Texas Business Courts Task Force

A specialized and multi-disciplinary task force focused on the new Texas Business Court and Fifteenth Court of Appeals

The Texas Business Court began operations on Sept. 1, 2024.

While the Delaware Chancery Court is a court of equity focusing primarily on corporate governance issues, the Texas Business Courts have a broader jurisdiction covering a range of commercial disputes, including the option for jury trials. Perhaps most significantly, the Delaware Chancery Court has well-established case law and precedent, providing a level of predictability that the newly formed Texas Business Courts will take time to develop. The structure and appeals processes also differ, with Texas adopting a more decentralized approach across multiple divisions and a separate appellate court, while Delaware maintains a centralized court with direct appeals to its Supreme Court.

Under HB 19, which created the court system, the Texas governor appoints the judges in the system. They must be attorneys with 10 or more years of experience in any combination of the following: (a) practicing complex civil business litigation; (b) practicing business transactional law; or (c) serving as a civil judge. Judges are appointed for two-year terms and can be reappointed multiple times. Governor Greg Abbott’s first appointments are:

• First Division (Dallas):  Andrea Bouressa and William "Bill" Whitehill.
• Third Division (Austin): Melissa Andrews and Patrick Sweeten.
• Fourth Division (San Antonio): Marialyn Barnard and Stacy Sharp.
• Eighth Division (Fort Worth): Jerry Bullard and Brian Stagner.
• Eleventh Division (Houston): Sofia Adrogué and Grant Dorfman.
• Fifteenth Appellate Court: Scott A. Brister (Chief Justice), Scott K. Field (Place 1) and April L. Farris (Place 2).

Texas Business Courts will operate from multiple locations across the state. The business court is divided into 11 divisions, each aligning with an existing Administrative Judicial Region in Texas. Each business court judge will maintain chambers in a county of their choice within the geographical boundaries of the division to which they are appointed. Judges can hold court in any courtroom within their division's geographical boundaries. The clerk's office will be in Travis County facilities provided by the state.

The rules for the Texas Business Courts are set by the laws and rules prescribed for district courts, as specified by HB 19. These rules govern practice, procedure, rules of evidence, issuance of process and writs, and all other matters pertaining to the conduct of trials, hearings and other issues in the business court. The Texas Supreme Court approved preliminary procedural rules for the new court earlier this year, which were open for public comment until May 1, 2024. The final rules are expected to take effect on September 1, 2024.

Recent updates include Rule 354, which addresses jurisdiction and venue establishment, and Rule 355, which outlines the procedure for removing cases from general jurisdiction trial courts to the business court. Rule 356 allows general jurisdiction judges to seek transfer of cases to the business court, and Rule 357 suspends statutes of limitations for up to 60 days when claims are dismissed and refiled.

The Texas Supreme Court unanimously rejected a constitutional challenge to the new Fifteenth Court of Appeals. Dallas County filed the challenge to prevent its pending lawsuit from being transferred to the new court. The Supreme Court rejected the argument that the new court's statewide jurisdiction over certain cases involving the state or state officials violates the constitutional requirement for appellate courts to be divided into geographic districts.

Texas business courts handle two main types of civil cases. The first involves business disputes exceeding $5 million (or any amount for publicly traded companies). This includes disagreements over company structure, management duties, securities and matters governed by the Business Organizations Code. Examples are business breakups, claims of misconduct by company leaders and fights for control of a business. The second category concerns cases exceeding $10 million related to specific situations. These include large financial transactions, disputes where parties agree beforehand to use the business court and certain violations of state business laws.

Decisions from the Texas Business Court can be appealed to the newly created Fifteenth Court of Appeals, which will have exclusive jurisdiction over these appeals starting Sept. 1, 2024. This new appellate court, based in Austin, will have statewide jurisdiction and consist of justices appointed by the Governor, who must then stand for statewide election to retain their seats.