Following the 2025 Texas Legislature’s regular session, litigators and corporate counsel should note numerous changes impacting the Texas Business Courts…
United States
Texas
Corporate/Commercial Law
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Following the 2025 Texas Legislature’s regular session,
litigators and corporate counsel should note numerous changes
impacting the Texas Business Courts, including that Chapter 25A of
the Texas Government Code has been amended to expand the reach and
impact of the Texas Business Court system. This GT Alert describes
some of the key amendments and changes.
- The amount in controversy requirement for a “Qualified
Transaction” has been reduced from an aggregate value
of $10 million to an aggregate value of $5 million. This
means that a claim involving a series of transactions with an
aggregate value of $5 million now qualifies for the Texas Business
Court, likely increasing the number of cases that qualify. A quick
review of the first 10 months of Texas Business Court docket
activity demonstrates that filings remain limited, in part, because
of the previous $10 million jurisdictional limit. - “Qualified Transaction” now means “a
transaction, or series of related transactions…”
This change intends to allow more litigants to stack transactions
(or claims) to reach the amount in controversy requirements needed
to qualify for filing in, or removal to, the Texas Business Court.
For example, if a dispute involves a series of loans, none of which
exceed $5 million on their own, the entire series of loans may be
eligible for suit in Texas Business Court if the loans collectively
exceed $5 million. - All 11 Divisions of the Texas Business Court have now been
created and funded. Additionally, Montgomery County was officially
moved from the 2nd Division (Beaumont) to the 11th Division
(Houston). As these new Texas Business Court divisions open
for business, litigants—including the many companies that
have relocated from downtown Houston to The Woodlands in recent
years—should keep in mind that the Texas Business Courts have
already normalized and accepted docket equalization. This means,
for example, that if your case is filed and assigned to the 11th
Division (Houston), there are times that your case may be overseen
and administered by a Texas Business Court judge sitting in a
different division with a lighter docket and case load. In fact,
the Texas Business Court docket in Houston continues to outpace by
a significant margin all other Texas Business Court divisions in
terms of number of cases filed. - The Texas Business Court’s “Powers and
Jurisdiction” were expressly stipulated to include “civil
jurisdiction concurrent with district courts in the following
actions, including actions in which a district court has
exclusive jurisdiction, where the amount in controversy
exceeds $5 million” (excluding interest, statutory damages,
exemplary damages, penalties, attorney’s fees, and court
costs): derivative actions, actions involving corporate governance
and corporate documents, state or federal securities law, actions
against business owners in their official capacity, fiduciary duty
claims, and claims arising out of the Texas Business Corporations
Code. This addition to the statute confirms that the Texas Business
Courts have power and jurisdiction in cases where other Texas codes
and/or statutes may indicate that Texas district courts have proper
jurisdiction. It was thus easier to make this change in Chapter 25A
of the Government Code as opposed to all the other necessary Texas
statutes. This change may help prevent the initial gating disputes
that have surrounded some business court filings during the past 10
months. - The Texas Business Courts now expressly have (subject to the $5
million amount in controversy requirement) concurrent jurisdiction
with Texas district courts in matters involving certain
intellectual property claims, including software, trade
secrets, the Texas Uniform Trade Secrets Act (Chapter 134A of the
Texas Civil Practice & Remedies Code) and enforcement of
arbitration agreements/awards for cases involving derivative
actions, actions involving corporate governance and corporate
documents, state or federal securities law, actions against owners
in their official capacity, fiduciary duty claims, and claims
arising out of the Business Corporations Code (or publicly traded
companies not subject to the $5 million requirement). In other
words, the Texas Business Courts are open for business for claims
involving corporate affairs and corporate governance, thus sending
a signal to companies in other states that might be looking to
relocate to Texas. - “Consumer Transactions,” as that term is
defined by Section 601.001 of the Texas Business & Commerce
Code, are now expressly excluded from the jurisdiction of the
Texas Business Courts. An exception exists for door-to-doors
sales, but the likelihood of these transactions otherwise
qualifying for Texas Business Court jurisdiction is low. - The Supreme Court of Texas now has omnibus rulemaking
authority over the Texas Business Court. The Supreme Court of
Texas “by rule shall establish procedures for prompt,
efficient, and final determination of business court jurisdiction
on the filing of an action in the business court” and it must
consider a list of other goals and standards. Thus, litigants may
soon learn additional local rules and/or procedural guidelines for
practicing before the Texas Business Court. This may include
expanded use of remote and virtual hearings, movement of cases
between district courts and the Texas Business Court, use of Texas
Business Court precedent and case law as it becomes developed and
is tracked across Texas, and appellate rules relating to issues and
final judgments, among others. At the time of this writing, Texas
Business Court rules committees (official and unofficial) are
beginning to provide guidance and recommendations. - Texas Business Court judges will continue to be appointed for a
term of two years, and they may be reappointed by the governor on
the advice and consent of the Texas Senate. The term of office did
not change, despite some legislators attempting to extend it. - Texas Business Court judges can now serve as visiting judges
for cases in district courts and county courts, subject to
objection by litigants under the established rules in Texas for
objecting to visiting judges. - The Texas Business Court judicial chambers are now required to
be “in the county with the largest population within the
geographic boundaries of the division to which the judge is
appointed, or in a county adjacent to that county and within the
geographic boundaries of the division, as the judge
selects[.]” Texas Business Court judges can petition the Chief
Justice of the Texas Supreme Court for an exception to this rule.
This means that Texas Business Court judges appointed and living in
Plano, Round Rock, and The Woodlands do not need to commute to
Dallas, Austin, and Houston. However, lawyers living in Boerne are
in Division Six, which will report to El Paso, not Division Four,
which will report to San Antonio. As the population of San Antonio
expands west into Kendall County, companies and lawyers there may
seek the same carve-out and relocation that Montgomery County
received. - Actions commenced before Sept. 1, 2024, can now expressly be
moved to the Texas Business Court if (i) all parties agree, (ii)
the case is within the jurisdiction of the Texas Business Court,
and (iii) they receive permission of the Texas Business Court upon
rules adopted by the Texas Supreme Court. This rule prevents
parties from having to enter into Rule 11 Agreements to nonsuit
cases and then refile the case in the Texas Business Court.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.