AUSTIN – Texans for Lawsuit Reform is hailing the passage of House Bill 40, bipartisan legislation offering further enhancements to the Texas Business Court.
Sponsored by Rep. Brooks Landgraf, HB 40 makes additional enhancements to the business court, a first-of-its-kind specialized trial court in Texas that handles complex business-to-business litigation, and which began operating on Sept. 1, 2024.
“The bipartisan passage of HB 40 is a major victory for the Lone Star State,” said TLR President Lee Parsley. “Establishment of the Texas Business Court in 2024 was a significant investment in Texas’s economic growth and development, creating an efficient process to help streamline the resolution of lengthy and complicated business cases.
“HB 40 builds on this success, and includes enhancements that will unleash the full potential of the Texas Business Court and entice more businesses to relocate and operate in Texas.”
According to TLR, the bills will make additional enhancements to the Texas Business Court by:
* Deleting the provision abolishing the Business Court’s divisions in rural area;
* Reducing the amount-in-controversy requirement for filing a lawsuit in or transferring a case to the Business Court, from $10 million to $5 million;
* Including large insurance disputes (excluding first-party claims) in the Business Court’s jurisdiction;
* Clarifying the Business Court’s “supplemental jurisdiction;” and
* Allowing companies to designate the Business Court in their contracts as the exclusive venue for dispute resolution.
Passage of HB 40 follows the enactment of another critical piece of legislation, SB 29, on May 14.
SB 29 introduces a series of corporate reforms that will make Texas the preferred destination for corporate relocation and reincorporation by codifying the business judgment rule and allowing corporations to establish a minimum ownership threshold before a shareholder or group of shareholders can pursue a derivative claim, among other provisions.
