The Texas Legislature in 2023 created its first Business Court, making Texas the 31st state to establish a specialized court to adjudicate complex business disputes. The Business Court is divided into 11 divisions encompassing all Texas counties and corresponding to the state's administrative judicial districts. The Business Court officially "opened for business" on Sept. 1, 2024. Since then, it has handled only 80 cases statewide.
Presumably to increase the volume of complex cases heard by the Texas Business Court, the Texas Legislature passed House Bill 40 (HB 40) on May 13, 2025, dramatically expanding the Business Court's authority. HB 40, sponsored by Rep. Brooks Landgraf (R-Odessa), among other things, amends the existing statute as follows:
- Judge appointments for the remaining six divisions of the Business Court, along with the appointment of additional judges in the First and Eleventh court divisions, will be made.
- The amount in controversy requirements for "qualified transactions" is reduced from $10 million to $5 million.
- The amount in controversy for jurisdictional purposes is assessed as the total amount of all joined parties' claims.
- The Business Court will not decide claims related to a consumer transaction, as defined by Section 601.001 of the Texas Business and Commerce Code.
- A party's governing documents may establish venue.
- The Business Court may enforce an arbitration agreement, appoint an arbitrator or review an arbitral award regardless of the amount in controversy if the claim is otherwise within the court's jurisdiction.
- The Business Court has jurisdiction over trade secret disputes and a broader range of intellectual property disputes.
- A number of provisions of state law currently referencing only district courts will now also reference the Business Court.
- Any actions commenced on or before Sept. 1, 2024, that are within the jurisdiction of a Business Court division may be transferred to and heard by the Business Court on a motion of a party.
The bill further integrates the Business Court (created in 2023 by House Bill 19) into the state judicial structure by, among other things, amending the Texas Civil Practice and Remedies Code to ensure legal procedures such as interlocutory appeals, recusal processes and document handling apply equally to the Business Court as they do in district and county courts. Business Court judges will also be subject to the same standards as district and county judges, including with respect to recusal and appellate requirements.
Sen. Bryan Hughes (R-Mineola) sponsored the bill's Senate version, Senate Bill 2883, which was passed. If signed by Gov. Greg Abbott, the bill will become effective on Sept. 1, 2025. Abbott has applauded HB 40's passage, saying it "strengthens the Texas business courts and helps keep Texas the #1 state in the nation to do business."
Upon Abbott's signature, the bill's comprehensive statutory updates will formally incorporate the Business Court across the civil justice system, maintaining consistency in procedural protections and access for litigants.
