Bill Text: TX HB4149 | 2019-2020 | 86th Legislature | Introduced


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 1-0)

Status: (Introduced) 2019-04-08 - Left pending in committee [HB4149 Detail]

Download: Texas-2019-HB4149-Introduced.html
  86R15747 CAE-F
 
  By: Leach H.B. No. 4149
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  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
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 24A.001.  DEFINITIONS.  In this chapter:
               (1)  "Controlling person" means a person who directly
  or indirectly controls a governing person, officer, or
  organization.
               (2)  "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.
               (3)  "Governing law" means the law governing the
  formation and internal affairs of an organization.
               (4)  "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.
               (5)  "Governmental entity" means:
                     (A)  the state; or
                     (B)  a political subdivision of the state,
  including a municipality, a county, or any kind of district.
               (6)  "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.
               (7)  "Managerial official" means a governing person or
  officer.
               (8)  "Officer" means a person elected, appointed, or
  designated as an officer of an organization by the organization's
  governing persons or by the organization's governing documents.
               (9)  "Organization" means a foreign or domestic entity
  or association that is 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.
               (10)  "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.
               (11)  "Ownership interest" means an owner's interest in
  an organization, including an owner's economic, voting, and
  management rights.
               (12)  "Qualified transaction" means a qualified
  transaction as that term is defined in Section 271.001, Business &
  Commerce Code.
         Sec. 24A.002.  ADVISORY COUNCIL.  (a)  The governor shall
  appoint a Business Court Nominations Advisory Council consisting of
  seven members.  A member of the council serves at the pleasure of
  the governor.
         (b)  Members of the council must meet the requirements of
  Section 24A.054 for judges of the business court and be experienced
  in the areas of law in the jurisdiction of the business court.
         (c)  Not more than four members of the council may be
  associated with the same political party as the governor.
         (d)  To fill a position of a business court judge on the
  creation of the business court, the position of a court of business
  appeals justice on the creation of the court of business appeals, or
  on the occurrence of any subsequent vacancy on the business court or
  court of business appeals, including a vacancy created by the
  expiration of a judge's or justice's term of office, the council
  shall provide the governor with a list of at least five candidates
  for each vacancy. Each candidate must be well qualified to serve as
  a judge or justice of the business court or the court of business
  appeals.
         (e)  The governor may request that the council enlarge the
  list for any vacancy by adding not to exceed five additional
  qualified candidates.
         (f)  The governor must appoint a judge or justice to fill a
  vacancy from the list of candidates submitted by the council.
  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;
               (2)  an action arising out of or relating to a qualified
  transaction in which the amount in controversy exceeds $10 million,
  excluding interest, statutory damages, exemplary damages,
  penalties, attorney's fees, and costs;
               (3)  an action regarding the governance or internal
  affairs of an organization;
               (4)  an action in which a claim under a state or federal
  securities or trade regulation law is asserted against:
                     (A)  an organization;
                     (B)  a governing person of an organization for an
  act or omission by the organization or by the person in the person's
  capacity as a governing person;
                     (C)  a person directly or indirectly controlling
  an organization for an act or omission by the organization; or
                     (D)  a person directly or indirectly controlling a
  governing person for an act or omission by the governing person;
               (5)  an action by an organization, or an owner or a
  member of an organization, if the action:
                     (A)  is brought against an owner, managerial
  official, or controlling person of the organization; and
                     (B)  alleges an act or omission by the person in
  the person's capacity as an owner, managerial official, or
  controlling person of the organization;
               (6)  an action alleging that an owner, managerial
  official, or controlling person breached a duty, by reason of the
  person's status as an owner, managerial official, or controlling
  person, including the duty of care, loyalty, or good faith;
               (7)  an action seeking to hold an owner of an
  organization, a member of an organization, or a governing person
  liable for an obligation of the organization, other than on account
  of a written contract signed by the person to be held liable in a
  capacity other than as an owner, member, or governing person;
               (8)  an action in which the amount in controversy
  exceeds $10 million excluding interest, statutory damages,
  exemplary damages, penalties, attorney's fees, and costs that:
                     (A)  arise 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; or
                     (B)  involve violations of the Finance Code or
  Business & Commerce Code;
               (9)  an action brought under Chapter 37, Civil Practice
  and Remedies Code, involving:
                     (A)  the Business Organizations Code;
                     (B)  an organization's governing documents; or
                     (C)  a dispute based on claims that fall within
  the provisions of this subsection; and
               (10)  an action arising out of the Business
  Organizations Code.
         (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 the business court judge 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 under 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:
               (1)  be at least 35 years of age;
               (2)  be a United States citizen;
               (3)  be a resident of this state for at least two years
  before appointment; and
               (4)  be a licensed attorney in this state and have 10 or
  more years of experience in:
                     (A)  practicing complex civil business
  litigation;
                     (B)  practicing complex 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 experience described by
  Paragraphs (A)-(D).
         Sec. 24A.055.  COMPOSITION OF COURT.  (a)  The business court
  is composed of seven judges appointed by the governor with the
  advice and consent of the senate.
         (b)  A business court judge 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. The judges of the business
  court shall serve staggered six-year terms of office.
         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 business court judge
  has all powers, duties, immunities, and privileges of a district
  judge.
         Sec. 24A.059.  JUDGE'S SALARY.  (a)  A business court judge
  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 business court judge may be removed from office in the same manner
  and for the same reasons as a district judge.
         (b)  A business court judge 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 business court
  judge shall be governed by the same procedure as disqualification
  or recusal of a district judge.
         Sec. 24A.061.  PRIVATE PRACTICE OF LAW.  A business court
  judge 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
  business court judge 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 business court judge 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.
         (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)  The judges of the business court shall maintain chambers
  in the county seat of their 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 business court judge;
               (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.  APPEAL; COURT OF BUSINESS APPEALS. (a)  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.  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.
         (b)  The governor shall appoint seven active justices from
  the courts of appeals to serve as the intermediate appellate court,
  called the court of business appeals.
         (c)  The appointment of a justice to the court of business
  appeals shall be made by the governor from the list of qualified
  appellate justices as provided by Section 24A.002.
         (d)  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.
         Sec. 24A.102.  CHIEF JUSTICE.  The governor shall designate
  one of the seven justices appointed under Section 24A.101 as the
  chief justice of the court of business appeals.
         Sec. 24A.103.  COMPOSITION OF COURT.  Not more than three
  justices appointed to the court of business appeals may be from the
  same court of appeals.
         Sec. 24A.104.  TERM OF OFFICE.  A justice appointed under
  Section 24A.101 shall serve on the court of business appeals for a
  six-year term of office.  A justice may be reappointed by the
  governor.  A justice who retires or resigns from or is not reelected
  to the court of appeals must cease service on the court of business
  appeals on the date the justice is no longer serving on the court of
  appeals.
         Sec. 24A.105.  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.106.  LOCATION.  The justices hearing appeals from
  the business court may sit in any convenient place to hear the
  appeal.
         Sec. 24A.107.  JUDGMENT.  The court of business appeals
  shall render judgments and hand down opinions in the same manner as
  any other court of appeals under Chapter 22.
         Sec. 24A.108.  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.109.  CLERK.  The clerk of the business court shall
  serve as the clerk of the court of business appeals.
         Sec. 24A.110.  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.  The compensation is in lieu of, not in
  addition to, a justice's compensation for service on the court of
  appeals.
         Sec. 24A.111.  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 Sections 24A.002(f) and 24A.055, Government
  Code, as added by this Act, as follows:
               (1)  the governor shall appoint two judges to a term
  expiring December 31, 2020;
               (2)  the governor shall appoint two judges to a term
  expiring December 31, 2022; and
               (3)  the governor shall appoint three judges to a term
  expiring December 31, 2024.
         (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.101, 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, 2020.
         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.101, 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, 2019.
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