2025 Tex. Bus. 31
Tex. Bus. Ct.2025Background
- Plaintiffs invested in entities created to own and develop an apartment project in Dallas, expecting certain returns based on initial financial projections.
- Due to rising costs and changing financing, the deal structure shifted, introducing new investors and subordinating Plaintiffs’ equity.
- Plaintiffs sued for derivative fiduciary breaches and for common law and statutory fraud, alleging they were misled into signing company agreements and restructuring the deal.
- Origin Bank (a lender to the project) filed a removal notice to the Texas Business Court based on statutory jurisdiction and amount in controversy; other defendants did not file their own notices or consents.
- Plaintiffs moved to remand or abate certain claims, objecting to the court’s jurisdiction over some claims and the process by which removal was effected.
- The court was asked to address removal, jurisdictional scope, the inclusion of counterclaims, and whether it could decline jurisdiction on non-statutory grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must all defendants file or join a removal to benefit from removal? | Other defendants’ lack of joinder or consent precludes their benefit. | Statute does not require all defendants to individually join or consent. | All defendants benefit from one party’s removal; no separate joinder needed. |
| Do fraud claims re: LLC agreement govern 'internal affairs'? | Fraud claims don’t concern 'internal affairs' or 'governing documents.' | Fraud in inducement relates to 'internal affairs' and 'governing documents.' | Court has original jurisdiction over these claims under §25A.004(b). |
| Is amount in controversy measured case-wide (incl. counterclaims)? | Counterclaim damages alone don’t meet threshold, jurisdiction thus lacking. | Total claims in the case (not individual claims) meet the threshold. | Amount in controversy is case-wide, including counterclaims. |
| Can the court decline original jurisdiction on non-statutory grounds? | Court should abate or remand on comity/dominant jurisdiction grounds. | No statutory authority to decline original jurisdiction. | Court may not decline to exercise original jurisdiction when present. |
Key Cases Cited
- In re Panchakarla, 602 S.W.3d 536 (Tex. 2020) (statutory construction principles for unambiguous statutes)
- Greater Houston Partnership v. Paxton, 468 S.W.3d 51 (Tex. 2015) (definition and application of statutory terms; use of noscitur a sociis)
- City of Houston v. Williams, 353 S.W.3d 128 (Tex. 2011) (expressio unius est exclusio alterius canon of statutory interpretation)