Texas Government Code Amendments Expand Texas Business Court System – Corporate Governance

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.