Texas 2021 - 87th Regular

Texas House Bill HB1875 Compare Versions

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1-87R18570 TSS-F
2- By: Landgraf, Bonnen, Leach, Smith H.B. No. 1875
3- Substitute the following for H.B. No. 1875:
4- By: Middleton C.S.H.B. No. 1875
1+By: Landgraf H.B. No. 1875
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63
74 A BILL TO BE ENTITLED
85 AN ACT
96 relating to the creation of the business court and the court of
107 business appeals to hear certain cases; authorizing fees.
118 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
129 SECTION 1. Subtitle A, Title 2, Government Code, is amended
1310 by adding Chapter 24A to read as follows:
1411 CHAPTER 24A. BUSINESS COURT AND COURT OF BUSINESS APPEALS
1512 SUBCHAPTER A. GENERAL PROVISIONS
1613 Sec. 24A.001. DEFINITIONS. In this chapter:
17- (1) "Governing documents" means the instruments,
14+ (1) "Controlling person" means a person who directly
15+ or indirectly controls a governing person, officer, or
16+ organization.
17+ (2) "Governing documents" means the instruments,
1818 documents, or agreements adopted under an organization's governing
1919 law to govern the organization's formation and internal affairs.
2020 The term includes:
2121 (A) a certificate of formation, articles of
2222 incorporation, and articles of organization;
2323 (B) bylaws;
2424 (C) a partnership agreement;
2525 (D) a company agreement or operating agreement;
2626 (E) a shareholder agreement;
2727 (F) a voting agreement or voting trust agreement;
2828 and
2929 (G) an agreement among owners restricting the
3030 transfer of ownership interests.
31- (2) "Governing law" means the law governing the
31+ (3) "Governing law" means the law governing the
3232 formation and internal affairs of an organization.
33- (3) "Governing person" means a person who is entitled,
33+ (4) "Governing person" means a person who is entitled,
3434 alone or as part of a group, to manage and direct an organization's
3535 affairs under the organization's governing documents and governing
3636 law. The term includes:
3737 (A) a member of the board of directors of a
3838 corporation or other organization;
3939 (B) a general partner of a general or limited
4040 partnership;
4141 (C) a manager of a limited liability company that
4242 is managed by its managers;
4343 (D) a member of a limited liability company that
4444 is managed by its members;
4545 (E) a trust manager of a real estate investment
4646 trust; and
4747 (F) a trustee of a business trust.
48- (4) "Governmental entity" means:
48+ (5) "Governmental entity" means:
4949 (A) the state; or
5050 (B) a political subdivision of the state,
5151 including a municipality, a county, or any kind of district.
52- (5) "Internal affairs" means:
52+ (6) "Internal affairs" means:
5353 (A) the rights, powers, and duties of an
5454 organization's governing persons, officers, owners, and members;
5555 and
5656 (B) matters relating to the organization's
5757 membership or ownership interests.
58- (6) "Officer" means a person elected, appointed, or
58+ (7) "Managerial official" means a governing person or
59+ officer.
60+ (8) "Officer" means a person elected, appointed, or
5961 designated as an officer of an organization by the organization's
60- governing persons or the organization's governing documents.
61- (7) "Organization" means a foreign or domestic entity
62- or association, regardless of whether for profit or nonprofit. The
63- term includes:
62+ governing persons or by the organization's governing documents.
63+ (9) "Organization" means a foreign or domestic entity
64+ or association that is for profit or nonprofit. The term includes:
6465 (A) a corporation;
6566 (B) a limited partnership;
6667 (C) a general partnership;
6768 (D) a limited liability partnership;
6869 (E) a limited liability company;
6970 (F) a business trust;
7071 (G) a real estate investment trust;
7172 (H) a joint venture;
7273 (I) a joint stock company;
7374 (J) a cooperative;
7475 (K) a bank;
7576 (L) a credit union;
7677 (M) a savings and loan association;
7778 (N) an insurance company; and
7879 (O) a series of a limited liability company or of
7980 another entity.
80- (8) "Owner" means an owner of an organization. The
81+ (10) "Owner" means an owner of an organization. The
8182 term includes:
8283 (A) a shareholder or stockholder of a corporation
8384 or other organization;
8485 (B) a general or limited partner of a partnership
8586 or an assignee of a partnership interest in a partnership;
8687 (C) a member of, or an assignee of a membership
8788 interest in, a limited liability company; and
8889 (D) a member of a nonprofit organization.
89- (9) "Ownership interest" means an owner's interest in
90+ (11) "Ownership interest" means an owner's interest in
9091 an organization, including an owner's economic, voting, and
9192 management rights.
93+ (12) "Qualified transaction" means a qualified
94+ transaction as that term is defined in Section 271.001, Business &
95+ Commerce Code.
9296 SUBCHAPTER B. BUSINESS COURT
9397 Sec. 24A.051. JURISDICTION. (a) The business court has
9498 civil jurisdiction concurrent with district courts in:
9599 (1) a derivative action on behalf of an organization;
96100 and
97101 (2) an action in which the amount in controversy
98102 exceeds $10 million, excluding interest, statutory damages,
99103 exemplary damages, penalties, attorney's fees, and costs, that
100104 arises against, between, or among organizations, governing
101105 authorities, governing persons, members, or owners, relating to a
102106 contract transaction for business, commercial, investment,
103107 agricultural, or similar purposes.
104108 (b) The business court has statewide jurisdiction of an
105109 action described in Subsection (a) and all matters arising out of or
106110 related to an action described in Subsection (a).
107111 (c) The business court may grant any relief available in a
108112 district court.
109113 (d) Notwithstanding Subsections (a) and (b), the business
110114 court:
111- (1) does not have jurisdiction of a civil
112- action brought by or against a governmental entity, unless the
115+ (1) does not have jurisdiction of a civil action
116+ brought by or against a governmental entity, unless the
113117 governmental entity invokes or consents to the jurisdiction of the
114118 business court; and
115119 (2) must sever any claim in which a party seeks
116120 recovery of monetary damages for personal injury or death or any
117121 claim arising under Chapter 17, Business & Commerce Code, the
118122 Estates Code, the Family Code, or Title 9, Property Code, unless all
119- parties and a judge of the business court agree that the claim may
123+ parties and the business court judge agree that the claim may
120124 proceed in the business court.
121125 (e) If a claim is severed as provided by Subsection (d)(2),
122126 the business court has discretion to stay or abate its own
123127 proceedings pending resolution of the severed claim.
124128 Sec. 24A.052. INITIAL FILING; REMOVAL AND REMAND; TRANSFER.
125129 (a) An action in the jurisdiction of the business court may be
126130 filed in the business court. If the business court does not have
127131 subject matter jurisdiction of the action, or part of the action,
128132 the court shall dismiss without prejudice to refiling the whole or
129133 part of the action. A claim that is dismissed under this subsection
130134 may be refiled in a court with jurisdiction by the party who filed
131135 the claim in the business court not later than the 30th day after
132136 the date the claim was dismissed by the business court,
133137 notwithstanding the expiration of a period of limitation provided
134138 by statute.
135139 (b) A party to an action filed in a district court or county
136140 court at law that is in the subject matter jurisdiction of the
137141 business court may remove the action to the business court by filing
138142 a notice of removal with the business court and the court in which
139143 the action was originally filed. If the business court does not
140144 have jurisdiction of the action or part of the action, the business
141145 court shall remand the action, or the part in which the business
142146 court does not have jurisdiction, to the court from which the action
143147 was removed. A party may appeal an interlocutory order of the
144148 business court that grants or refuses a remand under this
145149 subsection to the court of business appeals.
146150 (c) Removal of a case to the business court is not subject to
147151 the statutes or rules governing the due order of pleading.
148152 (d) Removal of a case does not waive a defect in venue or
149153 constitute an appearance to determine personal jurisdiction.
150154 (e) Any claim in which the business court does not have
151155 jurisdiction as provided by Section 24A.051(d) must be transferred
152156 to a district court in a county in which the claim could have been
153157 originally filed. If the claim could have been filed in more than
154158 one county, the party bringing the claim may elect the county to
155159 which the claim is transferred.
156160 (f) A cause of action filed in the business court shall be
157161 assigned to the docket of a judge on a rotating basis.
158162 (g) The supreme court shall promulgate rules of civil
159163 procedure providing for the timely and efficient removal and remand
160164 of cases to and from the business court.
161- Sec. 24A.053. POWERS AND DUTIES. (a) The business court may
162- issue any writ necessary for the enforcement of the court's
165+ Sec. 24A.053. POWERS AND DUTIES. (a) The business court
166+ may issue any writ necessary for the enforcement of the court's
163167 jurisdiction, including a:
164168 (1) writ of injunction;
165169 (2) writ of mandamus;
166170 (3) writ of sequestration;
167171 (4) writ of attachment;
168172 (5) writ of garnishment; and
169173 (6) writ of supersedeas.
170174 (b) The business court may answer a question regarding a
171175 matter in the court's jurisdiction that is certified to the
172176 business court by another court.
173177 Sec. 24A.054. QUALIFICATIONS OF JUDGE. A judge of the
174- business court must be:
175- (1) at least 35 years of age;
176- (2) a United States citizen;
177- (3) a resident of this state for at least two years
178+ business court must:
179+ (1) be at least 35 years of age;
180+ (2) be a United States citizen;
181+ (3) be a resident of this state for at least two years
178182 before appointment; and
179- (4) a licensed attorney in this state and have 10 or
183+ (4) be a licensed attorney in this state and have 10 or
180184 more years of experience in:
181185 (A) practicing complex civil business
182186 litigation;
183187 (B) practicing business transaction law;
184188 (C) teaching courses in complex civil business
185189 litigation or complex business transaction law at an accredited law
186190 school in this state;
187191 (D) serving as a judge of a court in this state
188192 with civil jurisdiction; or
189- (E) any combination of activities described by
193+ (E) any combination of experience described by
190194 Paragraphs (A)-(D).
191- Sec. 24A.055. COMPOSITION OF COURT. (a) The governor, with
192- the advice and consent of the senate, shall appoint seven judges to
193- serve the business court.
194- (b) A judge of the business court may be reappointed.
195+ Sec. 24A.055. COMPOSITION OF COURT. (a) The business court
196+ is composed of seven judges appointed by the governor with the
197+ advice and consent of the senate.
198+ (b) A business court judge may be reappointed.
195199 (c) The governor may not appoint:
196200 (1) more than three judges who reside in the same
197201 county; or
198202 (2) more than a majority of judges associated with the
199203 same political party.
200- Sec. 24A.056. TERMS OF OFFICE. A judge of the business
201- court serves a two-year term.
204+ Sec. 24A.056. TERMS OF OFFICE. The judges of the business
205+ court shall serve two-year terms of office.
202206 Sec. 24A.057. VACANCY. If a vacancy occurs on the business
203207 court, the governor, with the advice and consent of the senate,
204208 shall appoint, in the same manner as the original appointment,
205209 another person to serve for the remainder of the unexpired term.
206- Sec. 24A.058. JUDICIAL AUTHORITY. A judge of the business
207- court has all powers, duties, immunities, and privileges of a
208- district judge.
209- Sec. 24A.059. JUDGE'S SALARY. (a) A judge of the business
210- court shall be paid a total annual salary from the state that is the
211- sum of:
210+ Sec. 24A.058. JUDICIAL AUTHORITY. A business court judge
211+ has all powers, duties, immunities, and privileges of a district
212+ judge.
213+ Sec. 24A.059. JUDGE'S SALARY. (a) A business court judge
214+ shall be paid a total annual salary from the state that is the sum
215+ of:
212216 (1) the salary paid to a district judge by the state
213217 under Section 659.012; and
214218 (2) the maximum amount of county contributions and
215219 supplements allowed by law to be paid to a district judge under
216220 Section 659.012.
217221 (b) The salary shall be paid in equal monthly installments.
218222 Sec. 24A.060. REMOVAL; DISQUALIFICATION AND RECUSAL. (a)
219- A judge of the business court may be removed from office in the same
220- manner and for the same reasons as a district judge.
221- (b) A judge of the business court is disqualified or shall
222- recuse himself or herself in a particular case for the same reasons
223- as a district judge. Disqualification or recusal of a judge of the
224- business court shall be governed by the same procedure as
225- disqualification or recusal of a district judge.
226- Sec. 24A.061. PRIVATE PRACTICE OF LAW. A judge of the
227- business court shall diligently discharge the duties of the office
228- on a full-time basis and may not engage in the private practice of
229- law.
223+ A business court judge may be removed from office in the same manner
224+ and for the same reasons as a district judge.
225+ (b) A business court judge is disqualified or shall recuse
226+ himself or herself in a particular case for the same reasons as a
227+ district judge. Disqualification or recusal of a business court
228+ judge shall be governed by the same procedure as disqualification
229+ or recusal of a district judge.
230+ Sec. 24A.061. PRIVATE PRACTICE OF LAW. A business court
231+ judge shall diligently discharge the duties of the office on a
232+ full-time basis and may not engage in the private practice of law.
230233 Sec. 24A.062. VISITING JUDGE. (a) A retired or former
231234 judge or justice may be assigned as a visiting judge of the business
232235 court by the chief justice of the supreme court. A visiting judge
233236 of the business court is subject to objection, disqualification, or
234237 recusal in the same manner as a retired or former judge or justice
235238 is subject to objection, disqualification, or recusal if appointed
236239 as a visiting district judge.
237- (b) A visiting judge must meet the qualifications of a judge
238- of the business court as provided by Section 24A.054.
240+ (b) A visiting judge must meet the qualifications of a
241+ business court judge as provided by Section 24A.054.
239242 (c) Before accepting an assignment as a visiting judge of
240243 the business court, a retired or former judge or justice shall take
241244 the constitutional oath of office required of appointed officers of
242245 this state and file the oath with the supreme court.
243246 Sec. 24A.063. JURY PRACTICE AND PROCEDURE. (a) A party in
244247 an action pending in the business court has the right to a trial by
245248 jury when required by the constitution.
246249 (b) A jury trial shall be held in a county in which venue
247250 would be found under Section 15.002, Civil Practice and Remedies
248251 Code.
249252 (c) Subject to Subsection (b), a jury trial in a case
250253 removed to the business court shall be held in the county in which
251254 the action was originally filed.
252255 (d) Subject to Subsection (b), a jury trial in a case filed
253256 initially in the business court shall be held in any county in which
254257 it could have been filed under Section 15.002, Civil Practice and
255258 Remedies Code, as chosen by the plaintiff.
256- (e) The parties and the judge of the business court may
257- agree to hold the jury trial in any other county. A party may not be
258- required to agree to hold the jury trial in a different county.
259+ (e) The parties and the business court judge may agree to
260+ hold the jury trial in any other county. A party may not be required
261+ to agree to hold the jury trial in a different county.
259262 (f) The drawing of jury panels, selection of jurors, and
260263 other jury-related practice and procedure in the business court
261264 shall be the same as for the district court in the county in which
262265 the trial is held.
263266 (g) Practice, procedure, rules of evidence, issuance of
264267 process and writs, and all other matters pertaining to the conduct
265- of trials, hearings, and other business in the business court are
266- governed by the laws and rules prescribed for district courts,
267- unless otherwise provided by this chapter.
268+ of trials, hearings, and other business in the business court not
269+ otherwise provided for in this chapter are governed by the laws and
270+ rules prescribed for district courts.
268271 (h) The business court may adopt rules of practice, which
269272 must be approved by the supreme court.
270273 Sec. 24A.064. COURT LOCATION; STAFFING. (a) The business
271274 court shall have a clerk, whose office shall be located in Travis
272275 County in facilities provided by the state. The clerk shall:
273276 (1) receive all filings in the business court; and
274277 (2) fulfill the legal and administrative functions of
275278 a district clerk and an appellate court clerk.
276- (b) Each judge of the business court shall maintain chambers
277- in the county seat of the judge's county of residence in facilities
279+ (b) The judges of the business court shall maintain chambers
280+ in the county seat of their county of residence in facilities
278281 provided by the state.
279282 (c) Subject to Section 24A.063, the business court, or any
280283 judge of the business court, may hold court at any location in the
281284 state, as the court determines is necessary or convenient for a
282285 particular civil action.
283286 (d) The business court shall use the most advanced
284287 technology feasible when necessary and appropriate to facilitate
285288 expeditious proceedings in matters brought before the court. As
286289 determined by the business court, counsel and parties may appear
287290 before the business court by means of Internet-based or other
288291 technological devices rather than in person.
289292 (e) In a county in which the business court sits, the
290293 sheriff shall in person or by deputy attend the business court as
291294 required by the court. The sheriff or deputy is entitled to be
292295 reimbursed by the state for the cost of attending court.
293296 (f) Subject to any limitations provided by the General
294297 Appropriations Act, the business court may appoint personnel
295298 necessary for the operation of the court, including:
296299 (1) the clerk of the court;
297300 (2) staff attorneys for the court;
298- (3) staff attorneys for each judge of the business
299- court;
301+ (3) staff attorneys for each business court judge;
300302 (4) court coordinators; and
301303 (5) administrative assistants.
302304 (g) The court officials shall perform the duties and
303305 responsibilities of their offices and are entitled to the
304306 compensation, fees, and allowances prescribed by law for the
305307 offices.
306308 Sec. 24A.065. FEES. The business court shall provide rates
307309 for fees associated with filings and actions in the business court.
308310 The fees shall be set at a sufficient amount to cover the costs of
309311 administering the provisions of this chapter, taking into account
310312 fee waivers in the interest of justice.
311313 Sec. 24A.066. SEAL. The seal of the business court is the
312314 same as that provided by law for a district court except that the
313315 seal must contain the name "The Business Court of Texas."
314316 SUBCHAPTER C. COURT OF BUSINESS APPEALS
315- Sec. 24A.101. JURISDICTION; APPEAL. (a) The Court of
316- Business Appeals has exclusive jurisdiction over an appeal from an
317- order or judgment of the business court.
318- (b) An appeal from an order or judgment of the business
319- court is available in the same manner as an appeal from an order or
320- judgment of a district court.
321- (c) The procedure governing an appeal from an order or
322- judgment of a business court is the same as an appeal from an order
323- or judgment of a district court.
324- Sec. 24A.102. COURT OF BUSINESS APPEALS; COMPOSITION. (a)
325- The governor, with the advice and consent of the senate, shall
326- appoint seven justices to serve as the Court of Business Appeals.
317+ Sec. 24A.101. APPEAL; COURT OF BUSINESS APPEALS. An appeal
318+ from an order or judgment of the business court is available in the
319+ same manner as an appeal from an order or judgment of a district
320+ court. The procedure governing an appeal from an order or judgment
321+ of a business court is the same as an appeal from an order or
322+ judgment of a district court. An appeal from an order or judgment
323+ of the business court must be filed in the court of business
324+ appeals.
325+ Sec. 24A.102. COMPOSITION OF COURT. (a) The court of
326+ business appeals is composed of seven justices appointed by the
327+ governor with the advice and consent of the senate.
327328 (b) A justice of the court of business appeals must meet the
328329 qualifications of a judge of the business court as provided by
329330 Section 24A.054.
330- (c) A justice of the Court of Business Appeals may be
331- appointed to two or more consecutive terms.
332- Sec. 24A.103. CHIEF JUSTICE. The governor shall designate
333- one of the seven justices appointed under Section 24A.102 as the
334- chief justice of the Court of Business Appeals.
335- Sec. 24A.104. TERM OF OFFICE. A justice of the Court of
336- Business Appeals shall serve a two-year term.
337- Sec. 24A.105. VACANCY. If a vacancy occurs on the Court of
331+ (c) The governor shall designate one of the seven justices
332+ as the chief justice of the court of business appeals.
333+ (d) A justice of the court of business appeals may be
334+ reappointed by the governor.
335+ Sec. 24A.103. TERMS OF OFFICE. The justices of the court of
336+ business appeals shall serve two-year terms of office.
337+ Sec. 24A.104. VACANCY. If a vacancy occurs on the court of
338338 business appeals, the governor, with the advice and consent of the
339339 senate, shall appoint, in the same manner as the original
340340 appointment, another person to serve for the remainder of the
341341 unexpired term.
342- Sec. 24A.106. JUDICIAL AUTHORITY. A justice of the Court of
342+ Sec. 24A.105. JUDICIAL AUTHORITY. A justice of the court of
343343 business appeals has all powers, duties, immunities, and privileges
344- as a court of appeals justice.
345- Sec. 24A.107. PANEL. The justices appointed to the Court of
344+ of a court of appeals justice.
345+ Sec. 24A.106. PANEL. The justices appointed to the court of
346346 business appeals shall sit in randomly selected panels of three to
347347 hear and determine appeals from the business court.
348- Sec. 24A.108. LOCATION. The justices hearing appeals from
348+ Sec. 24A.107. LOCATION. The justices hearing appeals from
349349 the business court may sit in any convenient place to hear the
350350 appeal.
351- Sec. 24A.109. JUDGMENT. The Court of Business Appeals
352- shall render judgments and issue opinions in the same manner as any
353- other court of appeals under Chapter 22.
354- Sec. 24A.110. REVIEW. (a) A party may seek an en banc
351+ Sec. 24A.108. JUDGMENT. The court of business appeals
352+ shall render judgments and hand down opinions in the same manner as
353+ any other court of appeals under Chapter 22.
354+ Sec. 24A.109. REVIEW. (a) A party may seek an en banc
355355 review of a decision of a panel of the court of business appeals.
356356 (b) A party to an order or judgment of the business court or
357357 the court of business appeals may file a petition for review in the
358358 supreme court in the same manner and circumstances as a party to an
359359 order or judgment of a district court or court of appeals.
360- Sec. 24A.111. CLERK. The clerk of the business court shall
360+ Sec. 24A.110. CLERK. The clerk of the business court shall
361361 serve as the clerk of the court of business appeals.
362- Sec. 24A.112. COMPENSATION. A justice of the Court of
362+ Sec. 24A.111. COMPENSATION. A justice of the court of
363363 business appeals shall receive compensation equal to that of the
364364 chief justice of a court of appeals, including the maximum amount of
365365 local contributions.
366- Sec. 24A.113. SEAL. The seal of the Court of Business
366+ Sec. 24A.112. SEAL. The seal of the court of business
367367 appeals is the same as that provided by law for a court of appeals
368368 except that the seal must contain the name "The Court of Business
369369 Appeals of Texas."
370370 SECTION 2. (a) As soon as practicable after the effective
371371 date of this Act, the governor shall appoint judges to the business
372372 court, as required by Section 24A.055, Government Code, as added by
373373 this Act.
374374 (b) As soon as practicable after the effective date of this
375375 Act, the governor shall appoint justices to the court of business
376376 appeals, as required by Section 24A.102, Government Code, as added
377377 by this Act.
378378 SECTION 3. The changes in law made by this Act apply to
379379 civil actions commenced on or after January 1, 2022.
380380 SECTION 4. (a) The Supreme Court of Texas has exclusive and
381381 original jurisdiction over a challenge to the constitutionality of
382382 this Act or any part of this Act and may issue injunctive or
383383 declaratory relief in connection with the challenge.
384384 (b) If the appointment of judges by the governor to the
385385 business court under Section 24A.055, Government Code, as added by
386386 this Act, is held by the Supreme Court of Texas as unconstitutional,
387387 the business court shall be staffed by sitting or retired judges who
388388 are appointed by the supreme court.
389- (c) If the appointment of a justice by the governor to the
389+ (c) If the appointment of justices by the governor to the
390390 court of business appeals under Section 24A.102, Government Code,
391391 as added by this Act, is held by the Supreme Court of Texas as
392392 unconstitutional, the court of business appeals shall be staffed by
393393 sitting or retired justices who are appointed by the supreme court.
394394 SECTION 5. This Act takes effect September 1, 2021.