Texas Business Courts
In Texas, lawmakers are divided over the future of business courts, with plans to either delay new court activations or expedite their launch. The specialized courts, established to handle high-value commercial disputes, are essential for the business community. Recent legislative discussions include proposals to adjust minimum lawsuit amounts and extend judges’ terms, indicating significant changes ahead. As the debate heats up, the implications for Texas businesses remain crucial.
In the vibrant business hub of Texas, a heated discussion is brewing in the Legislature about the future of its business courts. Recently filed bills showcase a tug-of-war between various lawmakers over whether to speed up the launch of new courts or to take a step back. With unique opinions coming from both sides, what does it all mean for the business community?
These specialized courts for handling significant commercial disputes began welcoming cases on September 1, 2024. Designed to expedite resolutions and provide higher efficiency, the Texas Business Courts boast a framework of eleven divisions. Currently, five are up and running in bustling urban centers like Dallas, Austin, San Antonio, Fort Worth, and Houston. Each operational division is equipped with two judges, specially appointed for their expertise in complex commercial litigation.
The crux of the matter lies in a bill put forth by Senator Bryan Hughes (R) that seeks to push back the activation of six new unfunded courts from 2026 to a later date in 2028. On the flip side, Rep. Brooks Landgraf (R) is championing the cause for these courts to begin functioning as early as January 2025, reflecting a strong desire for immediate action.
These courts are essential for businesses engaged in high-stakes disputes. They handle cases with a minimum amount in controversy of at least $5 million, specifically related to corporate governance or derivative proceedings. Some cases have even higher thresholds, reaching upwards of $10 million, based on the complexities involved or specific clauses in contracts. Essentially, the goal is to establish a reliable and predictable environment for commercial litigations.
To further underscore their relevance, a recent ruling from the Texas Business Court elaborated on its jurisdiction regarding declaratory and injunctive relief. This ruling clarified that when calculating the amount in controversy, it would include the entire value of rights involved, not just the monetary demand. This is an important distinction as it sets a precedent for how future cases will be managed.
As of early 2025, the business court has accepted a total of 53 filed cases, with eleven already closed shortly after their launch. Interestingly, some older cases filed before the opening of the business courts are being contested regarding their eligibility for transfer to the newly established court system. Local rules now mandate detailed motion practices and corporate disclosures, which adds another layer of complexity to the process.
As legislators gather to debate in 2025, there are discussions about possibly lowering the minimum amount required for lawsuits in these business courts. Furthermore, talks are heating up regarding extending the judges’ terms from the current two years to potentially six years. These changes could significantly reshape how business litigation unfolds in the state.
With both sides passionately advocating for their views, the business community is eagerly watching how these proposals will unfold. The outcome not only impacts the courts themselves but reverberates throughout the entire landscape of Texas business. As we look towards the future, one thing is for certain: the Lone Star State’s business courts are here to stay, and they promise to bring a new level of efficiency and expertise to commercial litigation.
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