Nearly two years ago, Texas took a major step toward reinforcing itself as one of the most business-oriented states.

On Sept. 1, 2024, the Texas Business Court and 15th Court of Appeals began hearing cases. The specialized statewide trial court was created to resolve certain complex business disputes, overseen by judges who have experience in such matters. 

By establishing the court, Texas joined the ranks of states like Delaware, with its famed Court of Chancery, which has drawn companies to the area for many decades. 

“For years, money has flowed outside of Texas and into Delaware, New York and Illinois for resolving commercial and corporate disputes and other things like legal opinions, registered agents and filing fees,” said Alex White, shareholder at the Texas-based law firm of Wilson Cribbs + Goren. “Texas is a huge economic engine with a GDP larger than most countries in the world. We should be keeping that money here, and these courts will help.” 

Bisnow spoke with White and attorney Gabriel Segovia to learn more about the Texas Business Court and 15th Court of Appeals and why commercial real estate stakeholders might turn to this system to help settle disputes. 

Bisnow: What are the criteria for the cases that go before the new business courts?

Segovia: There are really two types of cases. The first involves claims regarding a qualified transaction that exceeds $5M in value between parties, and the amount in controversy must be over $5M. 

The second includes claims totaling over $5M for cases regarding internal or corporate governance, derivative proceedings by shareholders, and securities and trade regulations. 

The one caveat is that publicly traded companies are exempt from the $5M threshold, but only for claims involving corporate governance, securities and trade regulation, and internal affairs. 

Bisnow: What are the benefits of handling disputes through the Business Court, and why should CRE stakeholders consider it?

White: Efficiency, speed and experience. The judges are appointed by the governor and confirmed by the state Senate, and they need at least 10 years of experience in those types of cases or significant business transactions to qualify. 

As for speed, you're going to get your case resolved within maybe a year and a half or two years, which should be faster than state district courts. The goal is to have a consistent line of jurisprudence with consistent results that business leaders across the state can rely on. 

Segovia: It’s operating like a concierge judiciary for multiple industries here in Texas, including CRE. The judges are aware that there are nuances to these business disputes, and they understand that these parties want to get back to what they started out to do, which is conducting business transactions and pursuing their personal goals. The judges want to work efficiently to help further that agenda. 

Bisnow: Can you tell me about the 15th Court of Appeals, specifically? 

Segovia: The 15th Court of Appeals is very unique. There are approximately 27 states with current active business courts, but Texas is the only one with a specialized intermediate appellate court over its Business Court. 

In most states, you wrap up in the business court and you would have to go to a supreme court or some other appellate court. With this court of appeals, you're automatically entitled to an appeal in a specialized appellate court with a smaller-niche docket. This provides expertise, predictability and an expedited way to get even more input from the judiciary. 

Bisnow: How has Wilson, Cribbs + Goren been working to help clients utilize the business courts?

White: We’ve been getting the word out that these courts are an option, making sure commercial real estate professionals are aware that this tool exists, and drafting forum selection and venue clauses in contracts related to the Business Court. 

Segovia: As litigators, we’re working with opposing counsel to get these disputes into the Business Court. But even if the other side disagrees, if a lawsuit is filed in a state district court, there are procedures to remove it to the Business Court, similarly to how you would remove to federal court 

Bisnow: How does this new court system tie into broader economic trends we’re seeing, specifically related to corporate relocation and governance? 

White: In my 20-plus years of practice, I’ve seen so many transactions in Texas where the real estate and all the parties are in Texas, with the exception of maybe a lender, but we end up deferring to and using law from other jurisdictions for things like entity formation and choice of law under the contracts. Now that we have this new court, it will hopefully start a trend of letting Texas law govern the transaction and any related disputes so we can stop deepening the pockets of other states. This is consistent with other recent economic events such as the opening of the Texas Stock Exchange and the corporate relocation of ExxonMobil from New Jersey to Texas.

Segovia: Texas has been known as an economic powerhouse with a very robust economic engine, and this just adds a sophisticated judicial infrastructure that businesses can now take advantage of, and it’s continuing to develop. It started out where the claims had to amount to more than $10M, but within a year, they lowered it to $5M, and there are discussions about adding other types of claims or issues to their purview. This is a new legal frontier, and it's fantastic for businesses and Texas.

This article was produced in collaboration between Wilson, Cribbs + Goren and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.