February 23, 2015
By Angela Morris, Texas Lawyer

A state representative said that Texas district courts are capable of handling complex business disputes, but his proposed bill would streamline business litigation and increase efficiency to create a new expert court to take over.

House Bill 1603 by Rep. Jason Villalba, R-Dallas, would create the Chancery Court of Texas and the Court of Chancery Appeals of Texas to handle litigation over complex business disputes or business transactions.

“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. … 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,” Villalba said in a statement.

David Chamberlain, president of the Texas Chapters of the American Board of Trial Advocates, an advocacy group that includes plaintiffs and defense lawyers, wrote in an email that his group opposes HB 1603.

“It takes cases away from local elected trial judges and places them in the hands of small group of appointed judges. TEX-ABOTA favors local resolution of cases before local judges. We don’t believe that certain kinds of litigants should get special treatment,” wrote Chamberlain, senior partner in Chamberlain McHaney in Austin. He added that implementing the bill would be expensive and that the legislature should instead increase funding for the state’s existing courts.

Chancery Court

HB 1603 would create a seven-judge chancery court that would have statewide jurisdiction to handle civil lawsuits over certain business transactions; the governance or internal affairs of a business; securities or trade regulation law; alleged wrongdoing by businesses or their owners or officers; and more.

Someone could file a lawsuit directly with a chancery court. If someone filed a complex business dispute in a district court instead, one of the parties could have it transferred to chancery court. The court’s powers, procedures and rules would be the same as in district courts. Parties in chancery court would keep their right to trial by jury.

The governor would appoint chancery court judges for six-year terms. A nominations advisory council would draw up appointment lists for the governor. Among other qualifications, a chancery court judge would have to have at least 10 years of experience as a lawyer, judge or professor in complex civil business litigation or transactions.

The chancery court would have a clerk, attorneys and other staff. Judges would receive the same salary as a district judge. Litigants would pay fees to pay for the chancery court.

HB 1603 would also create the Court of Chancery Appeals of Texas. The governor would appoint seven active intermediate appellate court justices for it. The court would follow the same procedures and have the same authority as other intermediate appellate courts. An appeal from the chancery appellate court would go to the Texas Supreme Court.

The bill said that if the Texas Supreme Court ever found that it was unconstitutional for the governor to appoint the chancery judges and justices, then the Supreme Court would appoint them instead.

Villalba, a partner in Haynes and Boone in Richardson, wrote on his State Bar of Texas profile that he practices business, technology and securities law. He serves on the Texas House’s Business & Industry Committee and the Economic & Small Business Development Committee.

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