Texas Business Courts at 18 Months, What Founders, Operators, and Investors Need to Know
Texas Business Courts at 18 Months, What Founders, Operators, and Investors Need to Know
By Hari Nathan Kalyan, Managing Attorney, Warren Kalyan.
Five Key Takeaways
Opinion cadence is rising. 42 opinions in year one and 29 in the first six months of year two. The court has hit cruising altitude and is now producing real merits guidance for Texas commercial law.
HB 40 halved the threshold. Effective September 1, 2025, the amount in controversy threshold dropped from 10 million to 5 million dollars, and a series of related transactions now aggregate. Many more mid market disputes qualify.
IP and trade secrets are in. The court now has express concurrent jurisdiction over actions involving intellectual property ownership, use, licensing, and Texas Uniform Trade Secrets Act claims.
Arbitration authority is clarified. The court can now enforce arbitration agreements, appoint arbitrators, and review awards where the underlying dispute fits within its substantive jurisdiction.
Update your forum clauses. Naming the Business Court in operating agreements, purchase agreements, and commercial contracts puts a specialized commercial judge within reach for future disputes.
When the Texas Business Court opened its doors on September 1, 2024, it was the most significant restructuring of complex business litigation in the state in decades. Eighteen months in, the court is no longer an experiment. It has issued opinions at an accelerating pace, expanded its jurisdiction under House Bill 40, and is starting to look like what its supporters hoped for: a specialized forum where business disputes get heard by judges with deep commercial backgrounds, on a schedule that reflects how businesses actually operate.
For founders, operators, and investors with Texas based companies or contracts, that change matters. Where a dispute is filed, and who hears it, often dictates how long it takes, how much it costs, and how predictable the outcome is. Here is where things stand and what to watch.
What the Business Court Is, in Short
The Texas Business Court is a state level trial court with specialized jurisdiction over complex business and commercial cases. It operates through several divisions covering Dallas, Houston, San Antonio, Austin, and Fort Worth. Cases that fall within its jurisdiction can be filed there or removed there from district court. Judges are appointed by the Governor for two year terms and are selected from candidates with substantial business law experience. Appeals go to a dedicated Fifteenth Court of Appeals.
The basic value proposition has not changed since the rollout. Parties get a judge who already understands LLC governance, fiduciary duty doctrine, M and A documents, indemnification mechanics, and the rest of the substantive law that runs commercial litigation. That is meaningfully different from the experience of the same case in a general jurisdiction district court.
Eighteen Months of Output
The court has been issuing decisions at a rising cadence. In its first year, it issued 42 opinions. In the first six months of its second year alone, it issued 29. Most of the early opinions focused on jurisdictional and procedural questions, which is what you would expect from a brand new specialized court. By late 2025, those questions began giving way to substantive merits rulings, and the early 2026 docket has the feel of a court that has hit cruising altitude.
For practitioners, that mix matters. The procedural rulings are now a real body of guidance on removal timing, amount in controversy calculation, and the supplemental jurisdiction rules that govern when related claims can be heard together. The merits rulings are where Texas commercial law is being shaped by a new generation of judges, and counsel should be tracking that body of work closely.
House Bill 40, A Meaningful Expansion
The biggest structural change to the court since opening came on September 1, 2025, when House Bill 40 took effect. Three changes matter most.
First, the amount in controversy threshold for covered commercial disputes was cut in half, from 10 million to 5 million dollars. The qualified transaction threshold dropped the same way, and the statute now reads transaction to include a series of related transactions, which allows multiple smaller deals to be aggregated to meet the threshold. The practical effect is a substantial expansion of which cases can land in the Business Court. Many partnership disputes, mid market M and A indemnification fights, and operating agreement disputes that previously fell short of the old threshold are now eligible.
Second, intellectual property and trade secrets cases are now expressly within the court's concurrent jurisdiction. Actions arising out of the ownership, use, licensing, lease, installation, or performance of intellectual property can be heard in the Business Court, and trade secret claims under the Texas Uniform Trade Secrets Act now have a dedicated commercial forum. For Texas companies that operate at the intersection of software, branded consumer products, and proprietary processes, this is a significant new option.
Third, the court now has clear jurisdiction over arbitration related actions. It can enforce arbitration agreements, appoint arbitrators, and review arbitral awards where the underlying dispute fits within the Business Court's substantive jurisdiction. That closes a small but recurring gap that had forced parties to bounce between courts during the arbitration life cycle.
What the Recent Decisions Are Telling Us
Two themes from recent decisions are worth flagging.
The first is amount in controversy aggregation. The court has confirmed that because Chapter 25A confers jurisdiction over actions, and an action includes all claims in the lawsuit, the court considers the value of every claim together when assessing the amount in controversy. The removal clock does not start until the cumulative value of the claims crosses the jurisdictional threshold. For defendants in cases that grow over time through amended pleadings, that is a useful clarification.
The second is the court's posture on substantive Texas business law. Early merits opinions have generally been doctrinally careful and well reasoned, which is what most observers hoped for. The early body of work suggests a court that takes the underlying Texas Business Organizations Code, partnership law, and contract doctrine seriously, and that is willing to do the technical work to apply it correctly. For a companion take on how the court is engaging with modern litigation issues, see our post on the court's June 2026 ruling on AI chat log privilege.
Practical Takeaways for Operators and Investors
A few practical points for clients with Texas exposure.
First, factor the Business Court into venue and forum selection clauses. If a future dispute would qualify, naming the Business Court in your operating agreements, asset purchase agreements, and commercial contracts puts a specialized commercial judge within reach. The lower HB 40 thresholds mean many more transactions now qualify.
Second, recognize that complex disputes between business partners, between buyers and sellers of businesses, and between IP owners and licensees can now be funneled into a specialized forum. That changes the calculus on how to prepare, document, and resolve those disputes.
Third, treat the developing opinions as real precedent for transactional drafting. The Business Court's reasoning on indemnification mechanics, fiduciary duty claims, and partnership exit rights will increasingly shape what counts as a clean contract in Texas commercial practice.
A Final Note
The Texas Business Court has gone from rollout to real institution faster than most observers expected. With HB 40 broadening its reach to IP, trade secrets, arbitration, and a much wider range of mid market transactions, the court will play a growing role in how Texas business disputes get resolved.
If you are operating, investing in, or advising a Texas based business, the Business Court should be on your radar. Warren Kalyan is tracking decisions closely and is available to talk through how the court fits into your contracting, dispute strategy, and litigation planning. We serve founders and operators across Austin, corporate structuring, and Dallas.
Considering the Texas Business Court in your dispute or contract strategy?
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General information only, not legal advice for your specific situation.