Business Court Lacks Jurisdiction Over Pre-September 1, 2024 Actions Despite Post-Effective Date Consent Agreement
Read the Court's Opinion (PDF)
Judge Sofia Adrogué
In Lone Star NGL Product Services LLC v. EagleClaw Midstream Ventures, LLC, the Texas Business Court held it lacks subject-matter jurisdiction over actions commenced before September 1, 2024, even where parties executed a post-effective date written agreement purporting to confer jurisdiction under Section 25A.004(d). The Court remanded the case to district court, certifying the controlling question for permissive interlocutory appeal and staying the remand pending appellate resolution.
Court Staff Summary
This opinion addresses the removability of actions to the Texas Business Court that were filed before September 1, 2024, where the Parties have entered into a post-September 1, 2024 written agreement that the Court has jurisdiction of the case, and the Parties have pleaded jurisdiction under Texas Government Code Section 25A.004(d). The Court concludes that it lacks subject-matter jurisdiction over this action because Section 8 of House Bill 19 limits the applicability of Texas Government Code Chapter 25A to “civil actions commenced on or after September 1, 2024.” Per the request of the Parties, the Court further certifies the controlling question of law discussed herein for a permissive interlocutory appeal under Texas Civil Practice & Remedies Code Section 51.014(d). To the extent that the Court has the authority to do so, the Court’s remand order is stayed pending the resolution of the Parties’ permissive interlocutory appeal.
Background: A Pre-Effective Date Dispute
Lone Star NGL Product Services LLC filed suit against EagleClaw Midstream Ventures, LLC and CR Permian Processing, LLC in district court before September 1, 2024—the effective date of the Texas Business Court. The parties jointly sought to remove the case to the Business Court based on a written agreement executed after the Court's effective date.
The Jurisdictional Question: Post-Effective Date Consent
On September 13, 2024—twelve days after the Business Court's September 1, 2024 effective date—the parties executed a Rule 11 Agreement attempting to bring the case within the Court's jurisdiction. The agreement stated that the parties agree the lawsuit "is within the jurisdiction of the Texas Business Court" and acknowledged it was "meant to satisfy the requirements of Section 25A.004 of the Texas Government Code as a 'subsequent agreement that the business court has jurisdiction over the action.'" The parties jointly removed the case on September 17, 2024, arguing in their Joint Brief that their post-effective date consent agreement authorized removal under Section 25A.004(d). The parties characterized their agreement as "a negotiated, holistic agreement between the Parties that the dispute will be adjudicated by the Business Court."
The Court's Holding: Section 8's Temporal Limitation Controls
The Court rejected the parties' jurisdictional theory, holding that it lacks subject-matter jurisdiction because "Section 8 of House Bill 19 limits the applicability of Texas Government Code Chapter 25A to 'civil actions commenced on or after September 1, 2024.'" The holding is unequivocal: the temporal limitation in H.B. 19's effective date provision bars removal of pre-effective date actions regardless of subsequent party agreement. The Court noted that when the case was filed, "the Bill that created this Court and its jurisdiction—House Bill 19—had not yet been filed in the Texas House of Representatives."
Procedural Outcome: Remand with Certified Appeal
The Court remanded the case to the originating district court. Per the parties' request, the Court certified the controlling question of law for permissive interlocutory appeal under Texas Civil Practice & Remedies Code Section 51.014(d). The Court stayed its remand order pending resolution of the parties' permissive interlocutory appeal, to the extent it has authority to do so. The Court acknowledged that the parties' Rule 11 Agreement contemplated potential remand if the Court determined it lacked jurisdiction.