88R6271 AMF-F
By: Murr H.B. No. 19
A BILL TO BE ENTITLED
AN ACT
relating to the creation of a specialty trial court to hear certain
cases; authorizing fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 2, Government Code, is amended
by adding Chapter 24A to read as follows:
CHAPTER 24A. BUSINESS COURT
Sec. 24A.001. DEFINITIONS. In this chapter:
(1) "Controlling person" means a person who directly
or indirectly controls a governing person, officer, or
organization.
(2) "Governing documents" means the instruments,
documents, or agreements adopted under an organization's governing
law to govern the organization's formation and internal affairs.
The term includes:
(A) a certificate of formation, articles of
incorporation, and articles of organization;
(B) bylaws;
(C) a partnership agreement;
(D) a company agreement or operating agreement;
(E) a shareholder agreement;
(F) a voting agreement or voting trust agreement;
and
(G) an agreement among owners restricting the
transfer of ownership interests.
(3) "Governing law" means the law governing the
formation and internal affairs of an organization.
(4) "Governing person" means a person who is entitled,
alone or as part of a group, to manage and direct an organization's
affairs under the organization's governing documents and governing
law. The term includes:
(A) a member of the board of directors of a
corporation or other organization;
(B) a general partner of a general or limited
partnership;
(C) a manager of a limited liability company that
is managed by its managers;
(D) a member of a limited liability company that
is managed by its members;
(E) a trust manager of a real estate investment
trust; and
(F) a trustee of a business trust.
(5) "Governmental entity" means:
(A) this state; or
(B) a political subdivision of this state,
including a municipality, a county, or any kind of district.
(6) "Internal affairs" means:
(A) the rights, powers, and duties of an
organization's governing persons, officers, owners, and members;
and
(B) matters relating to the organization's
membership or ownership interests.
(7) "Managerial official" means a governing person or
officer.
(8) "Officer" means a person elected, appointed, or
designated as an officer of an organization by the organization's
governing persons or governing documents.
(9) "Organization" means a foreign or domestic entity
or association, regardless of whether the organization is for
profit or nonprofit. The term includes:
(A) a corporation;
(B) a limited partnership;
(C) a general partnership;
(D) a limited liability partnership;
(E) a limited liability company;
(F) a business trust;
(G) a real estate investment trust;
(H) a joint venture;
(I) a joint stock company;
(J) a cooperative;
(K) a bank;
(L) a credit union;
(M) a savings and loan association;
(N) an insurance company; and
(O) a series of a limited liability company or of
another entity.
(10) "Owner" means an owner of an organization. The
term includes:
(A) a shareholder or stockholder of a corporation
or other organization;
(B) a general or limited partner of a partnership
or an assignee of a partnership interest in a partnership;
(C) a member of, or an assignee of a membership
interest in, a limited liability company; and
(D) a member of a nonprofit organization.
(11) "Ownership interest" means an owner's interest in
an organization, including an owner's economic, voting, and
management rights.
(12) "Qualified transaction" has the meaning assigned
by Section 271.001, Business & Commerce Code.
Sec. 24A.002. BUSINESS COURT JUDICIAL DISTRICT. The
Business Court Judicial District is composed of all counties in
this state.
Sec. 24A.003. JURISDICTION AND POWERS. (a) Subject to
Subsections (b) and (c), the business court for the Business Court
Judicial District has the jurisdiction provided to a district court
by Section 8, Article V, Texas Constitution, and the jurisdiction
and powers provided to district courts by Chapter 24, including the
power to:
(1) issue writs of injunction, mandamus,
sequestration, attachment, garnishment, and supersedeas; and
(2) grant any relief that may be granted by a district
court.
(b) The business court has within its district civil
jurisdiction concurrent with district courts in:
(1) a derivative action on behalf of an organization;
(2) an action arising out of or relating to a qualified
transaction in which the amount in controversy exceeds $10 million,
excluding interest, statutory damages, exemplary damages,
penalties, attorney's fees, and costs;
(3) an action regarding the governance or internal
affairs of an organization;
(4) an action in which a claim under a state or federal
securities or trade regulation law is asserted against:
(A) an organization;
(B) a governing or controlling person or officer
of an organization for an act or omission by the organization or by
the person in the person's capacity as a governing person; or
(C) an underwriter of securities issued by the
organization or the auditor of an organization;
(5) an action by an organization, or an owner or a
member of an organization, if the action:
(A) is brought against an owner, managerial
official, or controlling person of the organization; and
(B) alleges an act or omission by the person in
the person's capacity as an owner, managerial official, or
controlling person of the organization;
(6) an action alleging that an owner, managerial
official, or controlling person breached a duty by reason of the
person's status as an owner, managerial official, or controlling
person, including the duty of care, loyalty, or good faith;
(7) an action seeking to hold an owner, member, or
governing person of an organization liable for an obligation of the
organization, other than on account of a written contract signed by
the person to be held liable in a capacity other than as an owner,
member, or governing person;
(8) an action in which the amount in controversy
exceeds $10 million, excluding interest, statutory damages,
exemplary damages, penalties, attorney's fees, and costs, that:
(A) arises against, between, or among
organizations, governing authorities, governing persons, members,
or owners, relating to a contract transaction for business,
commercial, investment, agricultural, or similar purposes; or
(B) involves violations of the Finance Code or
Business & Commerce Code;
(9) an action seeking a declaratory judgment or
injunctive relief brought under Chapter 37, Civil Practice and
Remedies Code, involving:
(A) the Business Organizations Code;
(B) an organization's governing documents; or
(C) a dispute based on claims that fall within
the provisions of this subsection; and
(10) an action arising out of the Business
Organizations Code.
(c) The business court does not have jurisdiction of:
(1) a civil action brought by or against a
governmental entity, unless the governmental entity invokes or
consents to the jurisdiction of the business court; or
(2) any claim in which a party seeks recovery of
monetary damages for personal injury or death or any claim arising
under Chapter 17, Business & Commerce Code, the Estates Code, the
Family Code, or Title 9, Property Code, unless all parties and a
judge of the business court agree that the claim may proceed in the
business court.
Sec. 24A.004. JUDICIAL AUTHORITY. A judge of the business
court has all powers, duties, immunities, and privileges of a
district judge.
Sec. 24A.005. INITIAL FILING; REMOVAL AND REMAND; TRANSFER
AND DISMISSAL. (a) An action in the jurisdiction of the business
court may be filed in the business court. If the business court
does not have subject matter jurisdiction of the action, or part of
the action, the court shall, at the option of the party filing the
action:
(1) transfer the action or part of the action to an
appropriate district court; or
(2) dismiss the action or part of the action without
prejudice to the party's rights.
(b) If an action or part of an action is to be transferred
under Subsection (a)(1), and the action or part of the action could
have been filed in more than one county, the party filing the action
may select the county to which the action or part of the action is
transferred.
(c) A party to an action filed in a district court or county
court at law that is in the subject matter jurisdiction of the
business court may remove the action to the business court. If the
business court does not have jurisdiction of the action or part of
the action, the business court shall remand the action, or the part
in which the business court does not have jurisdiction, to the court
from which the action was removed.
(d) Removal of a case to the business court is not subject to
the statutes or rules governing the due order of pleading.
(e) Removal of a case does not waive a defect in venue or
constitute an appearance to determine personal jurisdiction.
Sec. 24A.006. APPEALS. (a) Notwithstanding any other law
and except as provided by Subsection (b) and in instances when the
supreme court has concurrent or exclusive jurisdiction, the
Fifteenth Court of Appeals has exclusive jurisdiction over an
appeal from an order or judgment of the business court or an
original proceeding related to an action or order of the business
court.
(b) If the Fifteenth Court of Appeals is not created, an
appeal from an order or judgment of the business court or an
original proceeding related to an action or order of the business
court shall be filed in the intermediate court of appeals with
jurisdiction of the appeal under Section 22.220.
(c) The procedure governing an appeal or original
proceeding from the business court is the same as the procedure for
an appeal or original proceeding from a district court.
Sec. 24A.007. QUALIFICATIONS OF JUDGE. A judge of the
business court must be:
(1) at least 35 years of age;
(2) a United States citizen;
(3) a resident of this state for at least two years
before appointment; and
(4) a licensed attorney in this state and have 10 or
more years of experience in:
(A) practicing complex civil business
litigation;
(B) practicing business transaction law;
(C) teaching courses in complex civil business
litigation or complex business transaction law at an accredited law
school in this state;
(D) serving as a judge of a court in this state
with civil jurisdiction; or
(E) any combination of experience described by
Paragraphs (A)-(D).
Sec. 24A.008. COMPOSITION OF COURT. (a) The governor, with
the advice and consent of the senate, shall appoint seven judges to
serve the business court.
(b) A judge of the business court may be reappointed.
(c) The governor may not appoint more than three judges who
reside in the same county.
Sec. 24A.009. TERMS OF OFFICE. A judge of the business
court serves a two-year term.
Sec. 24A.010. VACANCY. If a vacancy occurs on the business
court, the governor, with the advice and consent of the senate,
shall appoint, in the same manner as the original appointment,
another person to serve for the remainder of the unexpired term.
Sec. 24A.011. JUDGE'S SALARY. (a) A judge of the business
court shall be paid a total annual salary from the state that is the
sum of:
(1) the salary paid to a district judge by the state
under Section 659.012; and
(2) the maximum amount of county contributions and
supplements allowed by law to be paid to a district judge under
Section 659.012.
(b) The salary shall be paid in equal monthly installments.
Sec. 24A.012. REMOVAL; DISQUALIFICATION AND RECUSAL. (a)
A judge of the business court may be removed from office in the same
manner and for the same reasons as a district judge.
(b) A judge of the business court is disqualified and
subject to mandatory recusal for the same reasons a district judge
is subject to disqualification or recusal in a pending case.
Disqualification or recusal of a judge of the business court shall
be governed by the same procedure as disqualification or recusal of
a district judge.
Sec. 24A.013. PRIVATE PRACTICE OF LAW. A judge of the
business court shall diligently discharge the duties of the office
on a full-time basis and may not engage in the private practice of
law.
Sec. 24A.014. VISITING JUDGE. (a) A retired or former
judge or justice may be assigned as a visiting judge of the business
court by the chief justice of the supreme court. A visiting judge
of the business court is subject to objection, disqualification, or
recusal in the same manner as a retired or former judge or justice
is subject to objection, disqualification, or recusal if appointed
as a visiting district judge.
(b) Before accepting an assignment as a visiting judge of
the business court, a retired or former judge or justice shall take
the constitutional oath of office required of appointed officers of
this state and file the oath with the supreme court.
Sec. 24A.015. JURY PRACTICE AND PROCEDURE. (a) A party in
an action pending in the business court has the right to a trial by
jury when required by the constitution.
(b) A jury trial shall be held in a county in which venue
would be found under Section 15.002, Civil Practice and Remedies
Code.
(c) Subject to Subsection (b), a jury trial in a case
removed to the business court shall be held in the county in which
the action was originally filed.
(d) Subject to Subsection (b), a jury trial in a case filed
initially in the business court shall be held in any county in which
it could have been filed under Section 15.002, Civil Practice and
Remedies Code, as chosen by the plaintiff.
(e) The parties and the judge of the business court may
agree to hold the jury trial in any other county. A party may not be
required to agree to hold the jury trial in a different county.
(f) The drawing of jury panels, selection of jurors, and
other jury-related practice and procedure in the business court
shall be the same as for the district court in the county in which
the trial is held.
(g) Practice, procedure, rules of evidence, issuance of
process and writs, and all other matters pertaining to the conduct
of trials, hearings, and other business in the business court are
governed by the laws and rules prescribed for district courts,
unless otherwise provided by this chapter.
Sec. 24A.016. WRITTEN OPINIONS. To facilitate the
establishment of a coherent body of law, a judge of the business
court shall issue a written opinion when deciding issues of law by
order or judgment, unless:
(1) the court has a well-developed body of law on the
issue;
(2) the court is applying the court's precedent on the
issue; and
(3) another opinion on the issue will not
significantly contribute to the development of the law.
Sec. 24A.017. COURT LOCATION; STAFFING. (a) The business
court shall have a clerk, whose office shall be located in Travis
County in facilities provided by this state. The clerk shall:
(1) receive all filings in the business court; and
(2) fulfill the legal and administrative functions of
a district clerk and an appellate court clerk.
(b) Each judge of the business court shall maintain chambers
in the county seat of the judge's county of residence in facilities
provided by this state.
(c) Subject to Section 24A.015, the business court, or any
judge of the business court, may hold court at any location in this
state, as the court determines is necessary or convenient for a
particular civil action.
(d) The business court shall use the most advanced
technology feasible when necessary and appropriate to facilitate
expeditious proceedings in matters brought before the court. As
determined by the business court, counsel and parties may appear
before the business court by means of Internet-based or other
technological devices rather than in person.
(e) In a county in which the business court sits, the
sheriff shall in person or by deputy attend the business court as
required by the court. The sheriff or deputy is entitled to be
reimbursed by the state for the cost of attending court.
(f) Subject to any limitations provided by the General
Appropriations Act, the business court may appoint personnel
necessary for the operation of the court, including:
(1) the clerk of the court;
(2) staff attorneys for the court;
(3) staff attorneys for each judge of the business
court;
(4) court coordinators; and
(5) administrative assistants.
(g) The court officials shall perform the duties and
responsibilities of their offices and are entitled to the
compensation, fees, and allowances prescribed by law for the
offices.
Sec. 24A.018. FEES. The business court shall provide rates
for fees associated with filings and actions in the business court.
The fees shall be set at a sufficient amount to cover the costs of
administering the provisions of this chapter, taking into account
fee waivers in the interest of justice.
Sec. 24A.019. SEAL. The seal of the business court is the
same as that provided by law for a district court except that the
seal must contain the name "The Business Court of Texas."
Sec. 24A.020. RULES. (a) The supreme court shall
promulgate rules of civil procedure as the court determines
necessary, including rules providing for:
(1) the timely and efficient removal and remand of
cases to and from the business court; and
(2) the assignment of cases to judges of the business
court.
(b) The business court may adopt rules of practice and
procedure, subject to any approval required by the supreme court or
statute.
SECTION 2. Except as otherwise provided by this Act, the
business court for the Business Court Judicial District is created
January 1, 2025.
SECTION 3. As soon as practicable after the effective date
of this Act, the governor shall appoint judges to the business court
for the Business Court Judicial District, as required by Section
24A.008, Government Code, as added by this Act.
SECTION 4. (a) Notwithstanding Chapter 24A, Government
Code, as added by this Act, the business court for the Business
Court Judicial District is not created unless the legislature makes
a specific appropriation of money for that purpose. For purposes of
this subsection, a specific appropriation is an appropriation
identifying the business court or an Act of the 88th Legislature,
Regular Session, 2023, relating to the creation of a specialty
trial court to hear certain cases or of the business court.
(b) Notwithstanding Section 24A.006(a), Government Code, as
added by this Act, a court of appeals retains the jurisdiction the
court had on December 31, 2024, if the business court for the
Business Court Judicial District is not created as a result of
Subsection (a) of this section.
SECTION 5. The changes in law made by this Act apply to
civil actions commenced on or after January 1, 2025.
SECTION 6. This Act takes effect September 1, 2023.