Evidentiary Proof Defeats Pleaded Amount in Controversy: Business Court Applies C Ten 31 Burden-Shifting Framework to Remand Derivative Action
Judge Andrea K. Bouressa
Decided September 25, 2026
Mem. Op.
Jurisdiction & Remand
In Runner Runner LLC v. BLPP Holdings, LLC, the Texas Business Court remanded a derivative action after finding that the removing party failed to meet his burden under the C Ten 31 three-step framework to establish that the amount in controversy exceeded the $5 million jurisdictional threshold. The Court held that when a non-removing party challenges jurisdiction and presents evidence that a lesser amount is readily established, the removing party must present controverting proof or face remand.
Court Staff Summary
Read the full opinion When a removing party relies on the non-removing party's pleadings to establish the amount-in-controversy requirement, the non-movant submits evidence that the amount-in-controversy is not met, and the moving party offers no competing proof to support allegations that the non-movant's claims place more than $5 million in controversy, then the case will be remanded back to district court. Mere allegations cannot outweigh an evidentiary record.
Background
Runner Runner LLC filed a derivative action on behalf of FM 900, LLC against the company's other members—including BLPP Holdings, LLC, Nikolay Frolov, Gregory L. Miller, the Prous Family Trust, and Edouard Prous—in the 134th Judicial District Court of Dallas County. The suit alleged financial irregularities in the management of FM 900, which owns and operates ranch property, and sought dissolution of the company and an accounting of its finances. Miller removed the case to the Texas Business Court on July 17, 2026, relying on Runner Runner's second amended petition to establish the requisite amount in controversy exceeding $5 million. Runner Runner moved to remand, challenging whether the jurisdictional threshold was satisfied.
The Jurisdictional Dispute
The central issue was whether Miller, as the removing party, adequately established that more than $5 million was in controversy. Miller's notice of removal pointed to Runner Runner's pleading that FM 900 "owns and operates a ranch property with an estimated fair market value of approximately $5,000,000," along with Runner Runner's request for dissolution of the company and an accounting of its finances. Miller also referenced Runner Runner's pleading for "other damages" related to alleged financial irregularities. The Court found that these allegations, if taken as true, would initially meet Miller's burden under Texas Rule of Civil Procedure 355(b)(2)(A) of pleading facts establishing the Court's authority to hear the action.
The C Ten 31 Burden-Shifting Framework
The Court applied the three-step burden-shifting framework established in C Ten 31 v. Tarbox, 2025 Tex. Bus. 1 (3d Div.). Under that framework, when a removing party pleads a sufficient amount in controversy on the face of the pleadings, "that pleading controls unless (a) a party presents evidence that the amount pleaded is falsely asserted to wrongly obtain or avoid jurisdiction, or (b) a different amount in controversy is readily established, such as by statutorily set fees." At step two, the party challenging jurisdiction must offer proof that the removing party's pleaded facts are false or that a lesser amount in controversy is readily established. If such evidence is presented, step three requires the removing party to present controverting proof supporting his pleading of the amount in controversy. If the removing party fails to raise a fact issue as to the amount in controversy, the Court will remand the action to the district court.
Outcome
The Court found that Runner Runner's objection to removal was well-founded and granted the motion to remand. The opinion indicates that Runner Runner successfully challenged Miller's jurisdictional allegations at step two of the C Ten 31 framework, and that Miller failed to present sufficient controverting proof at step three to establish that the amount in controversy exceeded $5 million.