In a significant move to streamline business litigation, Texas has introduced specialized business courts that opened on September 1, 2024. Here’s a breakdown of what these new courts entail and how they aim to transform the legal landscape for businesses in Texas.
What Are Texas Business Courts?
The Texas business courts are a new judicial system designed to handle high-stakes commercial disputes more efficiently. These courts were established following the passage of House Bill 19, signed into law by Governor Greg Abbott in June 2023.
Structure and Jurisdiction
The business courts are divided into 11 geographic divisions, similar to the state’s existing district court system. Initially, five divisions will open in major Texas cities:
- Austin
- Dallas
- Fort Worth
- Houston
- San Antonio
The remaining six divisions, covering more rural areas, will become operational after additional funding is secured from the 2025 Texas Legislature.
These courts will have jurisdiction over complex business disputes involving financial institutions, commercial transactions, and matters governed by the Texas Finance or Business & Commerce Codes, with an amount in controversy of $10 million or more.
Who Are the Judges?
Unlike other Texas courts where judges are elected, the governor appoints business court judges for two-year terms.
Key Features and Procedures
The Texas Supreme Court has approved preliminary procedural rules for these courts, which include:
- Establishing jurisdiction and venue
- Procedures for case transfers from general jurisdiction courts to business courts
- Remote appearances
- Required written opinions on significant issues
These rules are designed to ensure transparency and efficiency in handling complex business cases.
Goals and Benefits
The primary goal of the Texas business courts is to reduce case backlogs in general civil courts and provide a more predictable and efficient legal environment for businesses. By offering a specialized forum for business disputes, Texas aims to attract more businesses to incorporate and headquarters in the state.
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