Texas Business Courts: The Next Frontier in Business Litigation
"The expected benefit and overarching goal of the Business Courts is to provide a more efficient and predictable forum for larger, more complex civil litigation facing Texas businesses," write Nathan Cox and R. Heath Cheek.
June 25, 2024 at 10:00 AM
5 minute read
Court AdministrationAlthough Texas has long championed itself as the best state for businesses—based on surveys, number of corporate relocations, and the number of Fortune 500 companies in Texas—Texas lagged other business-friendly states (namely Delaware) in having a specialized business court system. Approximately half of states have some form of specialized business court (including the well-known Delaware Court of Chancery). The Texas Legislature believed that establishing specialized business courts would lead to more consistent, timing rulings and efficient, cost-effective (relatively speaking) litigation, thus, creating another reason for businesses to relocate to Texas. Accordingly, the Texas Legislature enacted House Bill 19 in 2023, creating the Business Courts, dedicated to a narrow subset of complex, civil litigation involving business disputes (e.g., shareholder derivative suits, corporate governance, securities claims, fraudulent real estate transactions, UCC claims, and many more) with a lot at stake (a minimum amount in controversy between $5 and $10 million depending on the cause of action). However, there is one notable exception: There is no amount in controversy requirement for lawsuits involving public companies concerning more internally focused business disputes (e.g., derivative suits, receiverships, corporate governance, fiduciary duties, etc.). Tex. Gov't Code Ann. Section 25A.004(b). HB 19 marks one of the largest reforms of the Texas court system in a generation. It affects all litigation filed after Sept. 1.
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Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
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