A Closer Look at the New Texas Business Courts: Key Developments and Insights
This article has been published in the PLI Chronicle: Insights and Perspectives for the Legal Community
This article has been published in the PLI Chronicle: Insights and Perspectives for the Legal Community
On September 1, 2024, a notable change occurred in the Texas legal landscape with the official launch of the new Texas Business Courts. Created through House Bill 19, which was signed into law on June 9, 2023, these 11 civil courts aim to provide a specialized venue for trials, specifically those resolving significant, complex commercial disputes. They also seek to streamline cases away from the burdened district courts.
Here’s a detailed look at the key features and important updates regarding this noteworthy new addition to Texas’ judicial system.
Structure
As of September, five of the 11 planned divisions of the Texas Business Courts have begun accepting cases. The remaining six divisions have been deferred by the legislature and are expected to open on September 1, 2026, unless otherwise determined in the legislative session. The five open divisions are strategically located in larger metropolitan areas: Dallas, Austin, San Antonio, Fort Worth, and Houston. Each of the five open divisions has two judges.
Since their September opening, several original lawsuits have been filed in the Texas Business Courts, including three breach-of-contract cases, a construction dispute, and another alleging fraudulent transfer. Several cases have also been noticed for removal.
Creation and Purpose
The Texas Business Courts were created to handle high-stakes cases involving significant business disputes, including corporate governance, securities, fiduciary duties, and commercial matters. Their establishment aims to expedite the resolution of these complex cases and bring about more predictability and expertise in commercial litigation. By focusing exclusively on high-stakes business matters, the courts separate these cases from the general jurisdiction of the Texas district courts, creating an environment focused on the unique needs of large-scale commercial disputes. The courts’ specialized focus ensures that judges with high commercial litigation experience preside over cases, bringing efficiency to complex legal matters. For cases to be eligible, the monetary threshold generally must be a minimum of $5 million or $10 million, depending on the nature of the claim and the parties involved. This financial requirement ensures that the courts are reserved for major commercial disputes.
This article has been published in the PLI Chronicle: Insights and Perspectives for the Legal Community.
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This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.