Big businesses in Texas may soon have courts to call their own, thanks to a measure passed by the Texas Legislature and expected to be signed by Gov. Greg Abbott.

House Bill 19 establishes specialized business courts in the state’s major metropolitan areas, including Houston, serving a statewide judicial district and overseen by appointed judges. These courts would have jurisdiction over cases involving publicly traded companies or those in which the amount of money in dispute exceeds $10 million, unless the parties involved opt out.

The concept is most closely associated with the state of Delaware, where a Court of Chancery founded in the 18th century draws lawyers from across the country to hash out complex disputes. But roughly half of all states, including California, New York and Florida, have business courts of some sort.

The move is a long time coming for Texas, says Jason Villalba, a corporate lawyer and former state legislator who has been advocating for business courts since 2015.

“All corporate lawyers will tell you that Delaware is the preeminent state to do business law,” Villalba said. “As a Texan, I’m thinking to myself, well, why? Delaware is this tiny little state.”

Gov. Greg Abbott has long been a proponent of the idea, in February telling the Greater Arlington Chamber of Commerce that the creation of such courts would bolster Texas’s business-friendly reputation as well as allowing for a more “intellectual, methodical, judicial approach” to complex business disputes.

“If we pass this, I’m going to have one task,” Abbott said before the Legislature’s action. “People will be coming here so fast, so furious, I’m going to have to build a wall on the north, east and west of the state of Texas to keep people from storming into our state.”

An overstatement, that. But proponents of the law agree that having business courts in Texas would make the state a more attractive destination for business. As it stands, many companies incorporate in Delaware, or reference Delaware in their governing documents, in order to have access to the expertise of that state’s long-established business courts.

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“It has the potential to bring some of those biggest business-oriented disputes back to Texas that might otherwise be in Delaware or in arbitration,” said David Harper, a partner at corporate law firm Haynes and Boone in Dallas.

He added that business courts could also help ease bottlenecks across the state’s judicial system. The state’s civil courts in particular, he said, are tasked with cases that range from car wrecks to billion-dollar disputes over transactions, with the latter requiring particular resources.

“They tend to be more complicated, more time-consuming, heavy into the documents of an organization,” Harper said. “So to pull them out in a specialized court could actually help the other courts administer all the other important cases that they’re handling.”

While the measure received some Democratic support in the Texas legislature, it also received pushback from legislators who saw it as a power grab on the part of Republican state leaders. In Harris County, as it stands, most judges are Democrats — and all of them are subject to being booted by voters in regular partisan elections. The Texas Constitution, adopted in 1876 and amended countless times, stipulates that judges should be elected.

That being the case, the biggest stumbling block to the legislation would likely come once it goes into law.  Advocates expect a challenge, and so did the legislators who drafted the measure: HB19 stipulates that any challenge to the law will go directly to the Texas Supreme Court.

With that said, proponents of business courts are optimistic about both the creation of business courts in Texas and their potential economic impact.

“It really is transformational,” Villalba said. “Delaware remains the preeminent court, but I anticipate that over the next five to ten years you’re going to see the Texas business court become one of the most important business courts in the country, if not the world.”

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