The Commercial Litigation Landscape in Texas

Texas has entered a new era in commercial litigation with the institution of the Texas Business Court (the “Business Court”), which has now been operational for a year.

The Business Court currently operates across five divisions: the First Division in Dallas, the Third Division in Austin, the Fourth Division in San Antonio, the Eighth Division in Fort Worth and the Eleventh Division in Houston. Appeals from these divisions are exclusively heard by the Fifteenth Court of Appeals, located in Austin. These divisions serve the state’s largest commercial hubs, and all five cities rank among the 15 most populous in the United States – underscoring the placement and purpose of the Business Court. In the short year it has been operational, the Business Court has seen over 200 cases filed, with Houston leading in volume, followed by Dallas.

During the 2025 Texas legislative session, the Texas Government Code and Texas Business Organizations Code were amended to expand the Business Court’s jurisdiction and modernise the state’s corporate law provisions to position Texas as a leader in corporate law.

The Business Court’s civil jurisdiction is defined in Chapter 25A of the Texas Government Code. For commercial litigation disputes, the Business Court’s jurisdiction has been expanded through a series of reforms effective 1 September 2025, including the following.

• The Business Court’s threshold for amount in controversy requirement has been lowered for qualified transactions from USD10 million to USD5 million (Tex. Gov’t Code § 25A.004(d)).
• Recent amendments have broadened the definition of qualified transactions to mean a transaction or “series of related transactions” in which the aggregate value meets the amount in controversy, which is now USD5 million (Tex. Gov’t Code § 25A.001(14)).
• The Business Court can now hear actions arising out of or related to “ownership, use, licensing, lease, installation, or performance of intellectual property”, which includes “computer software, software applications, information technology and systems, data and data security, pharmaceuticals, biotechnology products, and bioscience technologies” (Tex. Gov’t Code § 25A.004(d)(4)). This also includes trade secrets as defined by the Texas Uniform Trade Secrets Act (Tex. Gov’t Code § 25A.004(d)(4)(B)).
• The amendments also grant the Business Court concurrent jurisdiction with district courts to “enforce an arbitration agreement, appoint an arbitrator, or review an arbitral award, or in other judicial actions authorized by an arbitration agreement” (Tex. Gov’t Code § 25A.004(d-1)).

Many Business Court opinions focus on meeting the jurisdictional threshold. Texas’s new Business Court is still in its infancy. Substantive law will come later – once more cases reach judgment – but procedural rulings issued in 2025 are quietly establishing the playbook for jurisdiction, pleading and drafting strategy. For Texas businesses and investors, those threshold decisions matter most right now: they determine which court will hear the case and how parties can structure transactions to qualify for this special forum. Even modest procedural orders are being studied closely for guidance on how to access the Business Court’s docket.

Since the Business Court’s lower jurisdictional threshold did not take effect until 1 September 2025, some opinions reviewed here still apply the prior threshold. However, the opinions shed light on the Business Court’s interpretation of jurisdictional requirements as applied to complex and analysis-specific cases.

The Business Court’s early decisions involving commercial real estate, oil and gas, and healthcare reflect the diverse and growing Texas economy and the structure of the state’s deal flow. As these industries continue to drive business activity across Texas’s largest cities, they are likewise shaping the contours of Texas’s emerging commercial jurisprudence.

The Impact of the Business Court on Real Estate Litigation in Texas

Modest procedural orders are being studied closely for guidance on how to access the Business Court’s docket. Guidance arrives amid one of the most volatile real estate climates in decades. Over the past 24 months, the commercial property market has faced surging borrowing costs, rising operating expenses and eroding asset values. Developers now confront maturity defaults, valuation disputes and contentious loan workouts.

In Texas, those pressures intersect with an especially active market: Dallas–Fort Worth (DFW) remains one of the largest commercial-real estate hubs in the country. The convergence of market strain and a new specialised forum means that jurisdictional rulings today may set the tone for years of property-related litigation.

Early jurisdictional guidance

Atlas was one of the first Business Court opinions to interpret the term “qualified transaction” under Government Code § 25A.001(14) (Atlas IDF, LP v NexPoint Real Est. Partners, LLC, 2025 Tex. Bus. 16, 715 S.W.3d 390 (1st Div.)). The case involved enforcement of two promissory notes assigned through a purchase-and-sale agreement. Judge Whitehill held that the action “arose out of” that assignment – a qualified transaction – because Atlas would not have its claim but for that deal. He adopted a broad “but-for” causation standard rather than a narrow proximate-cause test, aligning with Texas Supreme Court precedent addressing similar contract provisions in the forum selection and arbitration context.

The Business Court also clarified two important measurement rules: first, the USD10 million aggregate value requirement is gauged at the time of the transaction, not at the time of litigation; and second, “interest” excluded from the amount-in-controversy calculation refers only to accessory or statutory interest, not to contractual interest that forms part of the claim itself. That interpretation pushed the case above the USD10 million jurisdictional threshold. Atlas therefore stands as the first clear roadmap for real estate debt and assignment litigation to qualify for Business Court jurisdiction.

Chaudhry came from a Dallas apartment development that restructured its investors as costs rose (Chaudhry v Stillwater Cap. Investments, LLC, 2025 Tex. Bus. 31, 2025 WL 2322370, (1st Div.)). The plaintiff, an early investor, alleged fiduciary breaches and fraud, as development costs mounted and his possibility of making a return shrank. The opinion addressed both removal mechanics and the court’s original jurisdiction under § 25A.004(b). Judge Whitehill held that removal by a single defendant suffices; other defendants need not file separate consents. More importantly, the court explained that the amount-in-controversy threshold applies to the case as a whole, including counterclaims, rather than claim by claim.

The facts – a USD58 million planned urban development financed by a USD48 million construction loan and layered ownership entities – mirror how many modern real estate projects are structured. In Chaudhry, the Business Court signalled that complex development disputes will likely qualify for Business Court treatment even when pleaded through multiple entities and overlapping claims.

Takeaways from these early decisions

The first wave of cases confirms that the Business Court is reading Chapter 25A pragmatically. Similarly, transactional lawyers should take the time to craft their dealings to fit into the Business Court’s jurisdiction. They can do this in a few different ways.

• First, include an opt-in clause: Section 25A.004(d) allows parties to contract into the Business Court for transactions exceeding USD5 million. Forum selection provisions in purchase agreements, limited liability company (LLC) operating agreements and loan documents should expressly designate the Business Court as the agreed forum.
• Second, consider the documents: Parties should ensure that the value of a transaction is traceable and quantifiable. The clearer the paper trail, the easier it is to demonstrate a “qualified transaction”.
• Third, preserve the record for opinions: Under Texas Rule of Civil Procedure 360, the parties can request written opinions on dispositive rulings, and the Court is required to write an opinion if it is on an issue important to the jurisprudence of the state.

Texas’s Business Court is arriving at a moment when commercial real estate disputes are poised to multiply. Shrinking valuations and tighter credit conditions will drive litigation between borrowers, sponsors and lenders. The DFW metroplex – with its concentration of development loans and private equity sponsors – will generate much of that docket. The Business Court’s specialised judges, written opinion requirement and focus on complex transactions position it to become a preferred venue for these disputes.

The Impact of the Business Court on Oil and Gas Litigation in Texas

Historically, many oil and gas cases in Texas have been handled in district courts in rural counties, where judges manage diverse dockets and may lack specialisation in high-stakes commercial disputes. Often, these judges carry heavy caseloads across dockets in multiple counties. With the institution of the Business Court for certain high-value disputes, many oil and gas companies have taken advantage of the new forum. The institution of the Business Court offers an avenue for increased efficiency for large-scale disputes; whereas such a dispute may have taken several years to reach resolution in busy district court, the process will likely be shortened significantly through the Business Court.

Of the early opinions published by the Business Court, a significant portion arise out of an energy-related dispute. The majority of early energy-related opinions come from the Eleventh Division in Houston, Eighth Division in Fort Worth and First Division in Dallas, reflecting the concentration of the oil and gas industry across these cities. While only five divisions of the Business Court are operational, several of the ten sitting judges have oil and gas experience. Therefore, litigants may opt to adjudicate energy-related claims in the Business Court because the judges have a deeper background or expertise in the technical nature of oil and gas disputes. Companies may also be attracted to filing claims in the Business Court based on the promise of efficiency to resolve claims that slow business operations in the oil and gas field.

Early jurisdictional guidance

In Slant Operating, the Business Court held that Plaintiff Slant Operating, LLC (“Slant”) pleaded sufficient facts to establish jurisdiction under both the amount in controversy and qualified transaction requirements (Slant Operating, LLC v Octane Energy Operating, LLC, 717 S.W.3d 409 (Tex. Bus. Ct. 2025)). Slant and Octane Energy Operating, LLC (“Octane”) had entered a Letter Agreement involving reciprocal waivers for “off-lease penetration point” permit applications. Initially, Slant filed suit in Texas district court, alleging Octane’s refusal to permit drilling in a designated section breached the waiver and agreement, causing Slant to lose millions in anticipated revenue.

After non-suiting in district court, Slant refiled in the Business Court and argued that the waiver, barring any objections to all future off-lease drilling, constituted a qualified transaction exceeding USD10 million. The Business Court agreed, finding the waivers formed a single contract valued over USD10 million – even though the precise amount could not be determined. Further, the Business Court found that Octane presented no evidence disputing the valuation, therefore emphasising the fact-specific inquiry required to prove the amount in controversy.

In contrast, in Black Mountain SWD, the Business Court remanded a breach of contract case to Texas district court because the amount in controversy did not meet the statutory threshold (Black Mountain SWD, LP v NGL Water Sols. Permian, LLC, 718 S.W.3d 281 (Tex. Bus. Ct. 2025)). Black Mountain SWD LP (“Black Mountain”) alleged that NGL Water Solutions Permian LLC (“NGL Permian”) underpaid royalties on barrels of transported saltwater in breach of an existing royalty agreement. NGL Permian removed the case to the Business Court without Black Mountain’s consent. In response, Black Mountain argued removal was improper because it sought only past-due royalties, which did not meet the jurisdictional threshold. The Court agreed and concluded that the amount in controversy was limited to past damages tied to unpaid barrels, and on that record, would not exceed the USD10 million requirement.

The Business Court has also transferred cases to state court when the venue is improper. In another case involving NGL Permian, the Eleventh Division granted the defendants’ motion to transfer to Loving County, Texas because the crux of the dispute concerned real property under Tex. Civ. Prac. & Rem. Code § 15.011 – overriding a venue provision contained in the parties’ shut-in agreement (NGL Water Sols. Permian, LLC v Lime Rock Res. V-A, L.P., No 25-BC11B-0005, 2025 WL 1445867 (Tex. Bus. Ct. May 20, 2025)). As such, companies should be aware that transfers may be appropriate where claims are better suited for state courts.

Efficient resolution of claims

Recent developments in the resolution of Primexx Energy Opportunity Fund, LP, et al. v Primexx Energy Corporation, highlight the Business Court’s capacity to expedite complex energy-related disputes (Primexx Energy Opportunity Fund, LP v Primexx Energy Corp., 709 S.W.3d 619 (Tex. Bus. Ct. 2025), reconsideration denied, 713 S.W.3d 416 (Tex. Bus. Ct. 2025)). After years of the litigation pending in state and federal court, the case was resolved within a year of filing in the First Division. Limited partner plaintiffs, Primexx Energy Opportunity Fund LP and Primexx Energy Opportunity Fund II, alleged breaches of fiduciary duty and contract against the managing general partner, Primexx Energy Corporation, and the controlling partner, BPP HoldCo LLC (“HoldCo”), a Blackstone-affiliated entity. The plaintiffs claimed HoldCo misused its drag-along rights to compel the sale of the limited partnership to Callon Petroleum Company.

In granting the defendants’ motions for summary judgment, the First Division reinforced Texas’s commitment to freedom of contract – within the bounds of public policy – as a “sacred right”, signalling the Business Court’s willingness to enforce parties’ negotiated terms to the fullest extent permitted by law. For oil and gas litigants, Primexx reinforces the primacy of contractual terms in complex transactions.

The Impact of the Texas Business Court on Healthcare Litigation in Texas

By design, the Business Court cannot hear some of the most common types of cases affecting the medical field. Claims under the Texas Medical Liability Act (TMLA) – Chapter 74 of the Texas Civil Practice and Remedies Code – are statutorily excluded from the Business Court’s jurisdiction (Tex. Gov’t Code § 25A 004(h)(1)). Medical malpractice suits are the foremost example of such claims, but they are not the only example.

Notably, the TMLA has a broad definition of “health care liability claims” that covers causes of action against any healthcare provider for a “claimed departure from accepted standards of medical care, or health care, or safety or professional or administrative services directly related to health care” (Tex. Civ. Prac. & Rem. Code § 74.001(a)(13)). As a result, the TMLA can apply to causes of action that may not seem like conventional medical malpractice. For example, in Collin Creek Assisted Living Center, Inc. v Faber, the Texas Supreme Court held that a lawsuit arising out of an injury to a resident of an assisted living facility qualified as a healthcare liability claim (671 S.W.3d 879, 884 (2023)). These types of cases cannot be heard by the Business Court, not even through supplemental jurisdiction. Likewise, personal injury lawsuits, which often involve medical expert testimony, are wholly excluded (Tex. Gov’t Code § 25A.004(h)(2)).

Healthcare enforcement actions also fall outside the Business Court’s purview. These claims typically include a government agency as a party, and the Business Court does not have jurisdiction over civil claims “brought by or against a governmental entity” (Tex. Gov’t Code § 25A. 004(g)(1)(A)). For example, the Texas Office of the Attorney General handles Medicaid fraud claims arising out of the Texas Health Care Program Fraud Prevention Act (formerly known as the “Texas Medicaid Fraud Prevention Act”). Licensing and sanctions disputes involve state entities such as the Texas Medical Board. And it is hard to envision an enforcement action that would meet the prerequisites for the Business Court’s supplemental jurisdiction. Moreover, False Claims Act cases, which frequently involve medical providers, cannot be removed to the Business Court because they involve a federal statute and are litigated in federal court.

Early jurisdictional guidance

On the other hand, enforcement actions often generate ancillary litigation among private parties. The Business Court recently decided one such case involving investors in a laboratory management and diagnostic services company (Riverside Strategic Cap. Fund I, L.P. v CLG Investments, LLC, 2025 Tex. Bus. 35, No 25-BC01B-0006 (1st Div.) (September 17, 2025)). The plaintiffs sued the defendants over alleged misrepresentations in a securities purchase agreement about the lab company’s compliance with applicable laws (id at *1). The basis for the allegations included two Medicare payment suspensions, a qui tam lawsuit and a criminal investigation (id at *2–*4). The Business Court granted summary judgment for the defendants, finding that the four-year statute of limitations period had run on the plaintiffs’ claims (id at *9).

The Riverside case illustrates how the Business Court will focus on the commercial rather than the clinical side of medicine. Joint ventures involving healthcare providers are one business arrangement that may benefit from the Business Court’s efficiencies. Management services organisations are another example. Hospital staffing, leasing and services agreements are also subjects of contract disputes and tortious interference claims. For complex transactions, providers may consider forum selection clauses stipulating the venue in the Business Court, as long as the amount in controversy requirements are met.

In addition, the recent amendments discussed above should broaden the Business Court’s applicability to the healthcare field in two key ways.

• First, the changes to the amount in controversy requirements should bring more healthcare-related disputes similar to Riverside before the Business Court.
• Second, identifying “pharmaceuticals, biotechnology products, and bioscience technologies” as examples of intellectual property will appeal to the pharmaceutical industry. And other ancillary services providers, such as medical device manufacturers and distributors, may consider the Business Court for trade secret disputes – for example, over customer lists or the misuse of confidential information related to specialised products. Given the importance of these sectors to modern medicine, these new provisions should attract companies in the healthcare space to the Business Court.

Looking Ahead: The Role of the Business Court and Strategic Implications

With more cases testing the expanded jurisdictional framework, the Business Court is poised to deliver practical guidance across the sectors that power Texas’s economy and solidify its role as a national business hub. As Texas continues to attract more companies to reincorporate, invest and transact in the state, the Business Court is set to generate a significant body of new jurisprudence at a rapid pace. In turn, Texas corporate law may emerge as an authoritative source on issues of corporate governance, high-value transactions and sector-specific issues, as parties seek transparent and reasoned outcomes in business disputes. The state’s business-friendly legislative posture combined with the concentration of commercial activity creates the conditions necessary for the Business Court’s jurisprudence to influence not just Texas, but corporate law across the country.