Background: A Lottery Winner's Unusual Commercial Dispute

Jerry Reed won $7.5 million in a May 17, 2023 Lotto Texas drawing, but alleged that affiliated entities and individuals—including ColossusBets Limited, Rook TX, LP, Rook GP, LLC, and others—had "rigged" a drawing 26 days earlier by purchasing "nearly all 25.8 million number combinations," collecting $95 million and substantially reducing subsequent jackpots including Reed's. Reed's original petition alleged money had and received, violations of the State Lottery Act and related regulations, and derivative claims making all defendants jointly and severally liable.

Two defendants removed the case to Business Court Division 3A in Travis County, invoking the court's jurisdiction over actions "regarding the governance, governing documents, or internal affairs of an organization." Judge Melissa Andrews initially denied remand, citing Reed's allegations that (1) the prize-claiming entity was created for unlawful purposes of rigging the lottery and concealing identities; (2) defendants misrepresented that the entity was formed before the drawing when it was not; and (3) all defendants were jointly and severally liable.

The Procedural Question Presented

The Fifteenth Court of Appeals identified the core issue: "When a case is removed to the Business Court, can a plaintiff compel remand by nonsuiting all claims falling within that court's statutory jurisdiction? Or is removal a 'one-way door' that when properly invoked, 'no later fact or event can defeat the court's jurisdiction'?" The court cited Continental Coffee Products Co. v. Cazarez, 937 S.W.2d 444, 449 (Tex. 1996) for the general rule that "where jurisdiction is once lawfully and properly acquired, no later fact or event can defeat the court's jurisdiction."

The court determined this question warranted mandamus review because it "is an important question, one that applies to many Business Court cases, is not directly addressed in the rules governing the Business Court, and will occur repeatedly if not answered." The court invoked In re Prudential Insurance Co. of America, 148 S.W.3d 124, 136 (Tex. 2004), noting that mandamus review of significant rulings in exceptional cases may be "essential to preserve important substantive and procedural rights from impairment or loss, allow the appellate courts to give needed and helpful direction to the law that would otherwise prove elusive in appeals from final judgments, and spare private parties and the public the time and money utterly wasted enduring eventual reversal of improperly conducted proceedings."

The opinion notes that after removal, Reed twice amended his petition over two months, ultimately filing a version that "expressly disclaims any allegation, legal theory, or request for relief" implicating Business Court jurisdiction. Eight minutes after filing this amendment, Reed moved to remand based on removal of "all allegations that would require adjudication of corporate governance, governing documents, or internal affairs." Defendants conceded Reed had eliminated governance claims but argued the court retained jurisdiction under alternative statutory bases. Judge Andrews issued a detailed 19-page opinion rejecting those grounds and remanding the case to Travis County district court.

Note: The source opinion ends before presenting the appellate court's full analysis and holding. The court denied the requested mandamus relief without oral argument.