Texas Business Organizations Code, or commercial transactions in which the parties agreed the business court would have jurisdiction.

The Business Court also has jurisdiction over cases with publicly traded companies, regardless of the amount in controversy, that involve specific business-related issues, such as those outlined above.

Effective September 1, 2025: The recently enacted House Bill 40 expands the Business Court’s jurisdiction by (1) for the category of disputes requiring a $10 million threshold, lowering the threshold to $5 million; (2) providing jurisdiction of a broad range of intellectual property disputes; and (3) providing jurisdiction to enforce arbitration agreements or review arbitral awards for almost all cases where a claim would otherwise fall under the Business Court’s jurisdiction.

The Business Court law directs Governor Greg Abbott to appoint judges to each of the Business Court’s divisions.  Divisions encompassing more heavily populated areas (including Dallas, Houston, Austin, San Antonio, and Fort Worth) will have two business court judges.  The new law also provides for a new appellate court—the Fifteenth Court of Appeals—to hear appeals from the Business Court divisions.

The judges for the divisions encompassing the more heavily populated areas in Texas have been appointed and are listed here. In order to qualify as a business court judge, a person must have 10 or more years of experience in complex civil business litigation, business transaction law, serving as a judge in a Texas court with civil jurisdiction or any combination of that experience.

Judges will be appointed for two-year terms, and can be re-appointed multiple times.

As part of House Bill 19, the Texas Legislature also created the Court of Appeals for the Fifteenth Court of Appeals District (the “Fifteenth Court of Appeals”), a new intermediate court of appeals charged with direct appellate review of decisions from the Business Court.  The Fifteenth Court of Appeals is based in Austin, Texas and became effective on September 1, 2024.  Decisions of the Fifteenth Court of Appeals are subject, in turn, to discretionary appellate review by the Supreme Court of Texas.

House Bill 19 provides a mechanism that allows parties to lawsuits that were filed in a Texas district court or county court, but which also fall within the Business Court’s jurisdiction, to be “removed” from the district or county court and transferred to the division of the business court for the region of the state in which the case was pending.  Parties may file an agreed notice of removal at any time during the lawsuit to effectuate removal of the action.  If not agreed, however, a party seeking to remove a lawsuit to the business court must file a notice of removal no later than the 30th day after the later of the date the party requesting removal (1) was served in accordance with rules adopted by the Texas Supreme Court; or (2) discovered, or reasonably should have discovered, facts establishing the business court’s jurisdiction over the action.

Additionally, if there is an application for temporary injunction pending in the lawsuit on the date the party requesting removal of the action discovered, or reasonably should have discovered, facts establishing the business court’s jurisdiction over the action, then the deadline to file a notice of removal is the 30th day after the date the application is granted, denied, or denied as a matter of law.

Generally, a lawsuit commenced prior to September 1, 2024 cannot be transferred to the Business Court.

Effective September 1, 2025: A lawsuit commenced before September 1, 2024 that would otherwise fall within the jurisdiction of the Business Court may be transferred to and heard by the Business Court on an agreed motion of the parties and permission of the business court. Such a transfer will be subject to rules to be adopted by the Texas Supreme Court on the issue.

House Bill 19 specifies that the “[p]ractice, procedure, rules of evidence, issuance of process and writs, and all other matters pertaining to the conduct of trials, hearings, and other business in the business court are governed by the laws and rules prescribed for district courts,” unless the statute dictates otherwise.  House Bill 19 also preserves each parties right to a jury trial in actions pending in the Business Court “when required by the constitution.”

In addition, Rules 352 to 360 of the Texas Rules of Civil Procedure are specific rules applicable to the Business Court, and the recently-enacted House Bill 40 requires the Texas Supreme Court to adopt new rules governing determination of Business Court jurisdiction and transfer of cases filed before September 1, 2024. The Business Court has also adopted its own set of local rules, which can be found here.