NOVEMBER 2025 UPDATE – THE TEXAS BUSINESS COURT’S JURIDSDICTION HAS EXPANDED
In February 2025, we wrote about the new Texas Business Court and factors to consider in determining whether to file your next construction suit in Texas’ new court. Since then, the Texas Legislature has expanded the Texas Business Court’s jurisdiction, allowing more disputes to be filed. The following relate to construction disputes. See below.
First, the Texas Legislature has reduced the amount in controversy threshold from $10 million to $5 million and expanded the definition of a qualified transaction. Consequently, the new court has jurisdiction over cases where the amount in controversy exceeds $5 million (excluding interest, statutory damages, exemplary damages, penalties, attorney’s fees, and court costs) and the action arises out of a “qualified transaction.” Tex. Gov’t Code § 25A.004(d)(1). A “qualified transaction” now includes a transaction or a “series of related transactions” whereby a party is obligated to pay or is entitled to receive consideration with an aggregate value of at least $5 million. Tex. Gov’t Code § 25A.001(14). Thus, where a dispute arises out of a $5 million construction contract and the amount in controversy exceeds $5 million, the Texas Business Court will have jurisdiction to decide the dispute (absent a statutory exception).
Second, the Texas Business Court’s “opt-in” jurisdiction has been clarified. The court now has jurisdiction over actions arising out of a business, commercial, or investment contract or transaction where the parties agreed in the contract or a subsequent agreement that the business court has jurisdiction and the amount in controversy exceeds $5 million. Tex. Gov’t Code § 25A.004(d)(2). (Of note, the “opt-in” jurisdiction does not apply to insurance contracts.) The amount in controversy is the total amount of all joined parties’ claims. Tex. Gov’t Code § 25A.004(i). Thus, as a dispute heats up, you should consider whether the aggregate amount of the claims will exceed $5 million, and if so, whether the parties should enter an agreement that the Texas Business Court will have jurisdiction over any filed suit.
Third, parties can now agree to transfer older cases to the Texas Business Court. A case pending before September 1, 2024 that is within the jurisdiction of the Texas Business Court may be transferred to and heard by the Texas Business Court on an agreed motion and with permission of the court. See Tex. Gov’t Code § 25A.021; see Lone Star NGL Prod. Services LLC v. EagleClaw Midstream Ventures LLC, No. 15-25-00003-CV, 2025 WL 2857329, at *1 (Tex. App. [15th Dist.] Oct. 9, 2025). If you have an older case that cannot seem to be reached in district court, this may be a good option. There are ten active judges in the Texas Business Court and less than 150 active cases currently pending.
Fourth, Montgomery County (near Houston) has been added to the Eleventh Business Court Division located in Houston. Tex. Gov’t Code § 25A.003(m). This will allow Montgomery County disputes to be filed in the Texas Business Court. Notably, still only five of the eleven divisions are operational, namely the First, Third, Fourth, Eighth, and Eleventh Divisions, which generally cover Austin, Dallas, Fort Worth, Houston, and San Antonio. See https://www.txcourts.gov/media/1461210/bc_map_20250901.png
Original post, February 25, 2025.
The Texas Business Court is a statewide, specialized trial court created to resolve certain complex business disputes. Five of the planned eleven divisions began operating September 1, 2024, with two appointed judges in each division. Now that the Texas Business Court is up and running, before filing suit, you should consider whether the Texas Business Court may be the best court to adjudicate your next dispute.
JURISDICTION
The first question to ask is whether the Texas Business Court has jurisdiction. The Texas Business Court is a court of limited, concurrent jurisdiction. See Tex. Gov’t Code Ann. § 25A.004. There are two jurisdictional hooks that may be pertinent to a construction dispute. Id.
First, the Texas Business Court has jurisdiction over cases where the amount in controversy exceeds $10 million, excluding interest, statutory damages, exemplary damages, penalties, attorney’s fees, and court costs and the action arises out of a “qualified transaction.” A “qualified transaction” includes a transaction whereby a party pays or receives or is obligated to pay or is entitled to receive, consideration with an aggregate value of at least $10 million. Thus, where a dispute arises out of a $10 million construction contract and the amount in controversy exceeds $10 million, the Texas Business Court will have jurisdiction to decide the dispute, absent a statutory exception.
Second, the Texas Business Court generally has jurisdiction over cases where (1) the action arises out of a contract or commercial transaction in which the parties to the contract or transaction agreed in the contract or a subsequent agreement that the business court has jurisdiction and (2) the amount in controversy exceeds $10 million, excluding interest, statutory damages, exemplary damages, penalties, attorney’s fees, and court costs. Thus, where the parties agreed that the business court has jurisdiction and the amount in controversy exceeds $10 million, the Texas Business Court will have jurisdiction to decide the dispute, absent a statutory exception.
Notable exceptions. The Texas Business Court does not have jurisdiction over an action brought by or against a governmental entity or to foreclose on a lien on real or personal property unless the claim falls within the business court’s supplemental jurisdiction.
VENUE
If the Texas Business Court has jurisdiction, the next question is venue. The party filing the action must plead facts to establish venue in a county in an operating division of the business court. See Tex. Gov’t Code Ann. § 25A.006.
Importantly, only five of the eleven divisions are operational, namely the First, Third, Fourth, Eighth, and Eleventh Divisions, which cover 80 counties in Texas. Generally speaking, the five operating divisions cover the Austin, Dallas, Fort Worth, Houston, and San Antonio areas. See Texas Business Court Divisions by County. If you cannot establish venue in one of the 80 counties serviced by an operating business court, the suit should not be filed in business court.
PRACTICAL CONSIDERATIONS
By rule, the Texas Business Court is dedicated to the fair, efficient, and timely resolution of business disputes. See BCLR 1. A key advantage to filing in the Texas Business Court is the lack of backlog. Since the business court began operating in September 2024, less than 100 cases have been filed. In February 2025, less than 60 of those cases remained pending in the business court. Those cases are being handled by 10 judges, affording each judge more time to focus on the complexities of each case. This smaller caseload per judge is another key advantage to filing in the business court.
Another advantage is that the business court judge must issue a written opinion in connection with dispositive rulings if requested. See Tex. R. Civ. P. 360(a). Thus, gone are summary dismissals of claims. Too, the judge must issue written opinions on issues important to the jurisprudence of the state. Id.
Further, with only two judges per division, you can better evaluate before filing how the judge may view your case.
The Texas Business Court has a set of Local Rules that supplement the Texas Rules of Civil Procedure. These rules will aid in streamlining the resolution of disputes. See Local Rules of the Business Court of Texas.
Another relevant consideration is that judges are appointed by the Texas Governor, with the advice and consent of the senate, for terms of two years, beginning September 1 of every even-numbered year. See Tex. Gov’t Code Ann. § 25A.009. Thereafter, judges can be reappointed. Id.
Finally, the new Fifteenth Court of Appeals has jurisdiction over appeals from the business court. See Tex. Gov’t Code Ann. § 25A.007. The Fifteenth Court of Appeals is composed of a chief judge and two justices, who were appointed by the Texas Governor. The judicial positions will appear on the November 2026 general-election ballot. See In re Dallas Cnty., 697 S.W.3d 142, 164 (Tex. 2024)
REMOVAL
If you find yourself defending a new construction case, you should consider whether you should remove the suit to the Texas Business Court. A party to an action filed in a district court or county court at law that is within the jurisdiction of the business court may remove the action to the business court. See Tex. Gov’t Code Ann. § 25A.006. A party may file an agreed notice of removal at any time during the pendency of the action. Id. If there is no agreement, there are certain 30-day deadlines to removal that may apply. Id.
TAKEAWAYS
The new Texas Business Court is open for business and may be the right court to decide your next construction dispute. To pave the way for the business court, when drafting your next construction contract, consider whether to include an agreement that the Texas Business Court has jurisdiction to decide any disputes arising out of the contract that exceed $10 million.
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