Representative Jason Villalba Files Bill Creating The First Chancery Court of Texas

February 18, 2015

Today, Texas State Representative Jason Villalba (R-Dallas) filed House Bill 1603, which creates the first Chancery Court in the history of Texas. This legislation creates a new court, called the Chancery Court of Texas, whose limited jurisdiction will include various business-related legal matters that currently clog the state district courts and that are best determined by expertized business courts. The Chancery Court of Texas will focus exclusively on complex business matters such as corporate governance matters, mergers and acquisitions disputes and complex securities matters and will streamline and make more efficient the district court legal process in Texas.

“With the creation of the Chancery Court of Texas, we are providing access to a specialized court for complex business matters that have heretofore been heard solely in Texas district courts that are capable, but not designed, to handle these types of disputes. By establishing the Chancery Court of Texas, we are providing Texas businesses with incentives to incorporate in Texas and we are incenting foreign companies to incorporate and re-incorporate in Texas.” Villalba said.

The main provisions of the Chancery Court of Texas are as follows:

  • Jurisdiction of the court will extend to narrowly defined, business-related litigation matters, including actions against businesses, accusations of wrongdoing by businesses or their members, disputes between businesses, violations of the Business Organizations Code, Finance Code and Business and Commerce Code and complex business issues relating to corporate governance, mergers and acquisitions and state and federal securities matters.
  • The Chancery Court is empowered to issue all writs that may be necessary for the enforcement of its jurisdiction.
  • Parties to litigation in the Chancery Court will have a right to trial by jury when required in the Texas Constitution.
  • The Chancery Court will consist of seven judges, appointed by the governor to staggered six-year terms. Judges must have extensive business experience or at least 10 years of experience dealing in complex business law, either as a judge, lawyer or professor.
  • In the event of a vacancy on the court, a bipartisan Chancery Court Nominations Advisory Council will compile a list of qualified candidates, from which the governor must choose a nominee.
  • The Chancery Court clerk will be located in Travis County, but its judges will maintain chambers in the county seat of their county of residence.
  • Appeals arising from the Chancery Court will go to an intermediate Chancery Appellate Court, appointed by the governor, having seven members and being appointed in the same manner and having the same qualifications as the Chancery Court. Judgments from this appellate court may be further appealed to the Supreme Court, as is the case with any other district court or court of appeals in Texas.

Rep. Villalba has reviewed the law in 26 other states having similarly focused business courts, has worked closely with the Texas Business Law Foundation, practicing attorneys, business court experts, constitutional scholars and many others to develop a court that is specifically tailored for business and that reasonably and thoughtfully reorganizes the judicial system in Texas to streamline business litigation and increase the efficiency of legal procedure in Texas.

Villalba continued: “Today, we are taking the first step in what is unquestionably one of the biggest developments in the Texas legal community in a generation. By creating this business-focused, specialized Chancery Court, we are telling the world that Texas is open for business and that there is no greater state in the United States to incorporate and begin operations. Texas already has the strongest, most agile economy on the planet. With the creation of the Chancery Court of Texas, we will have one of the most comprehensive, technologically advanced and efficient business courts in the world.”