Bill Text: TX HB1875 | 2021-2022 | 87th Legislature | Comm Sub
Bill Title: Relating to the creation of the business court and the Court of Business Appeals to hear certain cases; authorizing fees.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2021-05-12 - Placed on General State Calendar [HB1875 Detail]
Download: Texas-2021-HB1875-Comm_Sub.html
87R18570 TSS-F | |||
By: Landgraf, Bonnen, Leach, Smith | H.B. No. 1875 | ||
Substitute the following for H.B. No. 1875: | |||
By: Middleton | C.S.H.B. No. 1875 |
|
||
|
||
relating to the creation of the business court and the Court of | ||
Business Appeals to hear certain cases; authorizing fees. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle A, Title 2, Government Code, is amended | ||
by adding Chapter 24A to read as follows: | ||
CHAPTER 24A. BUSINESS COURT AND COURT OF BUSINESS APPEALS | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 24A.001. DEFINITIONS. In this chapter: | ||
(1) "Governing documents" means the instruments, | ||
documents, or agreements adopted under an organization's governing | ||
law to govern the organization's formation and internal affairs. | ||
The term includes: | ||
(A) a certificate of formation, articles of | ||
incorporation, and articles of organization; | ||
(B) bylaws; | ||
(C) a partnership agreement; | ||
(D) a company agreement or operating agreement; | ||
(E) a shareholder agreement; | ||
(F) a voting agreement or voting trust agreement; | ||
and | ||
(G) an agreement among owners restricting the | ||
transfer of ownership interests. | ||
(2) "Governing law" means the law governing the | ||
formation and internal affairs of an organization. | ||
(3) "Governing person" means a person who is entitled, | ||
alone or as part of a group, to manage and direct an organization's | ||
affairs under the organization's governing documents and governing | ||
law. The term includes: | ||
(A) a member of the board of directors of a | ||
corporation or other organization; | ||
(B) a general partner of a general or limited | ||
partnership; | ||
(C) a manager of a limited liability company that | ||
is managed by its managers; | ||
(D) a member of a limited liability company that | ||
is managed by its members; | ||
(E) a trust manager of a real estate investment | ||
trust; and | ||
(F) a trustee of a business trust. | ||
(4) "Governmental entity" means: | ||
(A) the state; or | ||
(B) a political subdivision of the state, | ||
including a municipality, a county, or any kind of district. | ||
(5) "Internal affairs" means: | ||
(A) the rights, powers, and duties of an | ||
organization's governing persons, officers, owners, and members; | ||
and | ||
(B) matters relating to the organization's | ||
membership or ownership interests. | ||
(6) "Officer" means a person elected, appointed, or | ||
designated as an officer of an organization by the organization's | ||
governing persons or the organization's governing documents. | ||
(7) "Organization" means a foreign or domestic entity | ||
or association, regardless of whether for profit or nonprofit. The | ||
term includes: | ||
(A) a corporation; | ||
(B) a limited partnership; | ||
(C) a general partnership; | ||
(D) a limited liability partnership; | ||
(E) a limited liability company; | ||
(F) a business trust; | ||
(G) a real estate investment trust; | ||
(H) a joint venture; | ||
(I) a joint stock company; | ||
(J) a cooperative; | ||
(K) a bank; | ||
(L) a credit union; | ||
(M) a savings and loan association; | ||
(N) an insurance company; and | ||
(O) a series of a limited liability company or of | ||
another entity. | ||
(8) "Owner" means an owner of an organization. The | ||
term includes: | ||
(A) a shareholder or stockholder of a corporation | ||
or other organization; | ||
(B) a general or limited partner of a partnership | ||
or an assignee of a partnership interest in a partnership; | ||
(C) a member of, or an assignee of a membership | ||
interest in, a limited liability company; and | ||
(D) a member of a nonprofit organization. | ||
(9) "Ownership interest" means an owner's interest in | ||
an organization, including an owner's economic, voting, and | ||
management rights. | ||
SUBCHAPTER B. BUSINESS COURT | ||
Sec. 24A.051. JURISDICTION. (a) The business court has | ||
civil jurisdiction concurrent with district courts in: | ||
(1) a derivative action on behalf of an organization; | ||
and | ||
(2) an action in which the amount in controversy | ||
exceeds $10 million, excluding interest, statutory damages, | ||
exemplary damages, penalties, attorney's fees, and costs, that | ||
arises against, between, or among organizations, governing | ||
authorities, governing persons, members, or owners, relating to a | ||
contract transaction for business, commercial, investment, | ||
agricultural, or similar purposes. | ||
(b) The business court has statewide jurisdiction of an | ||
action described in Subsection (a) and all matters arising out of or | ||
related to an action described in Subsection (a). | ||
(c) The business court may grant any relief available in a | ||
district court. | ||
(d) Notwithstanding Subsections (a) and (b), the business | ||
court: | ||
(1) does not have jurisdiction of a civil | ||
action brought by or against a governmental entity, unless the | ||
governmental entity invokes or consents to the jurisdiction of the | ||
business court; and | ||
(2) must sever any claim in which a party seeks | ||
recovery of monetary damages for personal injury or death or any | ||
claim arising under Chapter 17, Business & Commerce Code, the | ||
Estates Code, the Family Code, or Title 9, Property Code, unless all | ||
parties and a judge of the business court agree that the claim may | ||
proceed in the business court. | ||
(e) If a claim is severed as provided by Subsection (d)(2), | ||
the business court has discretion to stay or abate its own | ||
proceedings pending resolution of the severed claim. | ||
Sec. 24A.052. INITIAL FILING; REMOVAL AND REMAND; TRANSFER. | ||
(a) An action in the jurisdiction of the business court may be | ||
filed in the business court. If the business court does not have | ||
subject matter jurisdiction of the action, or part of the action, | ||
the court shall dismiss without prejudice to refiling the whole or | ||
part of the action. A claim that is dismissed under this subsection | ||
may be refiled in a court with jurisdiction by the party who filed | ||
the claim in the business court not later than the 30th day after | ||
the date the claim was dismissed by the business court, | ||
notwithstanding the expiration of a period of limitation provided | ||
by statute. | ||
(b) A party to an action filed in a district court or county | ||
court at law that is in the subject matter jurisdiction of the | ||
business court may remove the action to the business court by filing | ||
a notice of removal with the business court and the court in which | ||
the action was originally filed. If the business court does not | ||
have jurisdiction of the action or part of the action, the business | ||
court shall remand the action, or the part in which the business | ||
court does not have jurisdiction, to the court from which the action | ||
was removed. A party may appeal an interlocutory order of the | ||
business court that grants or refuses a remand under this | ||
subsection to the Court of Business Appeals. | ||
(c) Removal of a case to the business court is not subject to | ||
the statutes or rules governing the due order of pleading. | ||
(d) Removal of a case does not waive a defect in venue or | ||
constitute an appearance to determine personal jurisdiction. | ||
(e) Any claim in which the business court does not have | ||
jurisdiction as provided by Section 24A.051(d) must be transferred | ||
to a district court in a county in which the claim could have been | ||
originally filed. If the claim could have been filed in more than | ||
one county, the party bringing the claim may elect the county to | ||
which the claim is transferred. | ||
(f) A cause of action filed in the business court shall be | ||
assigned to the docket of a judge on a rotating basis. | ||
(g) The supreme court shall promulgate rules of civil | ||
procedure providing for the timely and efficient removal and remand | ||
of cases to and from the business court. | ||
Sec. 24A.053. POWERS AND DUTIES. (a) The business court may | ||
issue any writ necessary for the enforcement of the court's | ||
jurisdiction, including a: | ||
(1) writ of injunction; | ||
(2) writ of mandamus; | ||
(3) writ of sequestration; | ||
(4) writ of attachment; | ||
(5) writ of garnishment; and | ||
(6) writ of supersedeas. | ||
(b) The business court may answer a question regarding a | ||
matter in the court's jurisdiction that is certified to the | ||
business court by another court. | ||
Sec. 24A.054. QUALIFICATIONS OF JUDGE. A judge of the | ||
business court must be: | ||
(1) at least 35 years of age; | ||
(2) a United States citizen; | ||
(3) a resident of this state for at least two years | ||
before appointment; and | ||
(4) a licensed attorney in this state and have 10 or | ||
more years of experience in: | ||
(A) practicing complex civil business | ||
litigation; | ||
(B) practicing business transaction law; | ||
(C) teaching courses in complex civil business | ||
litigation or complex business transaction law at an accredited law | ||
school in this state; | ||
(D) serving as a judge of a court in this state | ||
with civil jurisdiction; or | ||
(E) any combination of activities described by | ||
Paragraphs (A)-(D). | ||
Sec. 24A.055. COMPOSITION OF COURT. (a) The governor, with | ||
the advice and consent of the senate, shall appoint seven judges to | ||
serve the business court. | ||
(b) A judge of the business court may be reappointed. | ||
(c) The governor may not appoint: | ||
(1) more than three judges who reside in the same | ||
county; or | ||
(2) more than a majority of judges associated with the | ||
same political party. | ||
Sec. 24A.056. TERMS OF OFFICE. A judge of the business | ||
court serves a two-year term. | ||
Sec. 24A.057. VACANCY. If a vacancy occurs on the business | ||
court, the governor, with the advice and consent of the senate, | ||
shall appoint, in the same manner as the original appointment, | ||
another person to serve for the remainder of the unexpired term. | ||
Sec. 24A.058. JUDICIAL AUTHORITY. A judge of the business | ||
court has all powers, duties, immunities, and privileges of a | ||
district judge. | ||
Sec. 24A.059. JUDGE'S SALARY. (a) A judge of the business | ||
court shall be paid a total annual salary from the state that is the | ||
sum of: | ||
(1) the salary paid to a district judge by the state | ||
under Section 659.012; and | ||
(2) the maximum amount of county contributions and | ||
supplements allowed by law to be paid to a district judge under | ||
Section 659.012. | ||
(b) The salary shall be paid in equal monthly installments. | ||
Sec. 24A.060. REMOVAL; DISQUALIFICATION AND RECUSAL. (a) | ||
A judge of the business court may be removed from office in the same | ||
manner and for the same reasons as a district judge. | ||
(b) A judge of the business court is disqualified or shall | ||
recuse himself or herself in a particular case for the same reasons | ||
as a district judge. Disqualification or recusal of a judge of the | ||
business court shall be governed by the same procedure as | ||
disqualification or recusal of a district judge. | ||
Sec. 24A.061. PRIVATE PRACTICE OF LAW. A judge of the | ||
business court shall diligently discharge the duties of the office | ||
on a full-time basis and may not engage in the private practice of | ||
law. | ||
Sec. 24A.062. VISITING JUDGE. (a) A retired or former | ||
judge or justice may be assigned as a visiting judge of the business | ||
court by the chief justice of the supreme court. A visiting judge | ||
of the business court is subject to objection, disqualification, or | ||
recusal in the same manner as a retired or former judge or justice | ||
is subject to objection, disqualification, or recusal if appointed | ||
as a visiting district judge. | ||
(b) A visiting judge must meet the qualifications of a judge | ||
of the business court as provided by Section 24A.054. | ||
(c) Before accepting an assignment as a visiting judge of | ||
the business court, a retired or former judge or justice shall take | ||
the constitutional oath of office required of appointed officers of | ||
this state and file the oath with the supreme court. | ||
Sec. 24A.063. JURY PRACTICE AND PROCEDURE. (a) A party in | ||
an action pending in the business court has the right to a trial by | ||
jury when required by the constitution. | ||
(b) A jury trial shall be held in a county in which venue | ||
would be found under Section 15.002, Civil Practice and Remedies | ||
Code. | ||
(c) Subject to Subsection (b), a jury trial in a case | ||
removed to the business court shall be held in the county in which | ||
the action was originally filed. | ||
(d) Subject to Subsection (b), a jury trial in a case filed | ||
initially in the business court shall be held in any county in which | ||
it could have been filed under Section 15.002, Civil Practice and | ||
Remedies Code, as chosen by the plaintiff. | ||
(e) The parties and the judge of the business court may | ||
agree to hold the jury trial in any other county. A party may not be | ||
required to agree to hold the jury trial in a different county. | ||
(f) The drawing of jury panels, selection of jurors, and | ||
other jury-related practice and procedure in the business court | ||
shall be the same as for the district court in the county in which | ||
the trial is held. | ||
(g) Practice, procedure, rules of evidence, issuance of | ||
process and writs, and all other matters pertaining to the conduct | ||
of trials, hearings, and other business in the business court are | ||
governed by the laws and rules prescribed for district courts, | ||
unless otherwise provided by this chapter. | ||
(h) The business court may adopt rules of practice, which | ||
must be approved by the supreme court. | ||
Sec. 24A.064. COURT LOCATION; STAFFING. (a) The business | ||
court shall have a clerk, whose office shall be located in Travis | ||
County in facilities provided by the state. The clerk shall: | ||
(1) receive all filings in the business court; and | ||
(2) fulfill the legal and administrative functions of | ||
a district clerk and an appellate court clerk. | ||
(b) Each judge of the business court shall maintain chambers | ||
in the county seat of the judge's county of residence in facilities | ||
provided by the state. | ||
(c) Subject to Section 24A.063, the business court, or any | ||
judge of the business court, may hold court at any location in the | ||
state, as the court determines is necessary or convenient for a | ||
particular civil action. | ||
(d) The business court shall use the most advanced | ||
technology feasible when necessary and appropriate to facilitate | ||
expeditious proceedings in matters brought before the court. As | ||
determined by the business court, counsel and parties may appear | ||
before the business court by means of Internet-based or other | ||
technological devices rather than in person. | ||
(e) In a county in which the business court sits, the | ||
sheriff shall in person or by deputy attend the business court as | ||
required by the court. The sheriff or deputy is entitled to be | ||
reimbursed by the state for the cost of attending court. | ||
(f) Subject to any limitations provided by the General | ||
Appropriations Act, the business court may appoint personnel | ||
necessary for the operation of the court, including: | ||
(1) the clerk of the court; | ||
(2) staff attorneys for the court; | ||
(3) staff attorneys for each judge of the business | ||
court; | ||
(4) court coordinators; and | ||
(5) administrative assistants. | ||
(g) The court officials shall perform the duties and | ||
responsibilities of their offices and are entitled to the | ||
compensation, fees, and allowances prescribed by law for the | ||
offices. | ||
Sec. 24A.065. FEES. The business court shall provide rates | ||
for fees associated with filings and actions in the business court. | ||
The fees shall be set at a sufficient amount to cover the costs of | ||
administering the provisions of this chapter, taking into account | ||
fee waivers in the interest of justice. | ||
Sec. 24A.066. SEAL. The seal of the business court is the | ||
same as that provided by law for a district court except that the | ||
seal must contain the name "The Business Court of Texas." | ||
SUBCHAPTER C. COURT OF BUSINESS APPEALS | ||
Sec. 24A.101. JURISDICTION; APPEAL. (a) The Court of | ||
Business Appeals has exclusive jurisdiction over an appeal from an | ||
order or judgment of the business court. | ||
(b) An appeal from an order or judgment of the business | ||
court is available in the same manner as an appeal from an order or | ||
judgment of a district court. | ||
(c) The procedure governing an appeal from an order or | ||
judgment of a business court is the same as an appeal from an order | ||
or judgment of a district court. | ||
Sec. 24A.102. COURT OF BUSINESS APPEALS; COMPOSITION. (a) | ||
The governor, with the advice and consent of the senate, shall | ||
appoint seven justices to serve as the Court of Business Appeals. | ||
(b) A justice of the Court of Business Appeals must meet the | ||
qualifications of a judge of the business court as provided by | ||
Section 24A.054. | ||
(c) A justice of the Court of Business Appeals may be | ||
appointed to two or more consecutive terms. | ||
Sec. 24A.103. CHIEF JUSTICE. The governor shall designate | ||
one of the seven justices appointed under Section 24A.102 as the | ||
chief justice of the Court of Business Appeals. | ||
Sec. 24A.104. TERM OF OFFICE. A justice of the Court of | ||
Business Appeals shall serve a two-year term. | ||
Sec. 24A.105. VACANCY. If a vacancy occurs on the Court of | ||
Business Appeals, the governor, with the advice and consent of the | ||
senate, shall appoint, in the same manner as the original | ||
appointment, another person to serve for the remainder of the | ||
unexpired term. | ||
Sec. 24A.106. JUDICIAL AUTHORITY. A justice of the Court of | ||
Business Appeals has all powers, duties, immunities, and privileges | ||
as a court of appeals justice. | ||
Sec. 24A.107. PANEL. The justices appointed to the Court of | ||
Business Appeals shall sit in randomly selected panels of three to | ||
hear and determine appeals from the business court. | ||
Sec. 24A.108. LOCATION. The justices hearing appeals from | ||
the business court may sit in any convenient place to hear the | ||
appeal. | ||
Sec. 24A.109. JUDGMENT. The Court of Business Appeals | ||
shall render judgments and issue opinions in the same manner as any | ||
other court of appeals under Chapter 22. | ||
Sec. 24A.110. REVIEW. (a) A party may seek an en banc | ||
review of a decision of a panel of the Court of Business Appeals. | ||
(b) A party to an order or judgment of the business court or | ||
the Court of Business Appeals may file a petition for review in the | ||
supreme court in the same manner and circumstances as a party to an | ||
order or judgment of a district court or court of appeals. | ||
Sec. 24A.111. CLERK. The clerk of the business court shall | ||
serve as the clerk of the Court of Business Appeals. | ||
Sec. 24A.112. COMPENSATION. A justice of the Court of | ||
Business Appeals shall receive compensation equal to that of the | ||
chief justice of a court of appeals, including the maximum amount of | ||
local contributions. | ||
Sec. 24A.113. SEAL. The seal of the Court of Business | ||
Appeals is the same as that provided by law for a court of appeals | ||
except that the seal must contain the name "The Court of Business | ||
Appeals of Texas." | ||
SECTION 2. (a) As soon as practicable after the effective | ||
date of this Act, the governor shall appoint judges to the business | ||
court, as required by Section 24A.055, Government Code, as added by | ||
this Act. | ||
(b) As soon as practicable after the effective date of this | ||
Act, the governor shall appoint justices to the Court of Business | ||
Appeals, as required by Section 24A.102, Government Code, as added | ||
by this Act. | ||
SECTION 3. The changes in law made by this Act apply to | ||
civil actions commenced on or after January 1, 2022. | ||
SECTION 4. (a) The Supreme Court of Texas has exclusive and | ||
original jurisdiction over a challenge to the constitutionality of | ||
this Act or any part of this Act and may issue injunctive or | ||
declaratory relief in connection with the challenge. | ||
(b) If the appointment of judges by the governor to the | ||
business court under Section 24A.055, Government Code, as added by | ||
this Act, is held by the Supreme Court of Texas as unconstitutional, | ||
the business court shall be staffed by sitting or retired judges who | ||
are appointed by the supreme court. | ||
(c) If the appointment of a justice by the governor to the | ||
Court of Business Appeals under Section 24A.102, Government Code, | ||
as added by this Act, is held by the Supreme Court of Texas as | ||
unconstitutional, the Court of Business Appeals shall be staffed by | ||
sitting or retired justices who are appointed by the supreme court. | ||
SECTION 5. This Act takes effect September 1, 2021. |