Welcome to David Siegel’s and Charles Peckham’s blog series on the new Texas Business Courts. We hope to make this an informative series of blogs that starts you on your way to understanding the new court system. As a significant development in the Texas legal landscape, these specialized courts are being established to streamline complex business litigation. Over the next six posts, we will delve into the intricacies of these courts, providing you with valuable insights and practical information.
Our series will cover:
- Operations Date of the Courts, Jurisdiction, Venue, Structure of the Courts, and Present Appointees. (this post)
- Filing Cases in the Business Courts, Removal and Remand Procedures
- Discovery Process and Pre-Trial Procedures and Requirement of Written Orders
- Trial Procedures and Jury Process
- Appealing Business Court Judgments
- Mediation in Business Courts
- Growth of the Courts and Districts to be Added in Future Years
In this inaugural post, we will introduce you to the Texas Business Courts, their operational date, jurisdiction, and structure.
Operational Date:
The Texas Business Courts officially began operations on September 1, 2024, marking a new era in business litigation in the state.
Applicable Cases: Generally, cases filed on or after September 1, 2024, that meet the jurisdictional requirements are eligible to be heard in the Business Courts.
Transfer of Existing Cases: Some cases filed before September 1, 2024, may be eligible for transfer to the Business Courts.
Cases Heard:
Generally, the Texas Business Court has (a) concurrent jurisdiction with district courts with respect to specific types of actions in which the amount in controversy exceeds $5 million or $10 million, as applicable, and (b) supplemental jurisdiction over certain claims related to a case or controversy within the Business Court’s jurisdiction. These are set out more specifically as follows:
Amount in Controversy over $5 Million: These courts have concurrent legal and equitable jurisdiction with the District Courts, and are designed to handle complex business disputes, including matters in controversy over $5 Million for closely held companies or individuals that are related to:
- Corporate governance or internal affairs;
- Derivative actions;
- Securities or trade regulation actions against an organization, controlling person of an organization, underwriter, or auditor of an organization ;
- An action by an organization or its owner against another owner or management that alleges acts or omissions of that person in their official capacity;
- An action alleging that a person in their official capacity breached a duty to the owner or organization such as fiduciary duties of loyalty or good faith;
- An action seeking to hold a person in management or ownership liable for the acts of the organization;
- An action arising out of the Business Organizations Code
This jurisdiction may include suits related to trade secrets and certain intellectual property disputes, non-compete and non-solicitation agreements, business torts, complex contract disputes, and business dissolutions, among others.
No Required Amount in Controversy: If any of the above matters involve a publicly-traded company, then there is no minimum amount in controversy requirement.
Amount in Controversy over $10 Million:
When the amount in controversy is over $10 Million, the business courts also have civil jurisdiction in:
- An action arising out of a qualified transaction (those with an aggregate value of at least $10 million or involving loans or advances, but excluding formal loans or advances from bank, credit unions, or savings and loans);
- An action that arises out of a contract or commercial transaction where the parties agreed to the jurisdiction of these courts (except in insurance contractual matters); and
- An action that arises out of a violation of the Finance Code or Business & Commerce Code a person acting on behalf of an organization other than a bank, credit union, or savings and loan.
Supplemental Jurisdiction:
Other than by supplemental jurisdiction, the Business Courts cannot hear cases in civil actions brought by or against a governmental entity; involving foreclosure of liens on real or personal property; statutory-based probate, family or insurance matters; farm products; consumer transactions; or insurance coverage matters.
No Jurisdiction:
Even if there is supplemental jurisdiction, the business courts may not hear medical liability, legal malpractice, or personal injury and death cases.
Structure and Appointed Judges:
The Texas Business Courts are structured into 11 districts, five with two judges each and six with a single judge each. Additionally, a 15th Court of Appeals has been established with a five-judge panel (on chief and four associate justices), although only three judges have been appointed to date. The district judges will be initially appointed by the governor to two-year terms subject to re-appointment. The appellate judges are appointed through the end of 2026 subject to statewide election. Appeals from the 15th Court of Appeals go to the Texas Supreme Court.
Judges of these courts must be:
- 35 years of age
- a US Citizen
- a resident of a county for five years in the division to which the judge is appointed
- be a licensed attorney with 10 or more years’ experience in complex business litigation, business transaction law, or in serving as a civil court in Texas.
Counties in Which the Business Courts Preside:
At present, only 80 of Texas’ 254 counties will have operative courts. Each Business Court Division corresponds to the Administrative Judicial Division presently established under Texas Government Code §74.042 as follows:
The First Business Court Division is composed of the counties of Collin, Dallas, Ellis, Fannin, Grayson, Kaufman, and Rockwall.
The Second Business Court Division is composed of the counties of Angelina, Bastrop, Brazos, Burleson, Chambers, Grimes, Hardin, Jasper, Jefferson, Lee, Liberty, Madison, Montgomery, Newton, Orange, Polk, San Jacinto, Trinity, Tyler, Walker, Waller, and Washington.
The Third Business Court Division is composed of the counties of Austin, Bell, Blanco, Bosque, Burnet, Caldwell, Colorado, Comal, Comanche, Coryell, Falls, Fayette, Gonzales, Guadalupe, Hamilton, Hays, Hill, Lampasas, Lavaca, Llano, McLennan, Milam, Navarro, Robertson, San Saba, Travis, and Williamson.
The Fourth Business Court Division is composed of the counties of Aransas, Atascosa, Bee, Bexar, Calhoun, DeWitt, Dimmit, Frio, Goliad, Jackson, Karnes, LaSalle, Live Oak, Maverick, McMullen, Refugio, San Patricio, Victoria, Webb, Wilson, Zapata, and Zavala.
The Fifth Business Court Division is composed of the counties of Brooks, Cameron, Duval, Hidalgo, Jim Hogg, Jim Wells, Kenedy, Kleberg, Nueces, Starr, and Willacy.
The Sixth Business Court Division is composed of the counties of Bandera, Brewster, Crockett, Culberson, Edwards, El Paso, Gillespie, Hudspeth, Jeff Davis, Kendall, Kerr, Kimble, Kinney, Mason, McCulloch, Medina, Menard, Pecos, Presidio, Reagan, Real, Sutton, Terrell, Upton, Uvalde, and Val Verde.
The Seventh Business Court Division is composed of the counties of Andrews, Borden, Brown, Callahan, Coke, Coleman, Concho, Crane, Dawson, Ector, Fisher, Gaines, Garza, Glasscock, Haskell, Howard, Irion, Jones, Kent, Loving, Lynn, Martin, Midland, Mills, Mitchell, Nolan, Reeves, Runnels, Schleicher, Scurry, Shackelford, Sterling, Stonewall, Taylor, Throckmorton, Tom Green, Ward, and Winkler.
The Eighth Business Court Division is composed of the counties of Archer, Clay, Cooke, Denton, Eastland, Erath, Hood, Jack, Johnson, Montague, Palo Pinto, Parker, Somervell, Stephens, Tarrant, Wichita, Wise, and Young.
The Ninth Business Court Division is composed of the counties of Armstrong, Bailey, Baylor, Briscoe, Carson, Castro, Childress, Cochran, Collingsworth, Cottle, Crosby, Dallam, Deaf Smith, Dickens, Donley, Floyd, Foard, Gray, Hale, Hall, Hansford, Hardeman, Hartley, Hemphill, Hockley, Hutchinson, King, Knox, Lamb, Lipscomb, Lubbock, Moore, Motley, Ochiltree, Oldham, Parmer, Potter, Randall, Roberts, Sherman, Swisher, Terry, Wheeler, Wilbarger, and Yoakum.
The Tenth Business Court Division is composed of the counties of Anderson, Bowie, Camp, Cass, Cherokee, Delta, Franklin, Freestone, Gregg, Harrison, Henderson, Hopkins, Houston, Hunt, Lamar, Leon, Limestone, Marion, Morris, Nacogdoches, Panola, Rains, Red River, Rusk, Sabine, San Augustine, Shelby, Smith, Titus, Upshur, Van Zandt, and Wood.
The Eleventh Business Court Division is composed of the counties of Brazoria, Fort Bend, Galveston, Harris, Matagorda, and Wharton.
However, the Business Courts for the following Business Court Divisions are abolished effective September 1, 2026 if the Legislature does not fund them through additional appropriation: Second, Fifth, Sixth, Seventh, Ninth, and Tenth. Notably, no judges have been appointed as yet for those divisions.
Present Judicial Appointments are:
First Business Court Division (Dallas): Andrea Bouressa and William “Bill” Whitehill
Third Business Court Division (Austin): Melissa Andrews and Patrick K. Sweeten
Fourth Business Court Division (San Antonio): Marialyn Barnard and Stacy Sharp
Eighth Business Court Division (Fort Worth): Jerry Bullard and Brian Stagner
Eleventh Business Court Division (Houston): Sofia Adrogue and Grant Dorfman
15th Court of Appeals (Austin). Scott A. Brister (Chief), Scott Field, and April L. Farris
There have been no appointments for the remaining districts, with those to come in 2026 if they are funded. There also has been no provision for physical courtrooms for where these courts will preside, and it is expected that they will ‘borrow’ the court rooms of other courts to be able to operate.
In our next post, we will explore the procedures for filing a case in the Business Courts and the process for removing cases from other courts to these specialized venues.
Stay tuned for more insights into the Texas Business Courts!