Following the 2025 Texas Legislature’s regular session, litigators and corporate counsel should note numerous changes impacting the Texas Business Courts, including that Chapter 25A of the Texas Government Code has been amended to expand the reach and impact of the Texas Business Court system. This GT Alert describes some of the key amendments and changes.
- The amount in controversy requirement for a “Qualified Transaction” has been reduced from an aggregate value of $10 million to an aggregate value of $5 million. This means that a claim involving a series of transactions with an aggregate value of $5 million now qualifies for the Texas Business Court, likely increasing the number of cases that qualify. A quick review of the first 10 months of Texas Business Court docket activity demonstrates that filings remain limited, in part, because of the previous $10 million jurisdictional limit.
- “Qualified Transaction” now means “a transaction, or series of related transactions…” This change intends to allow more litigants to stack transactions (or claims) to reach the amount in controversy requirements needed to qualify for filing in, or removal to, the Texas Business Court. For example, if a dispute involves a series of loans, none of which exceed $5 million on their own, the entire series of loans may be eligible for suit in Texas Business Court if the loans collectively exceed $5 million.
- All 11 Divisions of the Texas Business Court have now been created and funded. Additionally, Montgomery County was officially moved from the 2nd Division (Beaumont) to the 11th Division (Houston). As these new Texas Business Court divisions open for business, litigants—including the many companies that have relocated from downtown Houston to The Woodlands in recent years—should keep in mind that the Texas Business Courts have already normalized and accepted docket equalization. This means, for example, that if your case is filed and assigned to the 11th Division (Houston), there are times that your case may be overseen and administered by a Texas Business Court judge sitting in a different division with a lighter docket and case load. In fact, the Texas Business Court docket in Houston continues to outpace by a significant margin all other Texas Business Court divisions in terms of number of cases filed.
- The Texas Business Court’s “Powers and Jurisdiction” were expressly stipulated to include “civil jurisdiction concurrent with district courts in the following actions, including actions in which a district court has exclusive jurisdiction, where the amount in controversy exceeds $5 million” (excluding interest, statutory damages, exemplary damages, penalties, attorney’s fees, and court costs): derivative actions, actions involving corporate governance and corporate documents, state or federal securities law, actions against business owners in their official capacity, fiduciary duty claims, and claims arising out of the Texas Business Corporations Code. This addition to the statute confirms that the Texas Business Courts have power and jurisdiction in cases where other Texas codes and/or statutes may indicate that Texas district courts have proper jurisdiction. It was thus easier to make this change in Chapter 25A of the Government Code as opposed to all the other necessary Texas statutes. This change may help prevent the initial gating disputes that have surrounded some business court filings during the past 10 months.
- The Texas Business Courts now expressly have (subject to the $5 million amount in controversy requirement) concurrent jurisdiction with Texas district courts in matters involving certain intellectual property claims, including software, trade secrets, the Texas Uniform Trade Secrets Act (Chapter 134A of the Texas Civil Practice & Remedies Code) and enforcement of arbitration agreements/awards for cases involving derivative actions, actions involving corporate governance and corporate documents, state or federal securities law, actions against owners in their official capacity, fiduciary duty claims, and claims arising out of the Business Corporations Code (or publicly traded companies not subject to the $5 million requirement). In other words, the Texas Business Courts are open for business for claims involving corporate affairs and corporate governance, thus sending a signal to companies in other states that might be looking to relocate to Texas.
- “Consumer Transactions,” as that term is defined by Section 601.001 of the Texas Business & Commerce Code, are now expressly excluded from the jurisdiction of the Texas Business Courts. An exception exists for door-to-doors sales, but the likelihood of these transactions otherwise qualifying for Texas Business Court jurisdiction is low.
- The Supreme Court of Texas now has omnibus rulemaking authority over the Texas Business Court. The Supreme Court of Texas “by rule shall establish procedures for prompt, efficient, and final determination of business court jurisdiction on the filing of an action in the business court” and it must consider a list of other goals and standards. Thus, litigants may soon learn additional local rules and/or procedural guidelines for practicing before the Texas Business Court. This may include expanded use of remote and virtual hearings, movement of cases between district courts and the Texas Business Court, use of Texas Business Court precedent and case law as it becomes developed and is tracked across Texas, and appellate rules relating to issues and final judgments, among others. At the time of this writing, Texas Business Court rules committees (official and unofficial) are beginning to provide guidance and recommendations.
- Texas Business Court judges will continue to be appointed for a term of two years, and they may be reappointed by the governor on the advice and consent of the Texas Senate. The term of office did not change, despite some legislators attempting to extend it.
- Texas Business Court judges can now serve as visiting judges for cases in district courts and county courts, subject to objection by litigants under the established rules in Texas for objecting to visiting judges.
- The Texas Business Court judicial chambers are now required to be “in the county with the largest population within the geographic boundaries of the division to which the judge is appointed, or in a county adjacent to that county and within the geographic boundaries of the division, as the judge selects[.]” Texas Business Court judges can petition the Chief Justice of the Texas Supreme Court for an exception to this rule. This means that Texas Business Court judges appointed and living in Plano, Round Rock, and The Woodlands do not need to commute to Dallas, Austin, and Houston. However, lawyers living in Boerne are in Division Six, which will report to El Paso, not Division Four, which will report to San Antonio. As the population of San Antonio expands west into Kendall County, companies and lawyers there may seek the same carve-out and relocation that Montgomery County received.
- Actions commenced before Sept. 1, 2024, can now expressly be moved to the Texas Business Court if (i) all parties agree, (ii) the case is within the jurisdiction of the Texas Business Court, and (iii) they receive permission of the Texas Business Court upon rules adopted by the Texas Supreme Court. This rule prevents parties from having to enter into Rule 11 Agreements to nonsuit cases and then refile the case in the Texas Business Court.