Why Texas needs business courts
Specialized courts make it much easier to address misunderstandings common among business parties.
Non-lawyers are often troubled by the fact that under both civil and criminal law, corporations are often treated the same as people for purposes of disputes, claims to property, ownership of assets, and due process, among other legal issues.
Both Republicans and Democrats have complained for decades that corporations should not have the same rights as human beings. Yet, it is settled law in the United States that organizations that have the endorsement of a state’s certification as a corporation, company, partnership or any other form of corporate entity, have rights and protections similar to those shared by you and your neighbors.
As an American citizen, you have the right to have your legal issues resolved by a court system that possesses the requisite levels of expertise, understanding and competence. If a court is not qualified to understand and settle your dispute, because the court lacks the proper expertise or simply does not have the time to hear your complaint on a timely basis, you are denied your fundamental right to due process. That is not acceptable.
That is why in Texas, we have specialized family courts, probate courts, municipal courts and justice courts, among others, that ensure that your dispute will be heard by the most competent and capable arbiter available.
As a Texan, you are entitled to have your case heard quickly by a court that understands your issues. Likewise, under the law, Texas corporations deserve the same treatment.
Yet, every day in Texas, we deny our largest job creators — Frost Bank, Southwest Airlines, H-E-B, AT&T, et al. — the benefit of an expertized, qualified and efficient forum for their legal disputes to be heard. Often, business conflicts lay dormant in the Texas court system for years because the courts are so jammed up with other non-business matters that there are no forums available to hear business-related cases. In other instances, conflicts between these large business entities are often too esoteric or removed from the lives of ordinary Texans to be appropriately adjudicated by a non-expertized jury.
Twenty-two other states in the Union have a specialized business court to deal with complex legal issues among companies. Delaware, New York, California, Florida, even Nevada, all have highly specialized and expertized courts that were designed and created specifically to solve the thorny and complex disputes among business parties.
Through years of business-related jurisprudence in these business-minded states, their courts have developed an understanding of business law that makes it much easier for their respective court systems to address those misunderstandings that are so common among business parties. Equally as important, because of the legal precedents promulgated by these courts, it is easier for businesses to predict how their conflicts may ultimately be resolved, a characteristic all businesses seek.
Texas, unfortunately, has not followed the example of these other states. It is not because of the lack of expertise among the Texas judiciary. Our judges are some of the most capable and highly qualified jurists in the country. Nor is it because Texas lacks the will to find a way to streamline these business disputes into an efficient and fast-acting court, where disputes are settled quickly.
The problem that we face in Texas with respect to our court system is the direct result of our economic success as a business-friendly state. Because of Texas’ reputation as the best state in the country to conduct business and its success in building the ninth-largest economy on the planet, it has not yet experienced an existential need to install and cultivate a specialized business court. Why fix that which isn’t broken?
Because Shakespeare’s famous admonition that “the past is prologue,” does not apply to business.
In order to ensure that Texas maintains the strongest and most robust legal climate and business ecosystem in the United States, Texas must prepare for the future by establishing a court that is dedicated to efficiently adjudicating complex business disputes.
Gov. Greg Abbott has prioritized creating and installing a Texas business court as one of his primary legislative initiatives this session. As a Governor who has staked his reputation on supporting and engendering Texas as the most business-friendly state in the country, he intrinsically understands that a specialized business court is not only desirable but absolutely necessary if Texas is to continue to compete on a national and global stage. While some may quibble with his leadership, Gov. Abbott’s understanding of the Texas business ecosystem is second to none. He has played a major role in fostering Texas’ business success and his instincts about establishing a business court are absolutely correct.
I know personally how important and impactful this legislation will be because I am both a business attorney who represents a number of large Texas companies and because I was the original author of the Texas business courts proposal back in 2015 when I served as a member of the Texas Legislature. I know that without taking this next step to bolster our judiciary system, large corporations like those who create so many high-wage jobs for our families and who bring so much tax revenue to our state will move their headquarters and jobs to other more business-friendly states.
To be clear, I do not believe that corporations are people. But I am not the law. What I learned as a Texas legislator is that corporations create jobs, pay taxes, put food on the tables of Texas families, pay for our kids to attend college, and fund our vacations to the Gulf of Mexico every other year.
Corporations aren’t people. But I am hopeful that Texans will agree to create a business court so that job-creating companies that serve our families don’t leave Texas in search of a superior business climate.
Jason Villalba is the CEO of the Texas Hispanic Policy Foundation and a former member of the Texas House. He wrote this column for The Dallas Morning News.
Problem displaying Facebook posts. Backup cache in use.