Texas Creates Two New Courts: State Supreme Court Upholds Legislature’s Right to Create Statewide Court of Appeals

The Texas Supreme Court recently released its decision in In re Dallas County, affirming the constitutionality of the newly-created Fifteenth Court of Appeals. The Fifteenth will be a statewide court of appeals with jurisdiction over Texas’s new business court for disputes valued over $10 million and appeals where the State or a State agency or university is a named party.

What is Texas’s New Business Court?

In June 2023, the Texas state legislature’s enactment of House Bill 19 created a new business court with 11 divisions, joining nearly 30 other states that have established specialized business courts.  Five divisions will begin operations on September 1, 2024. 

The Texas business court is a court of limited jurisdiction that is intended to specialize in complex litigation disputes, and matters involving the State, especially challenges to legislation.  The business court can hear original or transferred matters where either (a) a publicly-traded company is a party, or (b) the amount in controversy exceeds $5 million/$10 million, depending on the type of dispute.  The business court’s jurisdiction over eligible disputes is not exclusive; it will hold concurrent jurisdiction alongside district courts and parties may choose to file in or remove to it.  Because the district court is a court of general jurisdiction and the business court is one of limited jurisdiction, the relationship works somewhat like that between state and federal courts.  Jurisdiction in business court must be proven or the case will be dismissed or remanded, as appropriate. 

Many Texas practitioners welcome a new court that will specialize in commercial litigation.  This specialization, however, comes at a cost—literally.  Actions originally filed in the business court incur a $2,637 filing fee; transferred actions incur a $2,500 fee.  Parties will also incur other fees such as for filing motions and actions performed by the clerk.  For comparison, the district court’s civil filing fees range from around $200 to $400, depending on the number of plaintiffs.

Five business court divisions open on September 1, 2024: The First, Third, Fourth, Eighth, and Eleventh.  Governor Abbott has appointed two judges to each of the five soon-to-be operational divisions. 

• First Division (Dallas): Andrea Bouressa(judge of the 471st Judicial District Court; former Local Administrative District Judge for Collin County) and William “Bill” Whitehill (member at Condon Tobin Sladek Thornton Nerenberg PLLC; former justice of the Texas Fifth Court of Appeals);
• Third Division (Austin): Melissa Andrews(partner at Holland & Knight) and Patrick Sweeten (Principal Deputy General Counsel for the Office of the Governor); 
• Fourth Division (San Antonio): Marialyn Barnard(judge of the 73rd Judicial District Court) and Stacy Sharp (owner of Sharp Appellate PLLC and adjunct professor at The University of Texas at Austin);
• Eighth Division (Fort Worth): Jerry Bullard(shareholder at Adams, Lynch & Loftin, P.C.) and Brian Stagner (of counsel/former partner at Kelly Hart & Hallman LLP and adjunct professor at Texas Christian University); and
• Eleventh Division (Houston): Sofia Adrogué(partner at Diamond McCarthy) and Grant Dorfman (Visiting Judge; former judge of the 129th and 334th Judicial Districts).

The remaining six divisions will be abolished unless reauthorized by the Texas legislature during the 2025 legislative session and funded through legislative appropriations.  The business court clerk currently resides in Austin, and the court has not yet launched an e-filing system.

Will this Change Impact My Business? 

Whether your business is impacted by the development of these new courts depends on whether your business engages in high-stakes litigation and/or is a publicly-traded entity.  The large amount-in-controversy serves as a barrier for most disputes and is designed to allow the court to specialize.  Further, because the business court has concurrent jurisdiction with the district courts, not all eligible disputes will be heard in the business court. 

Why is Creation of the Fifteenth Court of Appeals Significant?

The Court’s decision in In re Dallas County held that the legislature had the authority to create a statewide court of appeals, the Fifteenth Court of Appeals.  The Fifteenth has jurisdiction over civil appeals brought by or against the State (including a State university system) and business court disputes valued at more than $10 million.   Creation of the Fifteenth has been largely criticized as a political maneuver; until its creation, actions against the State were heard in the Third Court of Appeals in Austin, where the Texas state capitol sits.  The political makeup of that judicial division has changed dramatically in the last decade, leading to speculation about how challenges to political hot-button issues would be decided.  The first three justices^[1] appointed by Governor Abbott are Republican, fueling criticism from Democrats that the move was to get lawsuits against the State out of Austin’s hands. Republicans retort that matters of statewide import should be decided by justices elected in statewide elections, rather than being localized to a single geographical region.

Texas elects its judges and justices in partisan elections.  Governor Abbott made appointments to the business court and Fifteenth Court of Appeals only because these are new courts.  Each seat will be subsequently subject to election or re-election, with the Fifteenth’s justices up for reelection in 2026.  In the instance of the Fifteenth, the election will be statewide.  Texas has two statewide courts of last resort: the Texas Supreme Court and Texas Court of Criminal Appeals.  Both hold statewide elections and all 18 justices combined ran as Republicans.  This indicates that the Fifteenth is all but guaranteed to remain a panel of three Republicans when the current justices’ initial term expires in 2026.

Do you have a matter you are considering filing in or transferring to Texas’ new business court?  Crowell has experienced commercial litigators here to help.