A revised proposal for a new system of specialized business trial courts would focus on urban areas dominated by elected Democratic judges. Litigants in those areas could divert their high-dollar disputes to business courts where the judges would be appointed by the governor.
Large swaths of rural Texas likely would not have business court judges appointed during the launch of the new system over the 2025-2026 state fiscal biennium.
The changes were made by the author of House Bill 19 during floor debate last week. Rep. Andrew Murr, R-Junction, also amended the bill to limit the types of cases that would be diverted to a business court. The House voted last week 90-51 to send the amended bill to the Texas Senate.
Insurance claims, real property foreclosures, claims arising out of the production or sale of a farm product and certain consumer transactions were carved out of the business court’s jurisdiction. Also excluded would be actions involving governmental entities, personal injury and wrongful death, legal malpractice and cases brought under the estate and family codes.
Murr also limited the specialty court’s jurisdiction over derivative proceedings and corporate governance issues to those exceeding $5 million in controversy. The court would have jurisdiction in disputes over certain contractual and commercial transactions in which the amount in controversy exceeded $10 million.
The narrowing of jurisdiction was viewed favorably by Bryan O. Blevins Jr., who has been working on the bill for the Texas Trial Lawyers Association. The plaintiff lawyer group formed an unlikely coalition with the Texas Association of Defense Counsel and Texas-American Board of Trial Advocates in opposing the bill.
Blevins said the coalition doesn’t believe there is a need for specialized business courts but that, if enacted, their jurisdiction should be as narrow as possible “so that cases that have no business being there don’t get accidentally swept in.”
“If you look at the bill where it started and you look at where it is today, the jurisdiction of this court, the number of cases that are going to make their way to this court have been dramatically reduced to the point where it’s going to be very interesting to see how many cases actually ever come to the business court,” said Blevins, a Beaumont lawyer with Provost Umphrey.
The exclusion of insurance claims was important, Blevins said, because Texas already has a well-established body of law on insurance disputes. In addition, he said, it makes no sense to have claims after a hurricane or other major weather event separated by the value of the claim for neighboring businesses.
“We need to keep these cases together moving in the same direction, not split up in different courts with different directions,” he said.
HB 19 would create the Business Court Judicial District, a trial court with statewide jurisdiction and composed of divisions geographically consistent with the existing 11 administrative judicial regions.
Blevins and others watching the bill were surprised by changes to the bill that would initially limit the appointment of judges only to those business courts serving the state’s main urban regions.
The bill directs the governor “as soon as practicable” after the Sept. 1 effective date of the act to appoint two judges to each of the First, Third, Fourth and Eleventh Divisions and one judge the Eighth Division. Those divisions, based on existing administrative judicial regions, would cover cases from the Dallas, Austin, San Antonio, Houston and Fort Worth areas. Judges would be appointed by the governor, with the advice and consent of the Senate, for a term of two years, and could be reappointed.
It would only be later, in a two-month window between July 1, 2026, and Sept. 1, 2026, that the governor would select one judge for each of the Second, Fifth, Sixth, Seventh, Ninth and Tenth Divisions of the business court. Those divisions would be abolished Sept. 1, 2026, unless reauthorized by the legislature and funded through additional legislative appropriations.
Blevins said it defies common sense to say that the business courts are a good thing for all Texans and that they were created to be geographically responsive to the entire state.
“Then you exclude whole swaths of our state, and — by the way — those happen to correspond to predominately Republican-leaning areas,” he said. “If this is such a great thing, well then why all of a sudden now are claims related to farm products and ranch products and animals no longer included or why do we now exclude specifically foreclosure actions on liens for real and personal property. If we’re going to include contracts and commercial transactions, then why are we now excluding claims relating to banks, credit unions or savings and loan associations.
“You can take from that what you will, but clearly there were people who had special interest in certain things and there were substantial changes in the bill to accommodate somebody.”
Murr’s office didn’t respond to questions about the amendments. During floor debate, he said HB 19 is needed for more efficient handling of complex business disputes that often must take a back seat to child protection and criminal cases.
“Second, once these cases are heard they are often highly complicated and best suited for jurists with deep backgrounds in transaction law,” Murr said.
The House rejected, on a 63-81 vote, an amendment offered by Rep. Joe Moody, D-El Paso, to have the judges elected by voters of the geographic division.
“This is not a party-line issue. It’s about continuing to elect our judges,” said Moody. “That’s what we’ve done for the entire history of our state. From rural justices of the peace to the chief justice of the Texas Supreme Court. HB 19 would turn that on its head for the first time in state history by allowing the governor to perpetually appoint judges of these business courts.”
Critics of the bill have argued that it would violate requirements in the Texas Constitution that district court judges be elected by voters of the geographic region served by a court. Proponents of the bill say another provision in the Texas Constitution allows lawmakers to create special courts that are different from district courts.
The bill carries a fiscal note of $15.5 million for two years of court operations. The Supreme Court would set filing fees for the business court to cover the cost.
Related legislation would establish a new statewide intermediate court of appeals to hear appeals from the business courts along with matters involving state agencies. It would take away many of the cases now heard by the Austin-based Third Court of Appeals, whose six justices are all Democrats. Senate Bill 1045 was voted out of the House Judiciary & Civil Jurisprudence Committee last week. May 11 is the last day for the full House to consider bills on second reading.