Texas Business Court and Jurisdiction – Counting to $5M

By Matt Wood

Our firm regularly files lawsuits in the Texas Business Court, which has a growing reputation as a fast, effective venue for deciding complex legal disputes.  

But the Business Court has limited power to decide cases, known as “jurisdiction.” So before you file, the first question to ask is: does my case fit there?  

Texas law gives the Business Court jurisdiction over several types of business disputes, including claims that management breached a duty to the company, fights over shareholder rights, and interpretation of a company’s governing documents and bylaws. For the full list, see Texas Government Code Section 25A.004.  

But it’s not enough to have the right kind of case. You also need the right amount in dispute.  This amount—called the “amount in controversy”—must exceed $5M.  

So how do you count to $5M and gain entry to the Business Court? A few rules apply:

• You add up the value of the claims on both sides. You do not need to have one claim that by itself seeks more than $5M.[1]
• You exclude attorneys’ fees, interest, punitive damages, statutory damages, penalties, and court costs.[2]
• The value of a claim is usually the money damages sought by the claim. However, claims for an injunction or declaration also have value, which can be added to the total. The law is still evolving on how to value claims for something other than damages.[3]
• You do not need to prove the actual existence of damages and other value that exceeds $5M. You just need a good faith basis for claiming damages and other value that exceeds $5M.[4]
• If the other side challenges jurisdiction, the burden typically falls on them to prove either that your claim of jurisdiction is fraudulent or that a lower amount in controversy is readily established.[5]

A couple of caveats: The $5M minimum was reduced from $10M by an act of the Texas Legislature, effective September 1, 2025. And claims involving publicly-traded companies are exempt from the $5M minimum.[6]

If you can clear these hurdles, filing in the Texas Business Court is often the right decision. The initial filing fees may be higher, but the speed and extra attention from a business-savvy judge are often well worth it. Just make sure you count all the way to $5M. 

About the Author(s)

Matt C. Wood

Matt C. Wood is a Partner at Vela Wood.  He focuses on complex litigation and high-stakes appeals.

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