Litigation costs businesses millions of dollars annually. To address complex business litigation with greater efficiency and consistency, thirty states have created specialized courts. With the passage of House Bill 19, Texas now has a specialized business court that opened its doors in 2024.
The Texas business court is narrowly tailored to reach disputes between businesses, or among businesses and their owners, directors and management. The court’s jurisdiction relates to matters such as breach of contract, breach of fiduciary duty, governance and control disputes, and violations of state and federal securities and trade regulation laws.
The minimum amount in controversy for most actions before the business court is set at either $5 million or $10 million depending on the nature of the specific claims asserted. The amount in controversy requirements do not apply to a limited set of actions - those seeking only injunctive or declaratory relief and cases addressing claims of breach of fiduciary duty, governance and control disputes and securities and trade regulation litigation if a publicly traded company is a party.
While most complex business cases are resolved by settlement, the rare jury trial will be heard in the county chosen by the plaintiff where proper venue would otherwise exist for that case. The business court judge is required to issue an order early in a proceeding confirming the county where venue will exist for any jury trial.
The Texas business court will improve the efficiency, consistency and predictability of business litigation. This is achieved by allowing judges with the required experience and career interest to focus on complex business litigation exclusively.
These cases will no longer compete with and delay the variety of civil and criminal matters that currently crowd the dockets of state district courts. At the same time, most litigation impacting businesses, including larger public companies, will continue in state district courts due to the business court's limited jurisdiction.
Should you have any questions or concerns about Texas House Bill 19, please reach out to Derek Saunders, Keith Strahan, or Richard Armstrong of our firm, shown here: https://lfbrown.law/our-team
