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Legislative Recap: New Courts Coming to Texas

Business Trial Courts, Statewide 15th Court of Appeals Created by Legislature

Significant changes are coming to Texas courts, thanks to two pieces of legislation passed during the 88th Texas legislative session.

Senate Bill 1045, by State Senator Joan Huffman and sponsored by State Representative Andrew Murr, establishes the new Fifteenth Court of Appeals. This new court is an intermediate appellate court with statewide jurisdiction that will have jurisdiction over most cases brought against the state or a state agency, cases where the constitutionality of a state law is challenged and the Attorney General is also a party to the case, and other matters provided by law.

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The idea of a new appellate court, such as the Fifteenth Court of Appeals, has percolated around the Capitol and legal community for several years out of frustration that the Third Court of Appeals, with an electorate based in Austin, had undue influence over matters of statewide importance.

The Fifteenth Court of Appeals will consist of five justices elected statewide.

House Bill 19, by State Representative Andrew Murr and sponsored by State Senator Bryan Hughes, creates a new business trial court with jurisdiction over certain business disputes. The types of disputes that the business court will have jurisdiction over include derivative proceedings, cases involving the internal governance of a business, cases involving alleged violations of securities or trade regulation laws, cases involving an alleged breach of duty by a company official, and actions brought under the Texas Business Organizations Code. The amount in controversy in such cases must be at least $5 million for the business court to have jurisdiction.

The business court will also have jurisdiction in cases where the amount in controversy exceeds $10 million, if the action arises out of certain transactions where more than $10 million is paid or obligated to be paid, and where the parties to a contract voluntarily consent to the jurisdiction of the business court and certain other cases. The new Fifteenth Court of Appeals will have appellate jurisdiction over cases heard in the business court.

Judges to the new business court will be appointed by the Governor for two-year terms and will be eligible for re-appointment. Additionally, judges on the business court must have at least ten years of experience as a judge or practicing complex business litigation or business transaction law.

Senate Bill 1045 and House Bill 19 had significant support from conservative organizations and the business community. In a statement to The Texas Voice, Lucy Nashed Cafrelli, spokesperson for Texans for Lawsuit Reform, stated, “Our legal system is already specialized from top to bottom because the Texas Legislature has long seen the value in allowing judges to focus on a specific subject matter, resulting in judicial efficiency and consistent application of the law. The passage of HB 19 and SB 1045 this session builds on that specialization. Having both a trial court and appellate court dedicated to resolving complex business disputes will provide a coherent Texas jurisprudence in commercial law and will enhance Texas’ reputation as the best state in the nation to do business. And the creation of an appellate court to handle cases involving the state and state agencies will improve consistency and efficiency in decisions that impact every Texan statewide.”

Both the Fifteenth Court of Appeals and the business court will take effect on September 1, 2024.

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