“10 Key Points to Know about Texas’ New Specialized Business Trial Courts Bill Recently Passed by the Legislature”

On May 12, 2023, the Texas Senate passed HB 19, a bill that establishes specialized business courts. The legislation is currently awaiting the Governor’s consideration, and it is expected that he will sign it into law.

HB 19 will take effect on September 1, 2023, but it will only apply to civil actions that commence on or after September 1, 2024. This one-year period will allow for certain preliminary steps to be completed, such as the appointment and senate confirmation of judges and the adoption of rules of civil procedure consistent with the Texas Rules of Civil Procedure and the Texas Rules of Evidence.

Sixteen business court judges will be appointed by the Governor with the advice and consent of the Senate. These judges will serve for two years beginning on September 1 of every even-numbered year and will be subject to certain qualifications, such as being residents of a county within the division of the business court to which they are appointed for at least five years before appointment and having 10 or more years of experience in practicing complex civil business litigation, practicing business transactional law, or serving as a judge of a court in the state with civil jurisdiction.

HB 19 establishes tiers of jurisdiction for the business courts created based on the type of action, the amount in controversy, and whether a publicly-traded company is involved. The courts will have civil jurisdiction concurrent with district courts for certain actions, such as an action regarding governance, governing documents, or internal affairs of an organization, and an action alleging breach of a duty owed to an organization or an owner by reason of the person’s status as an owner or certain controlling or managing person.

Finally, the business courts created under HB 19 will have the authority to hear matters seeking injunctive or declaratory relief.

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