In a move to streamline complex commercial and business litigation, Texas has introduced a new judicial experiment: specialized Business Courts. These Courts are governed by Chapter 25A of the Texas Government Code, which became effective on September 1, 2023, with jurisdiction over applicable actions commencing on or after September 1, 2024.
While the intention behind this development is to handle certain business disputes more efficiently, the early implementation has so far revealed significant uncertainty and ambiguity.
The experienced attorneys at Brousseau Naftis & Massingill, P.C. have represented clients in business matters for decades. For more information, contact us today for a no-obligation consultation.
What Are Texas Business Courts?
The Business Courts are a newly created branch of the judiciary meant to address specific types of business-related disputes. Their purpose is to provide expert judicial oversight in high-stakes commercial cases that may otherwise overwhelm the general jurisdiction of district and county courts that are already backlogged. However, like much of Texas’ rapidly evolving legal landscape, the rules governing these courts are still being tested.
As of now, five Business Courts have been established across major Texas cities: Dallas, Austin, San Antonio, Fort Worth, and Houston. These courts possess the same powers as district courts and have overlapping jurisdiction depending on the subject matter and the amount in controversy.
The Judges who preside over these Courts are appointed by the Governor, with the advice and consent of the Senate. A party to an action pending in these Courts has a right to a jury trial.
Scope and Jurisdiction
The Business Courts can hear disputes involving:
- The internal affairs of a business organization and its governing documents or governance.
- Actions against an organization or officers and owners of an organization for a claim under a state or federal securities or trade regulation law.
- Actions against an organization or its owner for breach of duty of loyalty or good faith.
- Cases involving publicly traded companies.
- Cases arising out of a transaction involving the payment or receipt of consideration valued at least $10 million.
- Actions arising out of a commercial transaction in which the parties contractually agreed the Business Courts have jurisdiction.
- Violations of the Texas Finance Code or Business & Commerce Code by business entities or their officers.
Notably, banks, credit unions, and savings and loan associations are largely excluded from the Business Court’s jurisdiction. Additionally, the amount in controversy must either exceed $5 million or $10 million, depending on the type of case, except if the action involves a publicly traded company. In the case of a publicly traded company, there is no required amount in controversy for a party to file a case in the Business Courts.
The Business Courts also have supplemental jurisdiction, meaning they can hear claims that are related to an action pending in another court provided that the claim is within the scope of the Business Courts’ jurisdiction — and only if both parties and the Business Court judge agree to it.
However, there are clear boundaries: Business Courts cannot hear cases involving medical liability, bodily injury or death, or legal malpractice claims.
These Courts also do not have jurisdiction over (1) civil actions brought by or against a governmental entity or foreclosure on real or personal property; or claims arising out of (2) covenants not to compete; (3) Chapter 15 of the Texas Business and Commerce Code, which governs Monopolies, Trusts, and Conspiracies in Restraint of Trade; (4) a violation of the Texas Deceptive Trade Practices Act; (5) the Estate Code, Family Code, or Insurance Code; (6) a Mechanic’s Lien as set forth in the Property Code, (7) a trust as set forth in Title 9 of the Property Code; (8) the production or sale of a farm product; (9) a consumer transaction arising out of a violation of federal or state law; or (10) duties and obligations under an insurance policy unless the Business Courts have supplemental jurisdiction based upon the agreement of the parties and Judge.
In other words, there are a lot of nuances to the jurisdiction of the Business Courts, and each case must be carefully examined before proceeding in these Courts.
Procedures for Removal and Remand
While a party can file an original claim in the Business Courts, Chapter 25A also allows for the removal of a case from a county or district court to a Business Court under specific circumstances. A party must request removal within 30 days of discovering — or reasonably discovering — facts establishing the Business Court’s jurisdiction. Because of this language, the timeline for removal can be murky, requiring a fact-intensive analysis with no clear-cut rules.
Alternatively, all parties involved in the case may agree to transfer the matter to the Business Court. If the Business Court later finds it does not have jurisdiction, however, the case must be remanded to the original court.
Operational Uncertainty and Local Rules
Although the courts are now operational in five major Texas cities, attorneys and litigants face ongoing challenges. The language in Chapter 25A has been described as ambiguous, leaving room for interpretation and confusion.
In an effort to bring some clarity to the Courts’ operations, the judges from the five Business Courts adopted Local Rules on March 1, 2025, intended to provide guidance while the legal community navigates this new terrain. Still, the absence of a dedicated courthouse for these Courts underscores their evolving nature.
Early Developments and Looking Ahead
Since the effective date of Chapter 25A, 24 opinions have been issued and are available for public review. These early decisions offer a glimpse into how the courts may approach jurisdictional questions and procedural issues, but a comprehensive framework is still developing.
As the Texas legal system continues to define and refine the role of Business Courts, lawyers, businesses, and business owners must remain vigilant and adaptable. Whether this bold judicial experiment will deliver on its promise of efficiency remains to be seen — but for now, practicing in these courts may feel a lot like the Wild West.
