By JD Reed –
Texas is Popular
If it wasn’t already apparent, large corporate businesses are flocking to Texas. Texas district and county courts have become clogged with personal injury and low-stakes lawsuits. As a result, judges in county and district courts are bombarded with personal injury and similar cases, and thus, sometimes do not have enough time to give large commercial litigation cases the time and attention they need.
Popularity has its Problems – Crowded Courts
Thus, because Texas has lured so many businesses to relocate to this State, the Texas Legislature passed House Bill 19, which creates specific courts (similar to the Delaware Court of Chancery) designated for the sole purpose of litigating business disputes worth more than $5 million. House Bill 19 takes effect on September 1, 2023, but will only apply to lawsuits filed after September 1, 2024. House Bill 19 created 11 judicial district business court divisions. However, only 5 business court divisions have been approved and funded for their initial test run.
Solution: Test Run of New Business Courts
The first 5 business court divisions will be located in Texas’ largest cities – Dallas, Houston, San Antonio, Austin and Fort Worth – with each such business court division stretching over multiple counties. Additionally, appeals will be handled by a specialized Court of Appeals (the 15th Court of Appeals). The remaining 6 Business Courts are slated for future funding if the initial 5 business courts are successful, and the Texas Legislature approves funding for those additional business courts.
Governor Abbott will initially appoint judges to the Business Courts. These judges must have at least 10 years of experience in complex business litigation or business transaction law, and/or must have prior experience serving as a judge in these practice areas. The Business Courts are intended to handle specific cases, such as derivative proceedings, breach of fiduciary duty claims, corporate governance, security violation claims, and corporate disputes generally.
Added Benefit: Clearer Rulings on Complex Business Issues
Ultimately, these future Business Courts will lead to more efficient resolutions of complex business litigation, clearer rulings on complex business issues, more homogeneous application of said law, and hopefully more favorable rulings for clients. As such, if business clients have high-stakes litigation in the future, they may very well find themselves in one of these new Business Courts.
For more information, you may contact JD at (469) 916-7700 x110 or email him.
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About J.D. Reed
John David “JD” Reed focuses his practice on litigation involving private equity, corporate law, finance litigation, and commercial business disputes, business partnership disputes, construction defects, DTPA/consumer protection, employment, breach of fiduciary duty, non-compete, eminent domain, and Anti-SLAPP.Learn more about J.D….