The new Texas business courts have been open since Sept. 1, but lawyers are not yet rushing to file cases there.
As of Thursday, four cases have been filed in the courts — two in the Eleventh Division, which covers the Houston area, and one each in the First Division, which covers the Dallas area, and the Third Division that covers the Austin area.
The first lawsuit ever filed in the new business courts is Primoris T&D Services v. QLoop and QLoop Communications Services, filed by Bell Nunnally & Martin attorneys R. Heath Cheek and Nathan Cox. The $15 million lawsuit, filed in the Third Division, pits two Texas-based companies against one another in a construction dispute over a 40-mile fiber optic cable project being built in Maryland and Virginia.
“We stayed up past our bedtime,” Cheek said about earning the title of first to file.
To help stay awake until the clock struck midnight on Sept. 1, when filing officially opened for the business courts, Cheek indulged in a bowl of ice cream: Blue Bell’s Oatmeal Cream Pie. A self-proclaimed chocolate-peanut butter aficionado, Cox went with that flavor from Häagen-Dazs.
“The clock struck midnight, the option popped up and we went ahead and filed,” Cheek said. “It was remarkably easy to file.”
The only difference is the filing fee: to sue in state district court, the filing fee is a few hundred dollars. In the new business court, it’s $2,500.
“The goal of the legislature was to put the business courts on a path to self-sustainability,” he said of the higher fee. “It’s designed to be somewhere between a district court and arbitration, where you’re paying all the expense. You are paying a bit more to take advantage of this court system.”
Cheek said filing this case in the business courts just made sense for his client.
“This involves two very highly sophisticated parties on both sides of a sophisticated project,” he said. “And it just felt like the perfect case for what the business courts were designed for. It was more about the structure of the court and the advantages those courts provide rather than having anything against a particular court.”
Among the advantages, he said, is that the judges on the business court will be required to explain their reasoning in written opinions on dispositive motions.
“Because whether you win or lose, you can tell your client, ‘here’s what the judge was thinking,’” he said.
David W. Jones and Garrett S. Brawley of Beck Redden were also among the first lawyers to take advantage of the new courts. They filed the first lawsuit in the First Division on behalf of Targa Northern Delaware against Franklin Mountain Energy.
In that case, stemming from an alleged $10 million breach of a natural gas gathering, processing and purchase agreement, Targa alleges that, since 2022, Franklin has failed to deliver the gas it promised. Targa also accuses Franklin of improperly trying to terminate the agreement.
Winston & Strawn lawyers Tom Melsheimer, LeElle B. Slifer, Dylan J. French and Alexander Nowakowski filed the first lawsuit in the Eleventh Division on behalf of client MedProperties Tomball. MedProperties is accusing a group of 11 defendants of breach of contract, fraudulent inducement and conspiracy related to the purchase of a $36 million medical office building in Tomball that’s allegedly plagued with plumbing and sewage problems.
A second lawsuit has been filed in the Eleventh Division, according to interim Clerk of Court Beverly Crumley, but it was not publicly available on the website as of press time Thursday where court records for the business courts will be housed, re:SearchTX.
Meanwhile, there’s still the issue of courtroom and chambers space for the business courts to be worked out.
“We’ve been looking at this since the beginning of the year,” Texas Supreme Court Chief Justice Nathan Hecht told The Texas Lawbook in an interview on Aug. 30. “It’s been easier some places than others.”
In Houston, the business court will be operating out of the historic building that currently houses the First and Fourteenth Courts of Appeals. South Texas College of Law Houston has also offered space for the Eleventh Division to use, Chief Justice Hecht said.
In Austin, Chief Justice Hecht said the business court will be operating in space in the William P. Clements Building, which will also house the Fifteenth Court of Appeals.
In Fort Worth, the court will sit at the Texas A&M University School of Law. While some leased office space has been secured in San Antonio, details about what courtroom space will be used are still being worked out.
“Dallas is still undecided as well … but they’ll be able to function on Day One.” he said. “Getting them situated and settled and the equipment in and staff and all of that, it may take a little longer.”
Chief Justice Hecht said he anticipates many of the hearings in the business court will be handled remotely, making it cheaper and easier for business lawyers inside and outside of Texas to litigate in that forum.
“Part of the attraction of the business courts, we hope, will be the easy access,” he said.