Court of Appeals approves removal of older cases to Texas Business Court

A ruling from the Fifteenth Court of Appeals in Lone Star NGL Product Services, LLC v. EagleClaw Midstream Ventures LLC and CR Permian Processing, LLC, No. 15-25-00003-CV, confirms that lawsuits filed before September 1, 2024 may be removed to Texas Business Court by agreement of the parties.

The Texas Business Court opened its doors on September 1, 2024 and immediately began accepting the filing of new lawsuits. But Section 8 of House Bill 19, which created the Texas Business Court, states that “changes in law made by this Act apply to civil actions commenced on or after September 1, 2024.” Act of May 25, 2023, 88th Leg. R.S., ch. 380, §1, 2023 Tex. Gen. Laws 918, 919. Among those changes in law was the addition of Section 25A.004 to the Texas Government Code, which sets out the “jurisdiction” and powers of the Texas Business Court. Tex. Gov’t Code § 25A.004.

A question the Texas Business Court had been grappling with since its inception was whether the Section 8 “changes in law” created a subject matter jurisdiction limitation to any cases that were pending prior to September 1, 2024.

The Texas Business Court routinely and unanimously held that it lacked subject matter jurisdiction over all actions that were filed prior to September 1, 2024. The Texas Business Court made no distinction between opposed and agreed removals.¹

One such Texas Business Court opinion, Lone Star,² was appealed to the Fifteenth Court of Appeals on January 6, 2025 following the Texas Business Court certifying it for permissive appeal. The Court of Appeals accepted the appeal and heard oral arguments on April 15, 2025. 

After the matter was heard and submitted, the Texas Legislature passed House Bill 40, which made several amendments to Chapter 25A of the Government Code. Act of June 1, 2025, 89th Leg., R.S., H.B. 40, § 56, sec. 25A.021 (to be codified at Tex. Gov’t Code § 25A.021). One change in House Bill 40 was the addition of Section 25A.021 to the Government Code, which provides, “Notwithstanding Section 8 [of House Bill 19]” civil actions that were “commenced before September 1, 2024” and that are “within the jurisdiction of the business court” may be transferred to the Texas Business Court “on an agreed motion of a party and permission of the business court.”

The Fifteenth Court of Appeals made two key determinations in Lone Star. First, the Court of Appeals recognized that Section 8 of House Bill 19 is not a limitation on the Texas Business Court’s subject matter jurisdiction, even for actions that were filed prior to September 1, 2024.

Second, the Court of Appeals recognized that House Bill 40 sets forth a valid procedure whereby litigants can remove pre-September 1, 2024 matters to the Texas Business Court. In its reversal of the underlying decision, the Court of Appeals instructed the Texas Business Court to determine whether to grant permission to hear the lawsuit, pursuant to the new Section 25A.021.

The Fifteenth Court of Appeals opinion is notable in its departure from the Texas Business Court’s prior interpretation of Section 8 as a limit on the Texas Business Court’s own subject matter jurisdiction. This is a recognition that the Texas Business Court is a unique judicial body that allows parties to adjudicate their disputes in its courtroom by agreement. This opinion confirms that jurisdiction in the Texas Business Court should be enforced expansively when sophisticated parties to a complex commercial dispute jointly elect to proceed in Texas Business Court, regardless of when their dispute was initially filed.